I am excited to announce that KDX, in junction with the University of California, just led a significant investment in GrowthsphereAI in order to put an end to the clunky and low-tech text-based investment memos and launch a new era of AI-enabled, software-native, digitized, and data-driven investment decision-making.
The job of the memo is to condense large amounts of diligence, expertise and analysis into a single document that captures (in theory) the information, expectations and logic behind specific investments. And the job of the analysts is to make sense of that memo – validating or poking holes in it – before deciding whether to approve, reject or revise the investment.
As this suggests, the investment memo is perhaps the single most important document in the life of a professional investor or investment organization, as it – quite simply – sets out the case for any investor to actually make an investment. Moreover, investment memos serve as valuable windows into the inner workings of an investment organization, highlighting their beliefs, assumptions, goals and objectives. As such, these memos could serve as diagnostic tools for bettering a wide array of organizational processes. They could power long-term insights and reveal patterns of decisions. They could be studied to reveal biases or errors. As circumstances change after a memo, the documents – or their embedded assumptions, beliefs, or expectations – could be revisited.
Here is how I once described the opportunity:
I wrote that in 2017. It’s a copy and paste from a memo I wrote to convince some friends we should start a new company to deliver technologized memos. But, I quickly learned, the technology did not yet exist to make this dream a reality. And so my memo about transforming memos went onto a back burner, waiting for a time when technology would catch up.
Well, that time is now. Generative AI, Retrieval Augmented Generation, and Explainable AI have created the perfect recipe to deliver a new paradigm of investment decision-making, and Rajeev Bharadhwaj and Christopher Thomas proved it to me with their company Growthsphere AI. Leveraging Generative and Explainable AI, Growthsphere digitizes investment decision-making by generating comprehensive memos and reports that encapsulate investors’ strategies, beliefs, and expectations, while revealing success and failure patterns and logical gaps.
And so we’ve committed to working with Growthsphere to digitize investment decision-making for institutional investors. The GS platform will ingest customers’ private data into a private LLM and provide a system to create investment reports and memos that are bespoke and tailored to the investors’ beliefs, assumptions, portfolios, and strategies.
The future is finally here…