Raise the AI Barbell II

By Mike Ryan, BPN Co-Founder and CEO

Serious investors are starting to realize that AI is, in fact, transformational, but (with apologies to the one and only Maxwell Smart), too many actual users are starting to wonder “what if AI would use its powers for good, instead of evil…”  OK, maybe wasting time at work isn’t exactly “evil” but it certainly won’t help you get promoted, earn more carry, or become a top decile performer. On the other hand, using AI blindly can be an evil way to embarrass yourself or make a dangerous mistake.

Once we sense a specific opportunity, we all know the kind of vetting needed. Many investors are skilled at managing people, organizing research, and supervising the process of writing memos, building spreadsheets, and producing slide decks that reveal the key drivers of the decision. The process balances objectivity and debate to build conviction.

Often, however, these final decision-makers have anchored their decision long before the memo and model are ready to review. Too much time is lost in translation of basic facts and figures. Thankfully, purpose-built AI agents put the horse in front of the cart by getting a credible model and memo drafted on day one. It can be downright humbling when a prideful memo writer confronts a first draft that succinctly captures the key points, frames the real decision, and more thoroughly integrates the story and the numbers, before they’ve started to seriously consider the ‘gotta believe’ assumptions, but they quickly appreciate having extra time for critical thinking.

True flashes of insight and critical judgments will continue to make the real difference in driving differentiated returns. Quickly framing the relevant information for the people who possess this insight and drive these judgments can be valuable, but only if it's on point. Focusing time on the right topics, and having a rigorous, repeatable process to surface the relevant evidence, stress test key assumptions, and consider alternative possibilities drives consistent success. The assumptions that drive the numbers in your model and the pivotal words that drive the conclusions in your memo can make a big difference. The key is to inform yourself and the team as efficiently as possible. 

At Bullet Point Network, our team of experienced investors and engineers created a purpose-built software platform where AI agents first understand your thesis from the case descriptions you provide. Then, we generate automatic prompts based on assumptions driving your spreadsheet and map the evidence uncovered in the company data room, expert transcripts, 3rd party research reports, team notes, the public internet and SEC filings, as well as any comments the team adds to the piles of automatically generated evidence. On our platform, you can model the cash flows and exit valuation for the cases you have outlined and automatically produce a credible memo summarizing the business, the “gotta believe”  assumptions, the cash flows and valuation results, the risks and the upside/downside of investing at current prices.

The trick - we think - is to quickly organize and analyze the most relevant information around the assumptions that actually drive the long term value of the company, avoid missing the forest for the trees among vast quantities of often biased or incomplete data sets, and make it easy to continually update the analysis as information emerges and views change over time.  Properly targeted on the right sources, our automatic prompts help you zero-in on the evidence supporting key assumptions and our scenario modeling platform enables you to easily build the logical cases that capture your thinking.

We also make it practical for you to supervise the work, adapt and improve the analysis by adding & editing cases, and superimpose human research & commentary on top of AI generated evidence.  In short, we believe that you need a human in the loop to “own” the assumptions and refine the final results because what matters most is translating your insight about competitive differentiation, management execution, and market opportunity into the long-term outlook for growth, profitability and scale.

Properly designed, AI has the ability to empower those who are adding real value through creativity, insight, and judgment and expose those who are merely regurgitating basic facts, rubber-stamping projections with too many hard-wired assumptions, or compiling memos that “sound smart” but are often retrofit long after the real decision has already been made. 

Which camp do you want to be in?