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VC firm Flybridge is using AI for writing investment memos, a critical part of any diligence.
It's making the generator available for public use via its website and GitHub.
Flybridge aims to help founders refine pitches and save investors time on routine tasks.
When Chip Hazard, a longtime startup investor at Flybridge, finds a startup he wants to fund, he writes a multi-page investment memo for his partners, outlining in detail all the risk factors and opportunities of a business. Now, he's using AI to help write these documents and saving hours of work.
It's the latest example of how venture firms are eating their own dog food. Investors aren't only funding startups exploring the application of large language models and "agents." They're also experimenting with these tools internally to improve how they source deals, research companies before investing, and track performance.
"If we could free up capacity on more routine tasks and therefore give us more time for judgment," said Hazard, "that's a good trade in our business."
Following the release of ChatGPT, Hazard made a cheeky bet with an associate at his firm: he promised a bottle of wine from his private collection if the associate could build an artificial intelligence that writes investment memos.
Flybridge's memo generator looks like a simple web form. The user uploads a pitch deck and a transcript of the pitch, fills in the round size and valuation, and adds links to the founder's LinkedIn page and the company website.
Under the hood, the memo generator was built on top of OpenAI's o1 model, according to Daniel Porras Reyes, a self-taught developer and Flybridge associate. This model is considered superior to its successors because o1 was designed to spend more time thinking before providing an answer, improving its output quality.
Screenshots of Flybridge's investment memo generator.
Flybridge
Flybridge used CrewAI, a portfolio company, to build "agents" — a new set of artificial intelligence tools that can work autonomously without much human supervision. Those agents can search the web through Exa, a search engine designed for use by agents, and create content about a company's competitive landscape or market size.
In as little as three minutes, the memo generator spits out a Word document with sections on the opportunity, risks, business model, go-to-market strategy, and team. It also proposes a list of follow-up questions for the founders.
A sample investment memo created in a demo of Flybridge's investment memo generator.
Flybridge
Hazard said that by releasing the tool to the general public, Flybridge hopes that founders will run their pitch decks or investment memos through the generator before they meet with the firm. This could give founders an idea of how their pitch comes across so they can smooth out the kinks ahead of time.
Like most generative AI tools, the memo generator sometimes gets it wrong. It might leave a competitor off the list, said Porras Reyes, or reach a wrong number in the financial projections, Hazard added. Still, Hazard said the product shaves hours off of production; he spends less time writing a founder's bio, for instance, and more time thinking about whether they have the right characteristics and the best idea.
Hazard said if the memo generator was more capable, users might be tempted to "check their judgment at the door." He continued, "The point is to have it 'good enough' that you can then start to really apply your judgment."
Founders and investors can access Flybridge's open-source investment memo generator on its website or clone the project on GitHub.
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Aamanh Sehdev is a member of McKinsey's most recent partner cohort.
McKinsey
28-year-old Aamanh Sehdev was named a McKinsey partner this December.
After joining as a summer intern, he's climbed the ranks in just seven years.
Sehdev spoke to BI about how he heard the news and what helped him progress at McKinsey.
Aamanh Sehdev had spent a week in early December trying to distract himself by seeing friends and playing padel.
He'd been an associate partner for two of his seven-year career at McKinsey and knew there was a chance he'd be promoted to partner.
But there was a low number of elections this year, so he thought it was fifty-fifty.
The news usually arrives at the end of the week. But at around 8:30 p.m. on Wednesday, Sehdev received a call at home. It was from Tunde Olanrewaju, managing partner of McKinsey's UK, Ireland, and Israel offices.
"The nerves were kicking in, but he got straight to the point," Sehdev told Business Insider.
"Hey, it's great news. Welcome to the partnership. We're really excited to have you on board," Sehdev recalled Olanrewaju telling him. "I said thanks, but in a slightly higher pitch voice than I typically have."
Sehdev is one of around 200 McKinsey employees promoted to partner this December. Amid a slowdown in demand for consulting services, this year's cohort is one of the firm's smallest in recent years.
The promotion elevates him to one of the most senior positions you can reach in a major consulting firm. Partnerships are participatory, giving individuals a say in the direction of the firm. Those promoted to equity partners receive a share of the annual profits.
Tunde Olanrewaju, managing partner of McKinsey's UK, Ireland, and Israel offices, called Sehdev to give him the news.
Leon Neal/Getty Images
On McKinsey's website, partners are described as "not only meeting McKinsey's high bar for exceptional leadership, but they are also dedicated to finding solutions to some of the world's most pressing challenges."
At 28, Sehdev is one of the youngest in the cohort. He spoke to BI about what it was like to receive the news and what it takes to make partner.
'Enjoy the moment'
Although his call with Olanrewaju lasted only a few minutes, Sehdev spent the next hour and a half on the phone with sponsors and mentors.
"Obviously, there was a lot of excitement, a lot of congratulations, and a bit of a common thread of 'let it sink in, don't rush into the next thing, enjoy the moment,'" he said.
