[VC Now] AI Is Powering Venture Investments Too... "Cutting Review Time to One Week"

87% Alignment With Human Reviewers
Adopted by TheVentures, Bigbang Angels, and MYSC

The artificial intelligence (AI) boom is also sweeping through the venture capital (VC) industry. By introducing AI reviewers into their investment processes, VC firms are drastically cutting down the time required for investment screening.

AI reviewer Image/Photo by Google Gemini

According to the VC industry on the 6th, TheVentures, an early-stage specialist investment firm, has been using an AI reviewer named "Vicky" for investment review work since June last year. Investment reviewer Hwang Sunghyun, who previously co-founded BankSalad as a developer, led the development of Vicky.

The greatest advantages of the AI reviewer are speed and efficiency. According to TheVentures, the investment review process, which typically took one to three months, has been shortened to as little as one week. The time required for documentation tasks, such as drafting investment review reports, has also been reduced from the previous four to five weeks to about one week, cutting it by roughly 75-80%. For example, during the Christmas week at year-end, when investment firms generally shut down, TheVentures discovered the plant-based bio deep-tech startup Doori Company and proceeded with the investment at speed.

Vicky's decisions show an alignment rate of about 87.5% with those of human reviewers. It is particularly strong in areas that require substantial background knowledge from reviewers, such as deep-tech and bio. For instance, in domains where the technical complexity makes it difficult for humans to judge, the AI interprets and uncovers opportunities. TheVentures expects that Vicky will also enable portfolio management, matching for follow-on investments, and deal sourcing through rapid feedback.

Bigbang Angels, an accelerator (AC), has also been gradually introducing its own AI reviewer into its work since last year. Bigbang Angels Vice President Kwon Hyukchan said, "Because Bigbang Angels is an operator of the TIPS program, we receive nearly 30 emails a day, and the AI automatically filters and replies to them, and it also handles tasks such as analyzing IR materials and investment potential." Impact investment firm MYSC (My Social Company) has introduced its own AI reviewer "Mary." Mary analyzes a company's business data, creates summaries, and during the investment review stage recommends suitable capital from among the funds managed by MYSC.

The industry expects the roles that human and AI reviewers can play to become even more clearly differentiated. Vice President Kwon said, "AI reviewers will be able to conduct competitiveness analysis much more precisely and quickly, but when it comes to running (startup) programs or consulting, there will be more areas where human reviewers can contribute," adding, "Market research and similar tasks typically handled at the junior level can, in my view, be replaced by AI reviewers." TheVentures likewise envisions that as AI reviewers reduce the time spent examining documents and other surface-level indicators, human reviewers will focus on final decisions regarding risk versus return, assessing the entrepreneurial spirit of founders, and conducting reference checks by leveraging their personal networks.

In overseas VC circles as well, the use of AI in the investment screening process is driving innovation. According to the U.S. business magazine Forbes, Sid Rajgarhia, who works at early-stage investment firm First Round Capital, introduced AI into the VC industry based on his experience at Palantir. First Round Capital used AI not only to monitor the 1% of companies in which it decided to invest, but also those it chose not to invest in, thereby improving the accuracy of its reviews. AI also helps identify similar businesses based on the database of previously invested companies, and it has significantly shortened the feedback time on investment decisions.

Another case introduced by Forbes is "Deep Research," launched by OpenAI, which has even entered the investment committees that make final investment decisions. Deep Research analyzes voting patterns to pinpoint areas where investors disagree, enabling investment committee members to focus on the main points of contention when evaluating deals and thus assess investments more objectively. It also analyzes the emails received by VCs to prioritize which founders they should meet.

Meanwhile, the number of annual financial AI patents has been steadily increasing. According to "AI Utilization in the Investment Services Industry and Its Implications: A Patent Analysis" by the Korea Capital Market Institute, the number of annual applications, which was only about 20 in 2015, rose to around 380 in 2023. Research fellows Kim Jinyoung and Noh Sungho at the Korea Capital Market Institute stated, "This shows that attempts to utilize AI in the financial investment service domain are spreading rapidly, and it suggests that the financial industry is actively embracing new technologies and pursuing innovation."