Aumni is a startup that analyses the legal documents used by venture capital and private equity funds to provide insights and drive efficiency. They’ve also received significant funding from DLA Piper and Orrick. Artificial Lawyer spoke to Katrin Robb, VP Customer Success and Strategy at Aumni, about how it’s making a difference.
First, what does Aumni do? The simple version is that it takes all the documents used in investment deals and analyses them with a mix of NLP and human experts to extract key data. That is then dashboarded to improve decision-making, and even perhaps change how these funds engage external legal advisors.
Having all this information at hand may also mean a fund doesn’t have to call up a law firm that they may have worked on a deal with just to get the answer to a simple question. The answer may well be right in front of them, set out in the dashboard Aumni has made from the fund’s unstructured data, i.e. its documents.
As Utah-based Robb (pictured above) explained: ‘There is a focus on being efficient, especially when you are a smaller fund. The trend is not so much about reducing spend, as being data-led. In turn that can potentially mean less legal costs.’
Robb also stressed the importance of regulatory compliance – as investing is a heavily regulated sector – and this can be a challenge for many funds that may only have one or two inhouse lawyers, or even none at all. In fact, this site was surprised to hear just how few inhouse lawyers most funds employ.
She explained that traditionally, smaller funds generally had fund admin staff look after all the documentation, which included tons of legally relevant contracts filled with obligations and business critical data.
But, Aumni can help there, as it can ingest all those documents and show the funds what is going on. So, it may help those organisations without legal teams, or only small ones, to get on top of their regulatory needs.
The business aspect is key here. As Robb explained: ‘Funds want to make good and quick strategic decisions, so it really is important to leverage this information [that is held within their document stack that details all the fund’s previous deals.]’
She added that having access to this data allows them to create benchmarks and better understand all of their commitments. It also helps the Limited Partners (i.e. the groups or wealthy individuals who put their capital into these funds), as they can give clear data to them about the fund’s activities and portfolio.
Another aspect here is diversity and ESG profiles. Much of this data doesn’t always get formally collected by funds, but Aumni can extract information here from documents involved in deals and build it into its dashboard. So when Limited Partners ask a fund who they are investing in, and what those companies are doing about diversity and ESG, for example, the funds can provide the data immediately across their whole portfolio, which for some funds could be dozens of companies.
Artificial Lawyer then asked if all of this data could be used to create a kind of ‘Peer Monitor’ overview of what was happening across the market?
Robb replied: ‘There are lots of opportunities with the data. Naturally this is all anonymised and not made public, but you could see for example, what would be a standard value for a Series B round for a biotech business, or what were the usual terms for participating in such a round.’
She also noted that rather than having to rely upon ‘one lawyer’s truth’ based on their memory of what is market for a certain type of transaction, Aumni can provide specific data from across the whole sector to show what really is happening.
All in all, this seems to be a very positive development and is bringing legal and business data clarity to the investment world, much as some CLM companies are now doing with larger corporates. Moreover, it’s a legal tech / fintech business where leading law firms, such as DLA Piper and Orrick are involved.