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The COVID-19 pandemic has dramatically affected the venture capital market. Investors are opting to put their money on established brands instead of emerging ones. It’s much safer to invest in stable brands than upcoming brands. That puts emerging entrepreneurs at a significant disadvantage. Most end up lacking the much-needed capital to boost their businesses.

Among the most affected by this trend are the minority groups. These minority groups include blacks, women, and Latinos. In 2020, women startups received 13% of the cumulative venture dollars. That was a decline of 2.5% from the past year. Only 2.6% of the total venture dollars was raised by people of the black and Latin race. This is even though they comprise 32% of the entire United States population. One of the best solutions to venture capital inequalities is artificial intelligence (AI). By harnessing the power of AI and big data, one can bridge the gaps in venture capital funding. Here is how artificial intelligence can achieve that.

First, artificial intelligence eliminates bias on people based on location, race, or experience. Transparency is introduced to the process. AI presents a data-driven approach. The only parameters used to decide who gets the venture dollars are real data. AI allows entrepreneurs to use several future growth predictive factors. These factors include product differentiation, consumer sentiments, and distribution. Venture capitalists can be able to gauge the future of a startup or small brand using such info. AI has introduced merit to the process. Only the most outstanding business venture is funded.

One other benefit of AI is that it helps answer an investor’s specific questions. AI will process your questions and give you sufficient data on your query. Also, investors don’t have to attend conferences or tap personal networks to spot top brands. Knowing the right brands to invest in is just a click away. One company using artificial intelligence to help brands raise capital is CircleUp. Results from their AI approach have been excellent. 55% of the companies that received venture capital had a female founder. 35% of the companies that raised equity had a founder outside the white race. In conclusion, policymakers need to strengthen AI-innovators. That will help achieve full democratization of the venture capital market.