One of the biggest challenges for venture capital companies is finding interesting investment targets before anyone else. It is often a laborious, travel-intensive job. But machine learning and predictive analytics are starting to transform how an investor puts a portfolio together.
“My job used to be about getting on a plane once a week and going to a different European city to try to find people who were doing interesting things,” says Roberto Bonanzinga, co-founder of InReach Ventures and previously a partner at Balderton Capital, a UK-based VC firm which invests primarily in early-stage European technology companies.
It was inefficient, he says. “I would look at 50 companies a day, maybe 1,500 a month, and of those maybe 100 would get to the next level. We would do one deal a month.”