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VC Arjun Sethi talks a big game about selling his company-picking strategies to other investors; he says they're buying it

Image Credits: Shai Askenazi

Arjun Sethi speaks with the confidence of someone who knows more than other people, or at least knows that sounding highly confident can shape perception. Either way, when he tells me over Zoom that “in five years, I'll have 50% of the world's private data” at his fingertips, and that it will be “impossible to compete against me,” he says it with all the authority of Warren Buffett dropping stock market truths.

Sethi, a co-founder of the venture firm Tribe Capital, is talking about Termina, a subscription-based AI software platform for “quantitative diligence” that Tribe recently spun out. Sethi says it 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’ data to improve over time?

Termina was founded just six months ago and soft launched last month with two products. One is a dashboard that aims to help investors quickly gauge the health of any company by comparing it across the companies in Termina’s initial proprietary dataset, combined with the customers' own data. The second is designed to help investors understand external forces at play, including expected market changes. Think of Termina as “giving you the power of 1,000 associates,” says Sethi.

Sethi declines to disclose early customers' names, but he says they include pension funds, sovereign funds, and private equity funds, all of which he collectively characterizes as a “large class of capital deployment folks who want to stay under the radar.”

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He’s happier to discuss his ambitions for the business. Its biggest starting advantage, says Sethi, is transactional data on roughly 1,500 companies that Termina has fed into multiple third-party large language models (Sethi declined to name them), along with an LLM that he says Termina has itself created to enhance investors’ benchmarking capabilities.

To leverage the tool, Termina’s customers also give the outfit their own raw data. “They 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,” he says. What that software spits out, ostensibly, are comparison datasets of companies that exist “across the board, across all stages,” says Sethi, who calls Termina the “true Bloomberg of private markets.”

Some will scoff at the prospect of Termina handling so much sensitive data, which is every firm's most precious resource. This may prove doubly true given Termina's ties to Tribe Capital.

Sethi 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, “is enabling anybody in any asset class to be able to think about how to invest into software companies, regardless of stage, so it's two very different strategies.” He also insists that Termina "does not share data with Tribe; they are two separate companies, and there are strict contractual and ethical walls to separate them."

Sethi – who sold an earlier company called MessageMe to Yahoo, then worked with VC Chamath Palihapitiya at his firm Social Capital before co-founding Tribe – further suggests he has the reputation needed to pull off what he’s attempting.

“Part of it,” Sethi says of persuading other investors to use Termina, “is you just inherently build a lot of trust over a long period of time.”

We’ll see. Certainly, one can see both the advantages and disadvantages of Termina’s close relationship with Tribe, which owns a stake in Termina. (Termina has so far raised slightly more than $10 million, including from Sethi personally.)

A team that has long worked together is one advantage, for example. In addition to Sethi – who stepped down as Tribe’s CEO last December, assuming the role of chairman and chief investment officer instead, to focus in part on Termina – the eight-person startup includes others with ties to both Termina and Tribe.

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’s day-to-day operations. Jake Ellowitz, another Termina co-founder and, for a short time, a Social Capital employee, is Tribe’s CTO.

Conversely, Tribe itself is fairly young and has yet to 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’t.

It’s also worth noting Termina’s clients aren’t agreeing to share their data with the outfit exclusively, so if someone else's black box is better, Termina could be toast.

Again, Sethi shakes off talk of challenges. “The 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't have any specific patents. Everything we do is trade secrets. And our tool is not 10x better than what's out there; it’s, like, one thousand times better than what people's existing workflow looks like.”

As for what that means for Tribe, he apparently has bigger ambitions now. “My whole goal is that as one venture firm, I could only do so much," Sethi says. "As a company, I can just do that much more.”

[Update: This story originally stated that Alex Chee is also Tribe Capital's chief product officer, but Chee stepped down from that role in October to focus on Termina.]