Could your new co-worker be a robot? Thanks to automation, 2022 could be the year we see more and more entry-level analyst roles being swapped out for Artificial Intelligence (AI). In fact, the World Economic Forum predicts that, by the year 2025, 85 million jobs will be replaced by AI. While that may sound like a terrifying statistic, it’s not all bad news—there will be job growth, too (we’ll explain more in a minute!).
From time and cost savings through data automation and integration to streamlining deal-sourcing and internal operations, private equity and venture capital firms can leverage AI to replace tedious and mundane tasks while making room for more high-level and strategic hires.
Entry-Level Analysts Are Out—AI is In
Robots are not humans—and firms can use that to their advantage, especially when it comes to operationalizing tasks completed by most analysts in entry-level roles. By leveraging machine learning to streamline deal-sourcing and operational processes, VC/PE firms can eliminate the need for analysts’ involvement in tedious tasks, such as copy/pasting, transcribing, and data entry.
Machines are, by design, less error-prone than humans (who make mistakes by nature), so repeating the same mundane tasks over and over is no sweat. On the other hand, humans can easily become exhausted, irritable, and more prone to mistakes when completing tasks repeatability with no break. Computers can be programmed to automatically complete these tasks, helping to avoid human error—like typing mistakes—which can lead to costly and detrimental effects to the business down the road.
The Role of AI in PE/VC Teams
When integrating data from various sources, including VC-specific CRMs like Altvia’s, AI-driven recommendations only improve. So, along with replacing day-to-day mundane tasks, the more data your systems have access to, the more likely your AI program evolves to become an intelligent extension of your team.
As PEHub states, “The holy grail of high-tech robots is for alerts that proactively advocate next steps, based on your relationship with an intermediary.” Teams can program their systems to provide enriched alerts with powerful time-saving data, like market changes and insights, contact information, and details on previous conversations with portfolio members. This arms team members with deal-closing insights to act on in-the-moment, rather than having to wait for an analyst to dig up information.
Before implementing AI, Institutional Venture Partners’ (IVP) VP of Business Development and IR, Kelly O’Kane, noticed their firm’s investor communications workflow was not scalable. “Our team would spend anywhere from 5-10 hours cross-checking our investor reports for distribution,” O’Kane stated. Once Altvia’s data-intelligent software was implemented, the firm instantly saw time and cost savings results on operational processes and investor communications.
Through AI, firms like IVP can easily transform data into actionable intelligence and deal-closing insights in an instant while refocusing attention to other areas of the business that can’t be automated.
What Jobs Are Sticking Around and Why
Keep in mind that, with job loss and replacement also comes significant job growth. The same World Economic Forum report that predicts 85 million jobs lost to AI by 2025 also predicts 97 million new ones opening up because of machine learning. That’s because AI cannot replace everything – or everyone.
Roles that involve creative and complex thinking will be more important than ever. Computers cannot think critically or develop new strategic ideas, especially in complicated scenarios—and that’s exactly where the human mind shines. Additionally, while AI can provide powerful data to assist in decision-making and thinking through problems, it cannot be programmed with human intuition and the years of experience that executives and business leaders possess. That’s why roles for creative problem solvers and leadership members will stay put—and even grow. Think: marketers, inventors, and business operations executives.
Robots will also never be able to replace the role that real human connection plays in business. As any VC knows, establishing trust and a human-to-human connection in order to get people to relax, open up, and share about themselves is imperative to successful business relationships. Because of this, expect to see sales and investor relations roles stay for the long-term.
Finally, to fully automate your processes, a successful AI program requires someone to actually program, refine, update, and maintain it. Because of this, roles for AI programmers and developers will be popping up on job boards across the industry.
Make Room for AI-Driven Automation
Before heading to the job boards to post a wanted ad for a new analyst or data-entry employee, think twice to see if you can turn to automation to complete those tasks for you.
While the upfront cost of building and training AI programs to align with your firm’s specific processes and needs can be high, replacing these entry-level tasks with intelligent automation can significantly lower operational costs compared to paying humans to do the same job.
If you’re ready to automate your operations and make room for more strategic growth, we’re here to help. To see how your firm can benefit, start a conversation with our team.
