9 Nov · 58 min

E453: Quantifying Venture Capital, Finding the Next Anthropic, and the Science of Picking Winners

What if you could identify the next billion-dollar startup before its founders even approach investors? In this episode, I sit down with Jerry Ye, Partner at BITKRAFT Ventures, to explore how data science is transforming venture capital from an intuition-driven business into something increasingly measurable. Drawing on his background in machine learning, large-scale data mining, and quantitative investing, Jerry explains how investors can identify promising startups through employee movements, credit card transactions, customer retention, and alternative data. Highlights: - Why employees leaving highly paid jobs to join a startup can be a powerful investment signal - How talent data revealed Anthropic's hiring strength relative to OpenAI years earlier - Why employee retention and company culture matter alongside technical talent - Why hedge funds adopted alternative data long before most venture capital firms - How a 3–5% sample of US card spending can reveal revenue trends and customer retention - How alternative data helped identify Grammarly's growth and retention - Why user acquisition financing could be a better alternative to equity or venture debt for certain startups - How revenue-based repayment allows companies to finance customer acquisition without dilution - Why venture firms should measure which deals they actually saw, missed, or passed on - How LPs could use CRM records, emails, and meetings to evaluate a venture manager's true access Guest Bio: Jerry Ye is a Partner at BITKRAFT Ventures, an investment firm focused on gaming, entertainment, and interactive media. He brings a research and engineering background in machine learning, large-scale data mining, natural language processing, and information retrieval.His technical expertise includes recommendation systems, Spark, Hadoop, MPI, and large-scale data infrastructure. Throughout his venture career, Jerry has focused on making startup investing more measurable by analyzing talent networks, alternative transaction data, customer retention, and company growth signals. Sponsors: Juniper Square: Juniper Square is trusted as the operations partner by more than 2,300 private markets GPs worldwide, connecting technology, data, and fund administration services to help GPs fundraise efficiently, streamline operations, and improve the investor experience. Their unified platform centralizes data and connects LPs and GPs across every workflow, including fundraising, investor onboarding, compliance, treasury, and reporting. Today, more than $1 trillion in LP capital is managed through Juniper Square. For more information, please visit https://www.junipersquare.com/howiinvest. Are you interested in sponsoring the How I Invest Podcast? Please email David Weisburd at david@weisburdpierce.com (mailto:david@weisburdpierce.com). **Stay Connected with David Weisburd: ** X/Twitter: @dweisburd LinkedIn: https://www.linkedin.com/in/dweisburd/ Weisburd Pierce: https://www.weisburdpierce.com/ **Stay Connected with Jerry Ye: ** LinkedIn:https://www.linkedin.com/in/jerryye/ Questions or topics you want us to discuss on How I Invest? Email us at david@weisburdpierce.com (mailto:david@weisburdpierce.com). Disclaimer: This discussion is provided for general informational and educational purposes only. The views expressed by Jerry Ye are his own and do not constitute investment advice or an offer to sell or solicitation of an offer to purchase any security or investment product. References to third parties and publicly available information do not imply endorsement, sponsorship, or affiliation. (0:00) Can Venture Capital Be Quantified? (3:09) Why Employees May Be Better Startup Investors Than VCs (6:20) How Talent Data Revealed Anthropic's Advantage Over OpenAI (8:04) How Credit Card Data Can Identify the Next Breakout Startup (15:05) How Alternative Data Helped Identify Grammarly's Growth (16:20) The Rise of Non-Dilutive User Acquisition Financing (22:43) How to Quantify a Venture Capital Firm's Deal Access (27:12) How LPs Can Use CRM Data to Evaluate Venture Managers (35:45) Why AI Cannot Replace Relationships in Venture Capital (49:57) How Jerry Is Building a Data-Driven Alternative to Venture Funding