There is a growing body of research confirming the need for innovation in the venture fund model.
A research piece from late 2020 on the innovation coming to the venture industry. The report was done by Clayton Christensen’s (the father of the term Disruptive Innovation) consulting firm.
Pitchbook’s ‘look back/look forward’ verifying the transformation & innovation coming to the venture model.
Proper Diversification
to manage non-systematic (transaction) risk
Staged/Multiple Funding Rounds
to manage systematic (timing/market/thesis) risk
Scout & Opportunity Funds
Andressen Scout Fund Assessing the World of Opportunity Funds
Data-Driven Decision Models
to manage decision process (bias/inconsistency/unscalable) risk
Nobel Laureate Daniel Kahneman: 4 Keys to Better Decision Making
Hint: algorithms beat human bias, and simple algorithms beat complex ones
Institutional Investors Journal of Private Equity
Institutional Investors Journal of Portfolio Management
Is the Venture Capital Juice Worth the Squeeze?
written by a Quant Strategist from Northern Trust
while maintaining proper diversification
Better Data more important than Big Data
and experience/skill more important than both
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