AI is most helpful in the parts of venture capital that matter the least.
Over the last six months, I’ve co-hosted a monthly workshop teaching investors how to use AI for sourcing, diligence, reporting and fund operations.
When I surveyed 227 investors across the globe about what they wanted AI to help them do, 46% said sourcing and 39% said diligence.
But sourcing companies has never been the hard part of venture. Deciding which ones matter is. And our profession risks losing what makes us differentiated if we outsource our judgment to a machine.
The average machine can’t produce outlier judgment
As an LP, I’ve sat in many pitches that all collapse to the same claim: Trust my judgment. And that’s fine. Allocators pay for both returns and information.
But AI is essentially the average of all information online that is directionally right, but imprecise, making it unlikely to produce outlier insights.
So what happens to a GP’s “edge” if they cognitively offload diligence to a machine?
When I lost my own voice
I was recently invited to give a keynote at a healthcare innovation conference to speak about Long COVID.
But when it came time to write, I couldn’t form coherent sentences without first reaching towards a chatbot. I had outsourced so much of my own thinking that I couldn’t find words to discuss a topic I wrote a book about and built a company around.
That scared me.
Clarity of writing comes from clarity of thought, and the erosion of the written word thanks to the ease of crafting ‘beautiful prose’ was making me lose my edge.
I needed to embrace AI minimalism.
But how could I evangelize the power of this technology every month in my workshops for investors, while curtailing my own personal use of this technology?
Three questions that govern my use of AI
AI is a powerful tool, helping me make sense of large, unstructured datasets and coaching me through complex legal documents and financial models. But I am now rewiring my expectations for how I interact with this technology.
If I let AI take over my work, I risk eroding my judgment — the very skillset we investors claim differentiates us.
In wrestling with this tension, I devised three questions to help me decide whether and how to deploy AI:
- Does this tool make my participation in the ecosystem more human — or robotic?
- Does it challenge my thinking — or reinforce my priors?
- Does it buy me time for depth and creativity — or generate more busywork?
The premise behind these questions is that all of us can only engage in deep work around a few core tasks a day, and AI should help us cognitively offload the shallow work that doesn’t really matter.
A lot of my time goes towards low-judgment tasks, like organizing notes, coordinating meetings and repackaging information. I now let AI handle mechanical tasks like updating my to-do list by referencing my quarterly and annual goals, creating newsletters of deals I passed on to share with co-investors, and drafting pipeline documents to review with my investment team.
For every bit of inbound correspondence I receive, my agent prequalifies whether someone is aligned to my current priorities to decide how to respond. This has allowed me to say no to more “casual coffee chats” while allowing me to be more present and intentional with the few meetings I do take.
And, to challenge my own thinking, I also use AI to red-team ideas, stress-testing speeches, memos or investment theses by forcing them into debate and opposition. Sometimes that means simulating a conversation between people who would approach the same idea from radically different angles. The goal isn’t consensus. It’s exposure to blind spots, weak assumptions and arguments I’d rather not confront.
Success in the AI age means having the time to seek wisdom
I’m old enough to miss “poking” my friends on Facebook, but young enough to have discovered social media in middle school. And the debate on whether AI makes us “dumber” reminds me of my librarian extolling the virtues of browsing bookshelves instead of Google.
Despite advances in new technology, wisdom has always been gained through the art of seeking knowledge, not just retrieving it. Perhaps this is why the first revealed word of the Qu’ran is Iqra — to read — requiring active engagement with scripture. Or why the Judaic practice of midrash treats study as a process of wrestling with text to derive meaning.
Success in the AI age is less about how much more work we get done, but instead whether we have access to more uninterrupted time to seek and sit with new knowledge.
Artisans and engineers: Two futures for investors
As an emerging impact investor I have encountered two archetypes: the artisans and the engineers. Artisans cultivate judgment, memory and taste through deep engagement with founders and markets. Their intellectual edge is real, but it does not scale easily.
Engineers build systems that optimize throughput, automate processes and extend reach. Perhaps they have an army of AI agents that help with fund admin, diligence, sourcing, marketing, reporting and fundraising. They can be everywhere at once. Yet they struggle with depth of thought and wisdom.
When artisans and engineers collaborate, they build scalable systems without hollowing out the judgment those systems depend on. Repeatable processes compound insight rather than replace it. And each of us can point to precisely what should be automated — and what must remain human.
Investing is an apprenticeship business where our craft is our judgment. And so, the task ahead is not simply resisting the temptation of automation, but avoiding the outsourcing of judgment — our strongest asset.
Ibrahim Rashid supports the catalytic capital portfolio at the Sorenson Impact Foundation and serves as Investment Committee Chair of the Sirman’s Global Impact Foundation. He is the author of Strong Haulers and the founder of a digital health startup. The views expressed here are his own and do not reflect those of his employer or any organizations he is affiliated with.
Guest posts on ImpactAlpha represent the opinions of their authors and do not necessarily reflect the views of ImpactAlpha.