He also called his mother and brother that evening. His parents didn't go to university, so it was a major milestone for the family. "They were super proud and excited," he said. "They've obviously been pretty key in shaping my journey."
But the following morning, it was into the office to carry on as usual and keep the news a secret from his colleagues until McKinsey's formal announcement a week and a half later.
Sehdev said he was still digesting the achievement. In the new year, he's taking a 17-day trip to Australia to "carve out a little bit of time to think about it a bit more formulaically."
His first focus is to switch off and get some sun, he added.
Sehdev joined McKinsey as a summer intern in 2017.
Aamanh Sehdev
Becoming a partner is notoriously difficult and competitive. It's the ultimate goal for many consultants starting their careers.
Not for Sehdev.
When he began studying mechanical engineering at London's Imperial College, Sehdev had never heard of McKinsey.
"It was something that people around me were talking about alongside banking," he told BI. "I turned up to a career fair, it was interesting, and I applied for the internship."
For the first half of his career, Sehdev said he was doing "a bit of a random walk" through a whole host of sectors and different functions. It helped him find the right home at the firm — he now works on a combination of private capital and McKinsey's telecommunications (TMT) practice.
Sehdev acknowledged that seven years was a fast ascent up the ranks, but said that meritocracy was one of McKinsey's benefits.
"What McKinsey has a tendency to do is when you get comfortable, they take you to the next role or level, and then you get uncomfortable again. That snowballed for me over the last seven years."
Sehdev said three reasons he was selected as a partner came through in his evaluation.
First, he always has a focused strategy for what he's doing and what he wants to do next at the firm. Second, he showed entrepreneurship and originality, particularly when it came to creating novel ways to work with the smaller software businesses he concentrates on. Lastly, he invested time with the teams and created a positive, energizing atmosphere.
There's an element of luck involved in it as well, he added, saying he was fortunate to have met managers early on who would stay late in the evenings to teach him.
No matter how good you are, working at a top consultancy can be intense. Sehdev said he carves out time to exercise, spend time with family, and protect his weekends. He doesn't expect that to change now he's a partner.
"My mindset has always been, look, I'll set a really high bar, but I'll not let the micro-events or little things take away too much energy. That's made me better at my job."
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OpenWeb's board ousted the company's founder and CEO, Nadav Shoval, earlier this year.
In his first interview since his removal, he said his situation is a cautionary tale for other founders.
A legal battle between Shoval and OpenWeb is ongoing in an Israeli court.
Nadav Shoval says the conflict that culminated in his dramatic ouster from OpenWeb, the company he cofounded, started with a disagreement over a prospective BlackRock investment.
In his first interview since his removal as CEO, which is still playing out in court, Shoval told Business Insider that tensions with OpenWeb's board bubbled up when the company received "several term sheets" for further investment in mid-2024, including an offer from BlackRock.
OpenWeb, which provides tech to publishers to help manage the comment sections of their sites, create newsletters, and sell advertising, had previously raised $392 million and was last valued at $1.5 billion.
BlackRock's capital infusion, Shoval said, would have been a "game changer," allowing the company to make its fourth acquisition and advance toward an initial public offering. But it hit a roadblock.
"We brought in some of the best bankers in the world to support the process, and everybody was very excited until we started to see that one of the board members, specifically, one of the funds, was really pushing against taking this money," Shoval said, without naming the fund.
Two people familiar with the discussions said some board members had concerns about the conditions tied to BlackRock's proposed investment. They asked for anonymity to discuss private conversations. Their identities are known to BI.
BlackRock declined to comment.
OpenWeb's big-name investors include Insight Partners and Georgian Partners. It has also attracted investments from Samsung's Next investment group, The New York Times, and the famed NYU Stern professor and podcaster Scott Galloway, who sits on the company's board.
Shoval's relationship with his board of directors went rapidly downhill from there — and was thrust into public view.
Shoval's messy battle with the board goes public
Tensions boiled over in mid-2024 when OpenWeb's board changed Shoval's reporting line, a move he felt breached his contract. He sent an ultimatum to reverse the change to the board, which responded by firing him.
Then the company announced to staffers that Shoval would be replaced with an interim CEO, OpenWeb's former chair Tim Harvey.
Shoval went on a rampage.
Cut off from his business accounts, he used his personal Gmail to send a companywide email saying that he refused to step down.
He also took to LinkedIn, writing: "I do not accept these actions. I will continue to fight for OpenWeb's mission and purpose alongside our team."
Shoval made his dispute with the OpenWeb board public in October by posting on LinkedIn.
Screenshot from LinkedIn
Two former colleagues of Shoval and four people who have worked closely with him described him as a force of nature who's extremely passionate about the publishing industry. They said he could also be hotheaded and sometimes lacked the willingness to listen to others, including the board. They declined to be named to protect business relationships. Their identities are known to BI.
In October, Shoval sued OpenWeb and many of its board members in a Tel Aviv, Israel, court, alleging he had been the victim of an illegal boardroom coup enacted so investors could seize control of the company. His complaint argued that he should be reinstated as CEO and able to appoint two new board directors of his choosing.
