HTI Pitch Competition 2025, $100,000 invesment in the winner! sent

We are underway with our second pitch competition and have already had lots of very promising startups apply. If you're a startup raising you can apply here. If you're an investor, feel free to respond to this email or email me at rishad@healthtechinvestors.com

I would like to share with you the story of RenTech. The most successful investment firm ever which picks investments by removing the human element. 

They have returned 66% annually for 30 years compared to Berkshire Hathaway's annual returns of 20%. Traditional investment firms focus on causation - understanding the intrinsic value of an asset based on economic factors, company performance, industry trends, etc., and predicting how these should cause the price to move.

RenTech, on the other hand, thrives in the realm of correlation. Their approach is to identify repeatable, statistically significant relationships between different data points and future price changes. It's less about why a pattern exists (causation) and more about the fact that, statistically speaking, it does predict an outcome (correlation).

They have built mathematical algorithms which identify these correlations between public market equities and make investments without human intuition and intervention. 

Can this correlation-focused, data-intensive approach be applied to the fundamentally different landscape of Venture Capital?

Traditionally VCs rely heavily on human judgement: evaluating the founding team, assessing market fit and size through interviews and intuition, building networks, and predicting future market shifts based on experience. Causation – understanding why a startup should succeed based on its fundamentals and market dynamics – seems paramount.

VC is unlikely to be ever full automated given the lack of quality data, long feedback loops, illiquid nature of the asset class, importance of founder charm (difficult to quantify without humans) and the fact we are involved in helping founders post investment. 

A data driven approach, where we collect reliable data and analyze it before meeting founders, delay our intuition and biases is the strategy we follow at HTI. 

Thank you for reading,

Rishad