E4: Dr. Abe Othman of AngelList | Data, Research, and Quantitative Investing in Venture Capital

David Weisburd sits down with Dr. Abe Othman, the Head of Data Science at AngelList and the Head of the Investment Committee at the AngelList Quant Fund. Dr. Abe has one of the largest and most granular private market data sets in the world of nearly 15,000 startups. In this discussion we dive deep into the data: power laws, what Dr. Abe’s research tells us about which companies to avoid at all costs, and whether alpha truly exists in venture capital.

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(0:00) Introduction to the podcast and guest, Dr. Abe Othman from AngelList (1:09) Power law returns in venture capital and seed investing (4:51) Use of capital call lines of credit in venture funds (6:57) AngelList funds performance and venture capital alpha (10:42) Understanding power laws in venture capital (14:18) Sponsor: AngelList (15:22) Venture capital versus bond markets and market performance challenges (19:13) Efficiency and variability of venture market pricing and valuation signals (26:10) Portfolio strategies: Concentration versus diversification (28:44) Loss ratios, fund performance, and fund metrics correlations (32:45) AngelList quant fund, proprietary signals, and credibility in seed deals (37:19) Comparing Solo GPs to traditional fund structures (39:26) LP community's evolving investment strategy acceptance (43:52) Investment life hacks and sector effects in early-stage investing (45:08) Tackling sector labels and style drift in venture capital (46:28) AUM drift, persistent high valuations, and mega fund impacts (49:32) Addressing misconceptions and AngelList's financial services role (52:21) Closing remarks and acknowledgements