The litigation is ongoing, and OpenWeb is seeking to have the case dismissed. BI has reviewed copies of some of the related court filings, translated from Hebrew to English.
In denying Shoval's claim for a temporary injunction against his firing, Ariel Zimmerman, the Tel Aviv judge presiding over that case, said the chances of Shoval succeeding in his claim for reinstatement as CEO "do not appear promising, to say the least."
In response to Shoval's suit, OpenWeb said in court filings that the case was a classic situation in which the board of directors had lost confidence in its CEO. OpenWeb said Shoval was trying to extract money that was not owed to him and that he had chosen to give up control of the company when he brought in investors.
In a statement to BI, a spokesperson for OpenWeb said the company was excited about the steps it had taken to set it up for long-term success.
"The company is moving forward without distractions, fully committed to the success of our employees, partners, and the broader community we serve," the statement said.
Shoval told BI he's optimistic that "justice will come" as he continues his legal fight. He said he hoped his story would serve as a lesson to other founders to vet the funds and directors they work with closely.
"No one wants to see the behind the scenes of restaurants," Shoval said. "This is what I feel like I've seen about the VC industry."
Shoval's path to the New York startup scene
Shoval said he's used to defying the odds.
He often describes how he came close to death when he was 2 years old from Kawasaki disease, a rare condition that causes swelling of the blood vessels and can lead to heart problems.
The disease, Shoval said, affected his motor skills, making it difficult to write. He later struggled with dyslexia and didn't finish high school.
After serving in the Israel Defense Forces' elite Maglan commando unit — famed for going behind enemy lines — he moved to New York City in 2012 at the age of 21. There he cofounded OpenWeb, then known as Spot.IM, alongside two other cofounders who have since left the company.
OpenWeb was founded in 2012 under the name Spot.IM.
Kimberly White/Getty Images for TechCrunch
Shoval said he had noticed that publishers and content creators were "under massive threat" from Big Tech companies that wouldn't compensate them for their content.
The startup sought to build tech to keep people more engaged on publishers' websites. It began with the comment section, providing community-management tools and analytics to help make online conversations less toxic. It later acquired three other companies to help publishers in other areas, like advertising and newsletter building.
OpenWeb grew to more than 370 employees and says it reaches more than 150 million active monthly users across sites such as Fox News, CNN, and Yahoo.
Through secondary transactions, as OpenWeb raised more capital, Shoval diluted his stake in the company, leaving him with less than 2% of issued shares and a remaining 5% in unvested options, per OpenWeb's legal filings.
The sales, which OpenWeb calculated earned Shoval tens of millions of dollars, resulted in him ceding his control of the company to its investors.
The board calls Shoval's bluff
Shoval said in legal filings that OpenWeb's sudden decision in mid-2024 to change his reporting line was an illegal move that hindered his management capabilities and diminished his role. The board had decided he would start reporting to a newly appointed temporary executive chair, Omer Cygler, the managing partner of its investor Lion Investment. Shoval had previously reported to the entire board.
Furious, he sent a letter in September to the board demanding it reverse the decision.
OpenWeb's legal filing said Shoval's letter had also set out "excessive and baseless financial demands" amounting to tens of millions of dollars in exchange for his continued appointment as its chief executive. In an attachment to his letter, Shoval mapped out a scenario where he would resign as CEO and help with the search for a replacement until summer 2025, on the condition that the investors bought his shares and accelerated the vesting of his options.
The board called his bluff.
Board members convened an urgent telephone meeting in which the directors who attended, including those appointed by Shoval himself — Galloway and Cygler — unanimously voted for his dismissal.
Scott Galloway invested in OpenWeb in 2021.
Andrew Harnik/Getty Images
In the statement to BI, OpenWeb said: "OpenWeb is laser-focused on continued growth and advancing our mission to foster healthier online discourse — creating a web that is safe for users, profitable for publishers, and fair for advertisers."
Shoval says his ousting is a cautionary tale for other startup founders
Looking forward, Shoval told BI he remained committed to fixing toxicity in online discourse and promoting independent journalism.
Shoval didn't start the company "for a small secondary," he said, referring to money he might have taken off the table were the company to raise a further investment round. "It's not a nonprofit. I'm here also for everybody to make money, but it's not the only reason why I started the business. I'm an extremely mission-driven person. I love what we do."
Shoval onstage at TechCrunch Disrupt in San Francisco in 2019.
Kimberly White/Getty Images for TechCrunch
Shoval maintains that OpenWeb board meetings and decisions were conducted improperly and that he still has the right to appoint two new board directors of his choosing.
He said that he wanted to impart a lesson to other founders: There can be some occasions in startups when "there is inherent conflict between the fund and the founder."
After the huge investment boom of 2021 amid a stock-market rally and low interest rates, many startup valuations plunged in the following years, and IPO and M&A activity dramatically slowed.
"When those funds are successful, they act like a cheerleader," Shoval said. "They agree with you. They follow your strategy. As soon as market conditions change — and it really, really changed — some of those people change."
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