I arrived at this month’s inaugural Slow Money Canada meeting ready to share an excerpt of Michael Lewis’s new book, Flash Boys. Is there a more stark counterpoint for slow money, a better argument for bringing money back down to earth, than the excesses of high-frequency traders racing to achieve a few-millisecond trading edge?
Turns out there is.
And it is this: A venture capital fund called Deep Knowledge Ventures has just announced the appointment of a computer algorithm to its board of directors.
No, I’m not making this up. No, this is not an article in The Onion. This is real news. This is financial reality as of June 2014, on this little old ball of whirling, zooming, and life-of-its-own cyber-money called Planet Earth.
Makes me think back to Niall Ferguson’s prescient observation in The Ascent of Money: “Planet Finance is starting to dwarf Planet Earth.”
Here’s the Business Insider piece on the algorithm’s appointment:
A Hong Kong VC fund has just appointed an algorithm to its board.
Deep Knowledge Ventures, a firm that focuses on age-related disease drugs and regenerative medicine projects, says the program, called VITAL, can make investment recommendations about life sciences firms by poring over large amounts of data.
Just like other members of the board, the algorithm gets to vote on whether the firm makes an investment in a specific company or not. The program will be the sixth member of DKV’s board.
VITAL’s software was developed by UK-based Aging Analytics.
“[The goal] is actually to draw attention developing it as an independent decision maker,” Deep Knowledge Venture’s Charles Groome told BI.
How does the algorithm work?
VITAL makes its decisions by scanning prospective companies’ financing, clinical trials, intellectual property and previous funding rounds.
Groome says it has already helped approved two investment decisions (though has not yet cast its first vote), both of which resemble its own function: In Silico Medicine, which develops computer-assisted methods for drug discovery in aging research; and In Silico’s partner firm Pathway Pharmaceuticals, which employs a platform called OncoFinder to select and rate personalized cancer therapies.
“It’s not what you’d call AI at this stage, but that is the long-term goal,” Groome said.
Let’s leave out the irony of the venture firm’s name: Deep Knowledge. No, let’s not leave it out. I suppose this is the fundamental issue: What is the difference between data and knowledge? Between knowledge and wisdom? What kind of information do we need in order to make what kind of decisions? What kind of knowledge might we call deep?
Slow Money board member Eliot Coleman speaks eloquently about the difference between deep organics and shallow organics. No need to belabor the distinctions here, other than to recite Eliot’s wonderfully insightful maxim: “Feed the soil, not the plant.”
It makes me imagine two cartoons. The first depicts a board table around which five people and one laptop are seated, with everyone saying “Aye.” The second, the same board table, around which five laptops and one person are seated, with the five laptops saying “Aye” and the one person saying “No.”
The “Ayes” have it.