The fund has no carry, and the primary sift is finished by robots

Investors are throwing money at AI startups (perhaps not as much as you may think), so it’s no wonder that we’re beginning to see them leaning on the technology to leverage their most precious resource: Time.

In an effort to cut back bias and capture a more diverse group of founders, Kentucky-based Connetic Ventures has developed a bit of software that acts as its top-of-funnel. Called Wendal, the platform assesses founders in line with 13 entrepreneurial traits to find out if a gathering will prove fruitful or not for investors. The test takes 15 to twenty minutes, and the fund guarantees to provide founders a choice inside three days.

Wendal’s genesis was sparked during an idea-storming session for angel investors who wanted to seek out and support startups across Indiana, Kentucky and Ohio efficiently and effectively.

“In San Francisco or Latest York, you may raise money, hang an indication up and have enough deal flow to support an actual fund,” said Chris Hjelm, partner at Connetic.

Outside of those major funding hubs, you will have to be more discerning. The query was how. Knowing that the team is at the middle of any startup, the fund went down what Hjelm described as a “behavioral psychology rabbit hole” and sought the assistance of an industrial psychologist to define the optimal entrepreneurial behavioral profile. They then built Wendal.

I attempted the platform out myself, and my fictional company (based heavily on my real company that failed spectacularly) was beneficial to the investment team.

Wendal’s not all that’s unique about this firm: it also has no carry component. Unlike most VC firms that get to maintain 20% of the cash they generate for his or her LPs, Connetic desires to make itself available to retail investors through financial advisors. It charges a 1.9% fee as a substitute of a direct upside on a startup’s success.

All of that had me interested in this enterprise fund, so I caught up with Hjelm to speak concerning the fund, the metrics that Wendal measures, the way it plans to make its fund structure work, and more.

Equity within the machine

By taking the pitch and the human aspects out of the equation, Connetic believes it has developed a way more equitable model to find out who should receive funding. But any AI system is simply pretty much as good as its training data, so it’s logical to wonder about Wendal’s fairness or its capability to find out if a startup’s founder is correct for a given market. But Hjelm believes the platform has been built to be equitable and that the info bears out this assertion.