Ever wondered which of the many legal tech start-ups will succeed? Which will fail? Which will make their investors and founders very rich? Well, now there is an AI start-up for that, meet Aingel.
The San Jose, California-based start-up, analyses other start-ups, (whether legal tech or any other type), and in particular their founders, and decides if the company will be a success or not. The core idea is that VC investors can then augment their target analysis with Aingel and make better seed investments and put less money into those that never make it commercially.
Given that start-ups don’t have much financial information to reassure investors, the focus is very much on the traits of the founders. Ironically, when it comes to new technology the thing that really matters is the personality of the people involved.
After analysis each start-up is given an Aingel Score, which the company calls ‘the credit score of startups‘.
While on one level this may seem a big ask of a machine learning system, the three co-founders are well experienced. They include: Amr Shady, CEO, with over 16 years of experience in building, scaling and acquiring companies; Prasant Sudhakaran, Director of Corporate Development, who is a finance and analytics professional; and Hariraj Jayakumar, Director of Products, who previously worked with Barclays Capital, Sempra Commodities and other firms as a business solutions data analyst and consultant.
The co-founders say of their system: ‘With over 12 months of research conducted at NYU, we have developed a patent-pending machine learning algorithm that predicts the success of founders and their ability to execute.’
‘The output of our algorithm is the Aingel Score. Think of it as…the likelihood that this [start-up] team will be able to execute on their idea and navigate through market and business model changes early in the life of the startup,’ they add.
But how do they do this? The company continues: ‘We first build an extensive feature-set on founders, from our data partners and public sources; their work experience, backgorund and we use artificial intelligence to generate more than 50 personality attributes from their digital footprint. Because the standard machine learning fails with such a feature set, we use our patent-pending machine learning algorithm on this dataset to generate the Aingel Score.’
In a recent blog post, CEO, Shady explained that VCs should not fear the use of AI tools to pick the next AirBnB, or legal tech’s future equivalent.
‘The greatest leverage VCs can get from AI is by treating it as ‘augmented intelligence’ and not competition. By combining human intuition and AI algorithms, the end result will be better than either of them alone,’ says Shady.
Aingel is also working on how to help start-ups find the right investors more quickly and easily. In effect this is a matching service that analyses the start-up and pairs them off with the best-fitting VCs.
Will their AI-driven predictions turn out to be right? There is only one way to find out: wait and see. But, at least we will eventually know. The company recently (see link) gave Aingel Scores to several start-ups, though apparently no legal tech start-ups, and no doubt over the months and years ahead their success can be measured against their scores.
Look out VC world, AI has now landed in your sector as well….