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Arjun Sethi speaks with the confidence of someone who knows more than other people, or else who knows that sounding highly confident can shape perception. Either way, when he tells me over Zoom that \u201cin five years, I\u2019ll have 50% of the world\u2019s private data\u201d at his fingertips, and that it will be \u201cimpossible to compete against me,\u201d he says it with all the authority of Warren Buffett dropping stock market truths.<\/p>\n
Sethi, a co-founder of the venture firm Tribe Capital<\/a>, is talking about Termina<\/a>, a subscription-based AI software platform for \u201cquantitative diligence\u201d that Tribe more recently spun out and which Sethi says can improve results for as many investors as he can sign up. Yet the mere prospect raises questions. Namely, if Termina is so good, why are Sethi and Tribe giving other investment firms a way to better compete? Relatedly, why should other investors trust Termina, which ingests its customers\u2019 data to improve over time?<\/p>\n First, it\u2019s worth learning more about Termina itself, which soft launched last month with two products. At a high level, one of those products is a dashboard that aims to help investors quickly gauge the health of any company by comparing it across the companies in Termina\u2019s initial proprietary dataset grows with every new customer that Termina secures. The second offering is designed to help investors understand external forces at play, including expected market changes. Think of Termina as \u201cgiving you the power of 1,000 associates,\u201d says Sethi.<\/p>\n Sethi declines to disclose early customer names, but he says they include pension funds, sovereign funds, and private equity funds, all of which he collectively characterizes as a \u201clarge class of capital deployment folks who want to stay under the radar.\u201d<\/p>\n What he\u2019s happier to discuss are his ambitions for the business, whose biggest starting advantage, says Sethi, is transactional data on roughly 1,500 companies that Termina has fed into more than one large language model (that Sethi declines to name), along with an LLM that he says Termina has itself created to enhance investors\u2019 benchmarking capabilities.<\/p>\n To leverage the tool, Termina\u2019s customers also give the outfit their own raw data. \u201cThey might be using it for M&A, so a private equity firm will dump their own data [into it] and the same is true of any other VC firm,\u201d he says. What that software spits out, ostensibly, are comparison datasets of companies that exist \u201cacross the board, across all stages,\u201d says Sethi, who calls Termina, which was founded just six months ago \u2013 the \u201ctrue Bloomberg of private markets.\u201d<\/p>\n Naturally, some will scoff at the prospect of Termina handling so much sensitive data, which is every firm\u2019s most precious resource. This may prove doubly true given Termina\u2019s ties to Tribe Capital.<\/p>\n Still, he dismisses such concerns. For one thing, he says, Tribe invests in seed- through Series C-stage companies and looks for venture-like returns. Termina, meanwhile, \u201cis enabling anybody in any asset class to be able to think about how to invest into software companies, regardless of stage, so it\u2019s two very different strategies.\u201d<\/p>\n Sethi \u2013 who sold an earlier company called MessageMe to Yahoo, then worked with VC Chamath Palihapitiya at his firm Social Capital before co-founding Tribe \u2013 also suggests he has the reputation needed to pull off what he\u2019s attempting.<\/p>\n \u201cPart of it,\u201d Sethi says of persuading other investors to use Termina, \u201cis you just inherently build a lot of trust over a long period of time.\u201d<\/p>\n We\u2019ll see. Certainly, one can see both the advantages and disadvantages of Termina\u2019s close relationship with Tribe, which owns a stake in Termina. (Termina has so far raised slightly more than $10 million, including from Sethi personally.)<\/p>\n A team that has long worked together is one advantage, for example. In addition to Sethi \u2013 who stepped down as Tribe\u2019s CEO last December, assuming the role of chairman and chief investment officer instead to focus in part on Termina \u2013 the seven-person startup includes others who split their time between Termina and Tribe.<\/p>\n Among these is Alex Chee, who cofounded MessageMe with Sethi, joined him at Social Capital, and subsequently co-founded both Tribe and Termina with him. Chee oversees Termina\u2019s day-to-day operations; he is also still Tribe\u2019s chief product officer. Jake Ellowitz, another Termina co-founder and, for a short time, a Social Capital employee, is Tribe\u2019s CTO.<\/p>\n Conversely, Tribe itself is fairly young and has yet to really prove itself. The 30-person outfit boasts an impressive $1.6 billion in assets under management already, but it was founded just six years ago. It has enjoyed some success from investments in crypto tokens, but its other investments have yet to exit and the trajectory of some of those bets is unclear, highlighting the limits of quantitative analysis. Take Carta, the cap table management company that has come under fire for tactics that some see as questionable, or Bolt, the one-click checkout company that was buzzy until it wasn\u2019t.<\/p>\n It\u2019s also worth noting Termina\u2019s clients aren\u2019t agreeing to share their data with the outfit exclusively, so if someone\u2019s black box is better, Termina could be toast.<\/p>\n Again, Sethi shakes off talk of challenges. \u201cThe reason why we exist and why customers work with us is that we have the best data in the world, and we have the best product. We don\u2019t have any specific patents. Everything we do is trade secrets. And our tool is not 10x better than what\u2019s out there; it\u2019s, like, one thousand times better than what people\u2019s existing workflow looks like.\u201d<\/p>\n As for what that means for Tribe, he apparently has bigger ambitions now. \u201cMy whole goal is that as one venture firm, I could only do so much. As a company, I can just do that much more.\u201d<\/p>\n<\/p><\/div>\n