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Capital-As-a-Service: A New Operating System for Early Stage Investing

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Re: Capital-As-a-Service: A New Operating System for Early Stage Investing

#21

Post by ucaetano »

vm wrote: post #15

Genius. Finally, someone it taking a "moneyball" approach to VC. The critical comments on this thread have missed the point. Although the author is vague, it sounds like they built a system to analyze company metrics and thus screen investments at scale. This enables them to see more investments around the world, and makes it easier for entrepreneurs to "pitch" them, because they don't need to do the time consuming,…

> they built a system to analyze company metrics and thus screen investments at scale

Wait, so they invented... financial analysis? KPIs? BI?

Really?

Re: Capital-As-a-Service: A New Operating System for Early Stage Investing

#22

Post by chrisweekly »

mikikian wrote: post #17
AznHisoka wrote: post #6

Earlier quoted context omitted.

so which metrics are the right ones to look at?

They elude to it in these blog posts: https://medium.com/swlh/diligence-at-social-capital-part-1-a... https://medium.com/swlh/diligence-at-social-capital-part-2-a... https://medium.com/@jonathanhsu/diligence-at-social-capital-... https://medium.com/@jonathanhsu/diligence-at-social-capital-... https://medium.com/@jonathanhsu/diligence-at-social-capital-... https://medium.com/swlh/diligence-at-social-capital-epilogue..…

allude. totally different word.

Re: Capital-As-a-Service: A New Operating System for Early Stage Investing

#23

Post by AznHisoka »

bactrian wrote: post #12
AznHisoka wrote: post #6

Earlier quoted context omitted.

so which metrics are the right ones to look at?

Social metrics. Would make the Social Capital name genuinely meaningful :-) The “social response” (HN, GitHub, reddit, ...) to a new project, product, or service is all you should need to predict success at a high enough rate to do extremely well. It’s not a matter of difficulty so much as conviction and intelligence.

There are many products that have never launched at hacker news or reddit.

Re: Capital-As-a-Service: A New Operating System for Early Stage Investing

#24

Post by ttul »

vm wrote: post #15

Genius. Finally, someone it taking a "moneyball" approach to VC. The critical comments on this thread have missed the point. Although the author is vague, it sounds like they built a system to analyze company metrics and thus screen investments at scale. This enables them to see more investments around the world, and makes it easier for entrepreneurs to "pitch" them, because they don't need to do the time consuming,…

LoL, you mean they found a new way to spin “financial analysis”.

Re: Capital-As-a-Service: A New Operating System for Early Stage Investing

#25

Post by vm »

ucaetano wrote: post #21
vm wrote: post #15

Genius. Finally, someone it taking a "moneyball" approach to VC. The critical comments on this thread have missed the point. Although the author is vague, it sounds like they built a system to analyze company metrics and thus screen investments at scale. This enables them to see more investments around the world, and makes it easier for entrepreneurs to "pitch" them, because they don't need to do the time consuming,…

> they built a system to analyze company metrics and thus screen investments at scale Wait, so they invented... financial analysis? KPIs? BI? Really?

Obviously they didn't invent financial analysis.

They built a system that does this at scale: 1) collects and organizes the right data and spits out analysis -- this can be painful from the many times I've done it. Investment banks hire armies of young analysts and pay them six figures to do this at scale 2) made it self-serve for entrepreneurs seeking funding -- not having to do the CRM/pipeline mgmt process associated with private investing is a massive efficiency improvement. VCs hire associates and partners and pay them handsomely to do this at small scale (hundreds of deals seen / year / professional)

As someone who has done a lot of private investing, the value here is obvious and substantial for the investors and the entrepreneurs.

Re: Capital-As-a-Service: A New Operating System for Early Stage Investing

#26

Post by tschellenbach »

1. Good companies won't pitch you, it's common for VCs to reach out to the top companies while they are not raising funding. So good luck running your analysis on data you don't have.

2. There are no metrics that identify a good from a bad investment. Maybe this would work in some cases for later stage investments. But even at the later stage the metrics are all over the place.

3. Companies applying to this VC fund will game the system

4. This is not a new thing, every VC firm looks at your metrics.

Re: Capital-As-a-Service: A New Operating System for Early Stage Investing

#27

Post by burnte »

tschellenbach wrote: post #26

1. Good companies won't pitch you, it's common for VCs to reach out to the top companies while they are not raising funding. So good luck running your analysis on data you don't have. 2. There are no metrics that identify a good from a bad investment. Maybe this would work in some cases for later stage investments. But even at the later stage the metrics are all over the place. 3. Companies applying to this VC fund w…

1. Good and great companies actively seek out funding, especially at early stages. Lots of good and great ones slowly build and get contacted, too.

2. There certainly are good metrics, otherwise the basic tenets of business that have evolved over the past 5,000 years would exist. There may not be metrics that say if a certain product/service will be a smash hit or not, but it did not take a crystal ball to see that Pets.com was incredibly unsustainable, or that Groupon (and Blue Apron was too easy to replicate and thus overvalued, or that Juicero was an absolutely asinine idea destined for failure (massively overengineered squeezer that wasn't even necessary for their overpriced juice bags).

3. People game every VC system. Remember Pixelon? Theranos was WIDELY derided in medical and medical research circles from the get go. No way a 19 year old drop out came up with such a massive breakthrough in blood tests, she didn't even have the time to learn the medical basics. Faraday has looked sketchy from the outset as well.

4. This statement I wholly agree with, and it happens to back up my disagreement with #2.

Re: Capital-As-a-Service: A New Operating System for Early Stage Investing

#28

Post by dangerlibrary »

chrisweekly wrote: post #22
mikikian wrote: post #17

Earlier quoted context omitted.

They elude to it in these blog posts: https://medium.com/swlh/diligence-at-social-capital-part-1-a... https://medium.com/swlh/diligence-at-social-capital-part-2-a... https://medium.com/@jonathanhsu/diligence-at-social-capital-... https://medium.com/@jonathanhsu/diligence-at-social-capital-... https://medium.com/@jonathanhsu/diligence-at-social-capital-... https://medium.com/swlh/diligence-at-social-capital-epilogue..…

allude. totally different word.

Many people on HN do not speak English natively. Consider being a bit gentler when you correct someone :)

Re: Capital-As-a-Service: A New Operating System for Early Stage Investing

#29

Post by exogeny »

vm wrote: post #15

Genius. Finally, someone it taking a "moneyball" approach to VC. The critical comments on this thread have missed the point. Although the author is vague, it sounds like they built a system to analyze company metrics and thus screen investments at scale. This enables them to see more investments around the world, and makes it easier for entrepreneurs to "pitch" them, because they don't need to do the time consuming,…

Not sure it's really all that original, except for possibly the "scale" part. A lot of VCs (Correlation must notably jump to mind) have a multi-variate model which they run, and then ultimately decide with standard terms within about 24 hours.
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