Venture capitalists (VC) must now focus on diversity, data, and compliance more than ever. The global financial crisis of 2008 did not significantly impact the VC industry, unlike the rest of the financial sector. Despite this, the venture industry must face another crisis wave that involves valuations and a lack of transparency. The next generation of investors will have different priorities and will disrupt the VC landscape, such as crowdfunding and data-driven funds. Establishing a standardized investment score algorithm will make it easier for underrepresented founders and more technically challenging ideas to receive funding. Startups should focus on having a public profile and a diverse workforce with sustainable business practices. Additionally, making financial operations compliance-ready will increase transparency around a company’s health. The industry should also prevent algorithms from inheriting human bias and prejudices. Embracing data-driven approaches and promoting diversity will help investors, founders, and the end-users, leading to a more robust VC asset class.
The article mentions San Francisco-based AI Summit, which brings top executives together to discuss integrating and optimizing AI investments for success.
The author of the article is Kimmy Paluch, the CEO at Beta Boom, a venture capital fund that combines traditional practice and high-touch support for startups led by founders from underrepresented groups.
