What is instinct in investing? Instinct is what you can’t unsee once you’ve seen it. It was the question at the heart of the “Algorithm vs Instinct” panel at Wave by Vento in Turin.  Let’s unpack.

The stage covered both ends of the spectrum. QuantumLight barely uses instinct at all: its fund runs on an AI system that scans billions of data points to decide where the money goes, with the stated goal of nearly removing human judgment from the process. Cherry and Connect back founders the old-fashioned way, by meeting them and betting on a person before the numbers make the case. A fascinating, multi-dimensional matter, where art meets science meets… gut.

At inception, two things matter, and instinct is always there for both:

→ The founder: what’s their superpower. That “did they just blow my mind?” reaction.

→ The upside: if all the stars align, how big this could get, which takes imagination.

At pre-seed, the founder is our dataset. Our data is the conversations we have with founders. Our algorithm is our thesis on them. We’ve codified the founder attributes we look for. There’s no secret sauce: they’re on our website, and we keep iterating on them:

→ Technical depth: technology is fundamental to the product and the problem being solved.

→ Earned insight: conviction developed through lived experience, not just opinion.

→ Drive for the extraordinary: moving faster and solving problems others cannot.

→ Design for defensibility: technical depth that creates structural advantages that are difficult to replicate.

But unexamined instinct turns into bias, and you end up backing founders who look and sound like past winners. So we treat instinct as a hypothesis and use diligence to test it. Like luck, instinct gets better with work. Track your decisions and revisit the ones you got wrong.

Will AI pick deals? For traders and passive capital, yes. But VCs like me aim to be a true partner to the founders in the company journey. And that requires trust. Trust that you earn with empathy, radical candour, and being right in your advice, which - guess what - most of the time is about being right with your instinct.

An instinct fed by staying connected to the founders, their team, their product, their customers. From the first meeting to the end. That part has always been human and stays human. And it is the fun and most rewarding part. As an example, at the time of our investment in Aikido in 2023, I spent time in Ghent to get to know Willem and Roeland personally so that my instinct was able to spot their special fabric very clearly.

Thanks to Andrea Gennarini for hosting and the Vento team for putting together a great conversation.