- We seek the outliers whose solutions may cause extreme impact.
- We are passionate about the possibility of unexpected outcomes.
- We combat human bias in our thinking.
- We aim to identify and harness unknown unknowns.
- We want to measure uncertainty.
- We analyze and leverage the objective dynamics of Black Swans.
- We dream of extreme impact solutions to urgent global challenges.
Who we invest in
Black Swan is an early-growth venture capital fund. We invest in technology businesses driven by smart entrepreneurial teams, with disruptive ideas for extreme impact solutions.
Typically, we will begin to provide financial and mentoring support around the time an operable version of the solution has been produced.
Where We Invest
We invest across the US and Europe. A particular focus area is emerging talent in the Nordic region – Denmark, Norway, Sweden, Iceland and Finland – countries which have a strong tradition of innovation, and have produced more than 30% of European technology unicorns (start-ups valued at $1 billion) since the year 2000.
How We Invest
Our investment philosophy is rooted in Black Swan Theory (Taleb, 2007) and our screening strategy rests on our development of a unique Black Swan Rating System. Our Black Swan Rating System describes the objective dynamics of potential Black Swans – the mega game-changers of IT and technology – and guides our investment selection.
Black Swan Theory
In Nassim Taleb’s 2007 book, ‘The Black Swan: the Impact of the Highly Improbable’, Black Swan is the term Taleb gives to a highly improbable event with three main attributes:
- Unpredictability – it is outside the realm of regular expectations.
- Extreme impact – the event changes the world as we know it.
- We desire, in retrospect, to make the event appear less random and more predictable than it was – to rationalize it after the fact.
Potential Black Swans are notoriously, and by definition, extremely difficult to spot before the fact. One reason for this is that revolutionary ideas almost exclusively present with so many unknowns – both known and unknown – and such huge risk, that the classic human response – even for risk-ready, enthusiastic VC partners – is to reject the risk and refuse to believe in the opportunity.
Black Swans Then
The largest Black Swan events of recent times in technology include revolutionizers like Apple and Facebook, and, more recently, start-ups like Uber and Airbnb that seemingly came out of the blue to turn entire industries upside down. Few people saw them coming, and even those who were told in detail found it difficult to believe – with some of the most experienced and well-heeled Silicon Valley VCs rejecting opportunities when pitched by the hopeful founders.
Black Swans Now
The potential for Black Swans in tomorrow’s technology sector is huge. This Fourth Industrial Revolution is moving very fast; transformative opportunities are potentially everywhere. And everyone is looking for the Next Big Thing. Artificial Intelligence (AI), for example, with its tantalizing promises of infinite amplification of human intelligence, and parallel enhancements of cognitions of machines will possibly... probably, somewhere soon, propel some of the biggest, blackest swans we've ever seen.
We believe AI will be a very big thing, that its impact will be unprecedented, and within 10 years the world will be very different, both inside and outside of the technology sector. We are already investing and enabling AI innovators who are driving embodied - and ambient AI solutions to help realize the synergies between humans and machines. And we are really looking forward to watching the AI swan reveal itself over the coming years, and to finding out just how disruptive AI can be.
Black Swan Rating System
We always aim to recognize potential Black Swans in their early phases. Our strategy is an active thinking strategy – aimed at palliating, ideally eliminating, the typical bias in thinking that creates fear and clouds judgement. To assist this process, we have developed a unique Black Swan Rating System. Our Black Swan Rating System specifies, and quantifies, the objective dynamics of a potential Black Swan event, and enables an objective unbiased analysis.
The system focuses on the manifold objective dynamics of Black Swan phenomena, and includes measures of scalability, disruption, partner impact, supply- and demand-side network effects, and many other dynamics and sub-dynamics. It is the backbone of our initial investment screening and evaluation. This analysis is accompanied by a comprehensive subjective appraisal of the team, resources and all other aspects of the business.
Where we are going
Using our unique objective Black Swan Rating System, we aim to identify future Black Swans in the technology sector. We will then give ongoing support to entrepreneurs, providing capital, mentoring and introductions throughout the early-growth phase and beyond, steadily building an extreme impact technology portfolio, and growing the businesses and networks of all those within it.
Are you dreaming of Extreme Impact?
We would love to hear from you if:
- You are a smart entrepreneur with a disruptive vision for an extreme impact IT or technology business.
- You have gathered a team of talented people with proven and complementary skills, who share your vision, and are working with passion and dedication to make it a reality.
- Your business or solution is in its early-growth phase.
Black Swan Equity Partners LLP is an appointed representative of Sapia Partners LLP (FRN: 550103) which is authorised and regulated by the Financial Conduct Authority in the UK.