PE Firms Should Build Internal AI Muscle Before Pushing It to Portfolio Companies
Many private equity firms launch AI initiatives aimed at portfolio companies to signal innovation to limited partners, but often see uneven results after 18 months of workshops and pilots. The core problem, according to Blake Aber of Predicate Ventures, is a sequencing error: firms try to advise portfolio companies on AI without having built hands-on AI capabilities internally. Aber argues GP teams should first automate their own workflows — such as due diligence memo synthesis, LP reporting, and deal-screening — within the first nine months. This internal foundation gives partners practical experience to credibly guide portfolio companies when real operational challenges arise. Only after that internal muscle is built, typically from month 18 onward, should firms attempt substantive AI support for their portfolio.
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