Data is an ever-more important element in business decision-making, so why isn’t venture capital keeping up? When will the industry move from intuition to algorithms?
Venture capitalists (VCs) hear lots of pitches from startups, and usually use their personal intuitions to separate the good from the bad. For an elite few, this intuition-driven process has delivered fantastic returns. Yet most of the roughly 500 US-based VC funds have performed rather poorly, with the national venture capital index showing negative industry returns for the 2000 – 2010 decade. This isn’t meant to give VCs a hard time; picking winners is tougher than it looks. But why not branch out into a more data-driven approach?
See on gigaom.com