VC Arjun Sethi talks a big game about selling company selection strategies to other investors; He says they buy it

Arjun Sethi speaks with the confidence of someone who knows more than others, or someone who knows that appearing too confident can shape perception. Either way, when he tells me over Zoom that “in five years, I will have 50% of the world’s private data” at his fingertips, and that it will be “impossible to compete with me,” he says it with all his might. The authority of Warren Buffett projecting stock market facts.

Sethi, one of the founders of the investment company The capital of the tribetalking about it Termina, a subscription-based AI software platform for “quantitative diligence” that Tribe recently launched that Sethi says can improve outcomes for as many investors as possible. However, this mere possibility raises questions. Specifically, if Termina is so good, why do Citi and Tribe give other investment firms a way to better compete? Relatedly, why should other investors trust Termina, which ingests its customer data to get better over time?

First, it’s helpful to learn more about Termina itself, which launched last month with two products. At a high level, one of these products is a dashboard intended to help investors quickly gauge the health of a company by comparing it across companies in Termina’s raw data set that grows with every new customer Termina secures. The second presentation is designed to help investors understand the external forces at play, including expected changes in the market. Think of Termina as “giving you the power of 1,000 partners,” says Sethi.

Sethi declines to reveal the names of his first clients, but says these include pension funds, sovereign funds and private equity funds, all of which he describes collectively as “a large category of people deploying capital who want to stay under the radar.”

What he is most happy to discuss are his ambitions in this field, which Sethi says the biggest advantage of starting out is the transaction data of nearly 1,500 companies that Termina has fed into more than one large language model (Sethi declines to name him), along with a Master’s degree in management. Business. Which he says Termina created itself to enhance investors’ performance measurement capabilities.

To take advantage of this tool, Termina customers also provide the company with their own raw data. “They might use it for mergers and acquisitions, so the private equity firm will get rid of its own data [into it] The same goes for any other venture capital firm. What this program broadcasts, ostensibly, are comparative datasets of companies that exist “in all industries, at all stages,” says Sethi, who calls Termina, founded just six months ago, “the real Bloomberg of private markets.”

Naturally, some will scoff at the prospect of Termina handling so much sensitive data, which is every company’s most valuable resource. This may be doubly true given Termina’s ties to Tribe Capital.

However, he dismisses such concerns. For one thing, he says, Tribe invests in Series C stage companies and looks for venture-like returns. At the same time, “Termina enables anyone in any asset class to think about how to invest in software companies, regardless of stage, so they are two very different strategies.”

Sethi – who sold a previous company called MessageMe to Yahoo, then worked with VC Chamath Palihapitiya at his firm Social Capital before co-founding Tribe – suggests he has the reputation to get what he’s trying.

“Part of it is that you inherently build a lot of trust over a long period of time,” Sethi says of convincing other investors to use Termina.

we will see. One can certainly see the advantages and disadvantages of Termina’s close relationship with Tribe, which owns a stake in Termina. (Termina has raised just over $10 million so far, including from Sethi personally.)

For example, a team that has worked together for a long time is an advantage. In addition to Sethi — who stepped down as Tribe’s CEO last December, taking on the role of chairman and chief investment officer instead to partly focus on Termina — the seven-person startup includes other people who split their time between Termina and Tribe.

Among them is Alex Chee, who co-founded messageMe with Sethi, joined him at Social Capital, and later co-founded both Tribe and Termina with him. Chee oversees Termina’s day-to-day operations. He also remains the lead product manager at Tribe. Jake Elowitz, another Termina co-founder who briefly worked at Social Capital, is Tribe’s CTO.

On the contrary, the tribe itself is rather young and has not yet established itself. The 30-person group has a staggering $1.6 billion in assets under management already, but was founded only six years ago. It has enjoyed some success from investments in cryptocurrencies, but its other investments have not yet taken off, and the path of some of these bets is unclear, highlighting the limits of quantitative analysis. Take Carta, the cap-table management company that has come under fire for tactics that some find questionable, or Bolt, the one-click payment company that was popular until it disappeared.

It’s also worth noting that Termina customers don’t agree to share their data with the group exclusively, so if someone’s black box is better, Termina might be toast.

Once again, City abandons talk of challenges. “The reason we exist and customers work with us is because we have the best data in the world, and we have the best products. We don’t have any specific patents. Everything we do is trade secrets. And our tool isn’t 10 times better than what’s on the market; it’s a thousand times better.” From what people’s current workflow looks like.

As for what this meant for the tribe, he clearly had greater ambitions now. “My whole goal is that, as one investment firm, I can only do so much. As a company, I can do so much more.