Venture Capital Needs Better Data, Not Just Faster AI

Venture capital investing traditionally relies heavily on founders' charisma and "it factor," creating a significant bottleneck in data utilization. Henrik Landgren, co-founder of Gilion and former VP of analytics at Spotify, argues that investors often receive cherry-picked data from founders, leading to information asymmetry and hindering the quality of investment decisions.

Landgren asserts that using AI to merely speed up report generation or pitch deck summarization is superficial. The real challenge lies in how companies can build better data infrastructures and objectively use data to understand actual business operations. Following the "garbage in, garbage out" principle, AI is only as effective as the data it processes.

Investors should aim to access data that genuinely reflects a company's operational reality, such as payment and marketing data or accounting records, rather than relying solely on founder-provided information. This would enable the identification of hidden flaws and risks early on, freeing up analysts' time for more crucial tasks like team assessment.

Landgren emphasizes that better data access does not hinder investment but can actually help in identifying overlooked potential opportunities. Competition is intensifying, and speed and decision-making based on reliable data are critical advantages. In the future, as AI-powered technologies become more prevalent, traditional valuation criteria will shift, necessitating new approaches.