A Moneyball-style revolution is taking place in venture capital.
Just as the renegade general manager of the Oakland A’s flouted assumptions about baseball and replaced gut feelings and outdated statisticswith more effective quantitative analysis, a new breed of venture capital firms are throwing out their Magic 8-balls and are using computer-based models to make smarter investments.
Venture capitalists keep making mistakes, but the algorithm is getting smarter. We want to establish ourselves in Silicon Valley with a different business model. Who else does this? Matt Oguz, founding partner, Palo Alto Venture Science
“The bottom line is that the game has changed … and there is a lot of digital exhaust out there,” said Chris Farmer, a partner at General Catalyst, which is considered one of the more progressive of the older VC firms.
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