Home > Uncategorized > Could algorithms help create a better venture capitalist?

Could algorithms help create a better venture capitalist?

Fortune

Ask anyone in venture capital about their business model and they will probably tell you it’s all about the “hits.” In the VC world, a hit is a startup that makes it big, returning many multiples of a venture fund’s initial investment. Hits are great for everyone—investors, entrepreneurs, job seekers—but the problem is they don’t happen very often. William Hambrecht, a legendary venture capitalist who made early investments in Apple, Genentech, and Google, says the odds of a big hit are about one in 10. “A few others will work out, and you’re going to lose in a lot,” he says.

But what if venture capital could boost its odds to 50-50, or even two out of three? With $48 billion in VC investment in 2014, such an improvement would prevent huge amounts of money from being lost on startups that never had much of a chance of surviving…

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