| | APRIL 20219TECH INVESTORS WILL PRIORITIZE DATA SCIENCE & AI ABOVE 'GUT FEEL' FOR INVESTMENT DECISIONS BY 2025Current AI technology is already capable of providing insights into customer desires and predicting future behaviorBy 2025, more than 75 percent of venture capi-tal (VC) and early-stage investor executive re-views will be informed using artificial intel-ligence (AI) and data analytics, according to Gartner, Inc."Successful investors are purported to have a good `gut feel' -- the ability to make sound financial deci-sions from mostly qualitative information alongside the quantitative data provided by the technology com-pany," said Patrick Stakenas, senior research director at Gartner. "However, this "impossible to quantify in-ner voice" grown from personal experience is decreas-ingly playing a role in investment decision making. The traditional pitch experience will significantly shift by 2025 as VC and private equity (PE) investors turn to leveraging AI and data science insights for due diligence."Quantitative Analysis Will Shift Investing StrategyGartner predicts that by 2025, the AI- and data-sci-ence-equipped VC or PE investor will become com-monplace. Increased advanced analytics capabilities are rapidly shifting the early-stage venture investing strategy away from gut feel and qualitative decision making to a more modern platform-based quantita-tive process. Information gathered from sources such as LinkedIn, PitchBook, Crunchbase and Owler, along with third-party data marketplaces, can be leveraged alongside diverse past and current investments."This data is increasingly being used to build so-phisticated models that can better determine the via-bility, strategy and potential outcome of an investment in a short amount of time. Questions such as when to invest, where to invest and how much to invest are becoming almost automated," said Patrick.AI Will Help Determine If Leadership Teams Will Succeed or FailCurrent AI technology is already capable of provid-ing insights into customer desires and predicting fu-ture behavior. Unique profiles can be built with little to no human input, which can be further developed via natural language processing AI that can deter-mine qualities about an individual from real-time or audio recordings. While this technology is currently used primarily for marketing and sales purposes, by 2025, investment organizations will be leveraging it to determine which leadership teams are most likely to succeed."The personality traits and work patterns required for success will be quantified in the same manner that the product and its use in the market, market size and financial details are currently measured," said Patrick. "AI tools will be used to determine how likely a leader-ship team is to succeed based on employment history, field expertise and previous business success." IN FOCUSBy CEO Insights Team
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