Which 500 Startups Demo Day companies does our AI algorithm like?
With 500 Startups demo day coming up Thursday 5/11, we used our Aingel platform to predict the success of batch 20. Our platform uses founder attributes to predict the success of seed and early stage startups. Some attributes we consider are founders’ work and entrepreneurial experience, education and personality, which we derive from their digital footprint.
We scored the 41 companies listed on 500 Startup’s demo day website. Below are the ones that scored above 80%:
Skeyecode, CreditStacks, UrbanLogiq, YayPay, Clanbeat, Mycroft AI, TrueCare24, Hykso, Alta5, Shoelace, Optimity, Cadence, Zyudly Labs.
What does this 80% score mean?
Let’s assume you will suspend your judgement and invest based only on the Aingel Score™. We derived the charts above by benchmarking Aingel’s predictions of around 4,000 tech startups launched between 2003 and 2013 in the US. At the 80% cut-off on the precision chart, approximately 1 in 6 will be a true positive, so two of these thirteen companies selected above can potentially return the 10–50x returns VCs look for in their portfolio.
Bias and Augmented Intelligence
But we know as an investor you cannot and will not suspend your judgement. A common mistake is when VC partners compare their picks with Aingel’s. The greatest leverage VCs can get from AI is by treating it as ‘augemented intelligence’ and not competition. By combining human intuition and AI algorithms, the end result will be better than either of them alone.
That’s why we work with VCs on how to use Aingel’s output as part of their sourcing and selection process. Each VC firm has its bias. By analyzing their past deal flow, we can design decision policies that maximize their returns from the use of AI. Based on these policies, we can then select some of the other demo day startups that scored below 80% on Aingel and make sure we invest in the next hot company coming out of 500 Startups.
In the venture world, augmented intelligence beats artificial intelligence.
Disclaimer: The above is not, and should not be regarded as “investment advice” or as a “recommendation” regarding a course of action.
