The man-machine symbiosis

A core part of building at Opto is focusing on what really moves the needle when it comes to fixing the broken world of private markets.

But that’s table stakes. Anyone can say that. In fact, a lot of people do. So what allows Opto to push the envelope with our product? The answer lies in a fundamental concept - man machine symbiosis.

Origins

I’ll admit, I think I drank the Kool-Aid a little too much in college. As an 8VC Fellow a few years back, Joe Lonsdale (co-founder of Palantir, Addepar, Opto; general partner at 8VC) talked to us over Zoom, bringing up this idea of the man-machine symbiosis. He shared that the reason Palantir and Addepar had such loyal partners was because they eliminated the time-consuming, mundane tasks across analytical workflows and allowed knowledge workers to (finally) naturally interact with data to unlock decisions that solved core problems in national defense and finance. I was hooked on this idea.

These days, a new “AI for finance” company appears every day claiming to automate jobs away. But let’s be clear - that’s not what we’re doing at Opto. Opto leans into the man-machine symbiosis to build products that augment the ability of a registered investment advisor (RIA) to deliver high–quality client outcomes in private markets, rather than replacing the relationship between advisor and client. Yes - we love AI and leverage it in the right places across our product suite, but we also value the domain expertise of advisors, CIOs, and operations teams all doing their best to serve their clients.

Unlocking efficiency across private markets

For example, we use it to accelerate fund formation. Setting up a custom fund traditionally was a non-scalable process - plenty of billable hours, redlined Word docs exchanged over email, and a neverending series of turns. Sensing how broken this was for RIAs, we applied the man-machine symbiosis concept. We first set about understanding the fundamental business decisions you need to make to launch a fund, and then created a systematic fund formation document generator built on those core variables.

So rather than starting from plain cloth every time a new firm wants to launch a fund, we have detailed conversations with the RIA up front and get to the root of what they are trying to build. Our modular tool builds the draft documents seamlessly, all while customizing to the unique elements of the fund and incorporating best practices from our inside and outside fund formation counsel. A perfect use for a machine - repetitive document generation - that sets the stage for an efficient fund formation process. That way, we are quicker to be able to collaborate and resolve any material issues and edge cases with our RIA partners. Ultimately, generating comprehensive drafts at the onset means faster launch cycles so that CIOs can spend more time building a private markets program with funds that align with client goals and their views of the markets.

Another example comes with fund diligence. It’s no secret that fund managers love to inundate potential investors with troves of data - decks, data rooms, you name it. But for investors looking at dozens of managers for a custom fund, that becomes quite problematic. Imagine yourself in our shoes - we see thousands of deals a year across all private markets asset classes. Now that is a really big throughput problem to be able to have an opinion on each one!

That’s where another machine comes into play. We created a Diligence AI trained on the knowledge of our investment management team and thousands of deals. Whereas a human analyst might take a few hours to comb through all these materials, in minutes we can go from a chest of data to a screening memo. The goal there is to let the machine do the repetitive tasks, and move teams much more quickly onto having debates on the investment and asking deeper questions - which they can do with the tool as well.

And the best part of the man-machine symbiosis is that it is a neverending source of advances. Solve one problem internally at Opto, ship it to our partners, and get more time back to tackle the next problem internally. All in the spirit of giving everyone back valuable time and letting the machines hum along on our most repetitive tasks.