“What data do you use to train your AI?”

This is a question we get asked frequently from both potential investors and startups when they learn that we use an AI bot to help us make Venture Capital investments.

For a bit of background before we dive in, nearly 2 years ago we launched Wendal, our AI / ML platform that automates due diligence on early-stage startups. We came up with the idea for Wendal because we are located in Covington, Kentucky (not a hotbed for unicorns), and wanted to build software to source and evaluate startups from all over North America.

To learn more about Wendal and how we use it at Connetic Ventures please check out these previous…

At Connetic, we use data for everything. We use data to evaluate companies, build our asset allocation model, and create our fund investment thesis. In this post, I wanted to elaborate on the specific data points that built our investment thesis for our current fund, Connetic Ventures Fund.

The three main pillars of our investment thesis are:

Diversification — As the number of investments grow, the likelihood of generating positive returns increases

Value — In underserved markets, you can get 1.5 to 2x more share for your money without sacrificing the potential for outsized returns

Follow-On — Follow-on investments typically outperform initial…

Who are startup founders? And why are some more successful than others?

In prior posts, we have talked about our process at Connetic Ventures and gone into detail about Wendal™ our proprietary machine learning platform for deal ingestion and diligence.

• Applying Moneyball and AI to Venture Capital
• One of America’s First Digital VCs
• Can data and technology eliminate gender bias in Venture Capital?

At Connetic Ventures, when a startup applies for funding we capture nearly 400 proprietary data points on the company and founder. The data is both inputs from companies and data derived from backend algorithms. …

Unbiased. Transparent. Efficient.

Connetic Ventures is an early-stage Venture Capital fund that uses data and technology to remove bias, increase efficiency, and make smarter investments.

We have created two pieces of proprietary technology (Wendal and StartupDNA) to automate due diligence and create a fair funding process for all founders. Not only do we update our algorithm monthly, we continuously monitor it for fairness to ensure that every company has an equal shot at funding.

2.5 years ago, we ditched “The Pitch” for good. …

Covid-19 is Accelerating our Investing Model

We’ve received a large influx of questions about our fund and data-driven model since coronavirus has shifted the investing landscape over the past few weeks. Given this, I wanted to write a quick article to raise brand awareness about Connetic and our model as we have been a digital VC for almost 3 years.

My goal would be to increase deal flow so much that we would write more checks in April than any month in our history, and I believe we can do that and we want to do that, so if you are a startup, read on! …

We interviewed early-stage VCs to see how the global pandemic is impacting their funds and companies

Given all of the uncertainty in public and private markets, there have been numerous headlines and reports of VCs hitting pause during the coronavirus epidemic. At Connetic, we have been operating as a remote VC for the past 2 years with a completely digital investing process so very little has changed for us. We are still writing checks and looking to see as many opportunities as we can.

We weren’t sure if we were alone. So, we thought it would be helpful to check in with a few other early-stage VCs to see how they are adapting to the pandemic and to see if anything has changed in their world.

I interviewed 4 early-stage VCs with offices in Chicago. If you don’t have time to read through the full interviews, here are some highlights:

- All funds are still actively investing and not changing their size of # of checks written

- Remote working is the only significant change to operations

- Capital efficient startups are back in

- Key advice to early-stage founders is to get lean, overcommunicate, and spend more time with existing investors

- Effects of coronavirus are likely valuations will be lower but there will be a lot of exciting innovation that is created during these…

Yes, they can. And the data supports me.

As a female Principal at Connetic Ventures (www.connetic.ventures), an early-stage Venture Capital Firm, I am ashamed of the lack of funding that female (and minority founders) receive. If you are not aware, only 3% of venture capital in the U.S went to companies with a female CEO.

Despite female CEOs receiving much fewer VC investments than their male counterparts, the number of female-owned businesses has risen both in the U.S. and around the world. …

Recapping Connetic’s investments in 2019

Now that we’re well into 2020, we thought it would be a good time to reflect on 2019 and recap some of the amazing work our team accomplished last year!

Last year, we saw over 2,000 companies and had 750 formal applications through Wendal (our proprietary AI platform) since launching in April of last year. Wendal acts as our initial analyst and automatically feeds us companies that fit our model and we are likely to write checks to, historically this has been roughly 5% of applicants.

Out of the ~2000 companies, we ended up investing in 25 companies (1.3%) in 2019. We were surprised and delighted by the broad geographic dispersion of these companies. The 25 companies came from 14 different states and 3 different countries. …