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VC firm appoints algorithm to the board

19 May 2014  |  5876 views  |  3 Keys on Card

A Hong Kong-based venture capital firm has appointed a computer algorithm to its board of directors, giving the program a vote on what startups to invest in.

Vital (Validating Investment Tool for Advancing Life Sciences) uses machine learning to analyse financing trends in databases of life science companies and predict successful investments.

It was licensed by UK research agency Aging Analytics to Deep Knowledge Ventures (DKV) earlier this month and has already been used to inform investment decisions in two startup life science companies.

DKV says it is now giving the software a spot on the board, meaning it gets an equal vote with its human colleagues on what companies to take a punt on.

Dmitry Kaminskiy, senior partner, DKV, says: "The variables involved in the long-term success of a biotechnology company are many and complex. We were attracted to a software tool that could in large part automate due diligence and use historical data-sets to uncover trends that are not immediately obvious to humans surveying top-line data."

BetaBeat has asked Kaminskiy the pressing question: "Will it be a bunch of humans plus one computer sitting around a table?"

To which he replies: "No, don't take it literally."

Comments: (3)

Matt White
Matt White - Finextra - Toronto | 19 May, 2014, 10:43

So that's how Clinkle got all that cash...

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A Finextra member
A Finextra member | 19 May, 2014, 12:50

Was trying to find out more... gota 404. 

http://aginganalytics.com/our-apprpoach/ 

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Russell Bell
Russell Bell - Fastbase Ltd - Wellington | 20 May, 2014, 04:59

Makes a good headline but I hope they don't mean this too literally, that they haven't actually drunk the kool-aid of automatic prediction of successful investments, where the empirical accounting research rubber meets the road smash.

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