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Software 'appointed to board' of venture capital firm

No wonder startups get such nutty valuations

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Hong Kong based venture capital fund Deep Knowledge Ventures (DKV) “has appointed VITAL, a machine learning program capable of making investment recommendations in the life science sector, to its board.”

The firm says it partners with “top analytical companies utilizing machine learning and large panel of experts” to “... construct complex decision trees showing risk and return at every stage of company evolution.”

“One of such partners is Aging Analytics in the UK, which provides analytical services pertaining to regenerative medicine and biogerontology.”

Aging Analytics is the source of VITAL and has licensed it to DKV, but the decision to put the code on the board seems to have been DKV's alone.

Both companies are talking up the prospect of VITAL making its way onto boards of other life sciences concerns. The canned statement about the “appointment” also includes lengthy descriptions of VITAL's vitals, just waiting for a more gullible outlet than El Reg to reproduce them.

We're not going there because there's a strong whiff of stunt and/or promotion about this, not least because Hong Kong law, as Thomson Reuters points out here, in Hong Kong “The board comprises all of the directors of the company” and “A director must normally be a natural person, except that a private company may have a body corporate as its director if the company is not a member of a listed group.”

Unless VITAL is vastly more capable than described, it cannot be considered a “natural person”. So its “presence” on the board is cosmetic.

There's also the small matter of Directors' liabilities, which companies routinely insure against to to protect their Board members. Obtaining insurance for VITAL's pronouncements would be nigh-on impossible. Let's also ask what happens if VITAL is hacked: would that constitute the Directorial no-no of false and misleading communications? If VITAL crashed, would that constitute failure to disclose? Those questions come before we ponder whether VITAL has the ability to cast a vote, never mind raise its hand to show which way it has voted.

A stunt then, albeit an unsettling one: software is on the march and often challenges human expertise. At a guess, VITAL is what previous generations of business intelligence hype called an executive information system, a tool that offers high-level analysis of a business beyond purely operational matters. It's grand that DKV has put such a tool in its Directors' hands, but this software is no more a Board member than Caligula's horse was a senator. ®

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