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Why Our Tool Landscape Will Change
Last week, I wrote about Investment Tech as an emerging category. It’s software that facilitates public and private market investing for those firms that cannot afford - or simply don’t want - to develop their software stack in-house.
I received lots of feedback and questions on this post supporting my thesis: Most investors are lost with make vs buy and overwhelmed with the ever-growing spectrum of tools available - that btw all sound the same.
How can you find the right tools for your budget? Why will the 4th wave of tools be different? Is it smart to wait until it unfolds or jump on the train just now?
To answer these questions, I decided to dive into the evolving 4th wave of Investment Tech and highlight how AI-powered tools will be different from anything we know so far. In the end, I’ll also share what I would do as an investor looking to become as data-driven as possible with as few resources as necessary.
4 Waves of Investment Tech
Quick summary of the four major waves of Investment Tech:
1st wave: Private company and fund data providers like Crunchbase, Dealroom, Pitchbook, Preqin, and others
2nd wave: Systems of record (CRM, portfolio, cap table management) like Affinity, Vestberry, Carta, and others
3rd wave: Signal providers like Harmonic, Synaptic, and others
4th wave: AI Copilots and unified systems like … ?
While the first three waves had a great impact on “what” investors do, they didn’t materially change the “how”. I know that some of you would disagree, but let’s face it: Workflows and the ways how we interact with data are still mostly the same. Manual and inefficient.
Yes, we use commercial databases instead of Google. Yes, we use CRM systems instead of Excel files. Yes, we use signal providers instead of analyzing all data points and extracting the insights ourselves. But all in all, investment processes haven’t materially changed for the past decades. Until now.
Standing on the shoulders of giants (systems of record, data & signal providers), the 4th wave of Investment Tech will finally change the way how investors interact with data. This time it’s less about the what but more about the how.
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