Hurry up and wait: Four VCs on digitizing in down markets

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Gartner predicts that 75% of investor reviews will be influenced by AI and data analytics by 2025. As a result, many VCs are facing a creeping deadline to modernize their systems and processes now—or risk being left behind. Simultaneously, firms are being tested by a challenging deal landscape where cutting costs and doing more with less are a top priority.

The Campfire 2023 panel ‘Hurry Up and Wait: Digitizing in Down Markets’ featured Affinity VP of Product, Jennie Dvorak, as moderator and four panelists: 

  • Ryan Bateman, Chief Technology Officer, Sands Capital 
  • Diogo Henriques, COO, BAM Elevate
  • Amber Quinones, Head of Platform and Operations, BBG Ventures
  • Andrew Cafourek, VP, Head of Technology, Anthos Capital

They shared insights on managing the delicate balance of effectively budgeting resources while still being mindful of cost. 

Here’s an overview of what was discussed, along with time stamps to help you dive deeper at key moments:

Data is a catalyst to drive decision-making and productivity 

Starts at 13:37

When asked whether data is more a decision driving tool or a time saving tool, our panelists agreed that it holds value in both areas. 

As a smaller firm, Quinones explained that BBG Ventures relies on having a shared, accurate source of data to free up time for dealmakers so they can focus on adding value to portfolio companies. “We have a hundred active portfolio companies and we really try to be–despite realities–really involved and to play the Chief of Staff for them. Being able to get our team to communicate better and faster is essential.” 

Cafourek explained how using data to impact decisions leads to productivity gains. With regards to deal sourcing, he said, “The faster you say no, the more time you free up for the next thing.” He continued: “The use of AI as a proactive assistant not only drives better decision-making, but also gets to smarter questions faster.” 

Every system needs a feedback mechanism 

Starts at 20:40

The panel agreed that in order to digitize effectively, feedback is essential. Cafourek discussed this, saying, “As soon as you integrate human feedback into the loop, everything gets exponentially better…this is true for both AI and human intelligence.” 

He shared how at Anthos Capital, they are building the measurement tool first and then plugging AI-driven prospects into it so that they know early on whether it was useful or not. He added, “Then we can give all that feedback to whatever model we're using to generate those prospects.”

Henriques explained that at BAM Elevate, the team is using AI to determine possible future scenarios for the firm—while ensuring that Affinity remains the source of record. He said, “We have a model in machine learning where we try to predict different outcomes in VC. We have that model constantly learning and driving new insights. All of that data is integrated with Affinity.”

AI comes with a unique set of challenges (and solutions)

Starts at 23:50

The panelists united around a common challenge: How can you find a healthy and sustainable balance between investing in AI tools that drive decision-making while cutting costs when opportunities arise? 

For Batemen at Sands Capital, it has been a case of assessing the total cost of off-the-shelf AI solutions against building something in-house. He said, “It's really interesting because anything we build is most likely going to be surpassed in the next two years. But there's still value in this because anything we build will set up our data to be structured for those next tools or projects. I think this will be a huge accelerator and differentiator for the firms that are taking it seriously now.”

Quinones explained that exploring tools with usage-based pricing has helped BBG Ventures find solutions that fit. “It’s been extremely encouraging to see that sort of adoption instead of the standard SaaS fee model…being able to try out a number of different tools to really get to what gives us the most juice and what enables us to get the bang for buck that we're really looking for.”

Data-driven tool adoption will define the winners of tomorrow

Starts at 32:40

Henriques isn’t alone in predicting that adopting data-driven technologies will become inevitable in VC—but he cautioned that it will still take a while for people to include them in processes and workflows. He said “Platforms like Affinity and many others are going to pop up in this market and are going to get increased adoption, but it's going to take time to actually change investor behavior. And to adapt to using those effectively.”

Bateman shared that this level of excitement and explosion of energy hasn’t been seen since the Internet boom of the late 1990s and early 2000s, and that speed of adoption is going to be a differentiator. He said, “I feel that organizations and individuals who adopt, adapt, learn and bring that growth mindset to this new technology are going to gain an advantage over their peers.”

That’s a wrap. Where will you go next?

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