Basis Set Ventures doesn’t want to be your typical venture capital firm. First, there’s the fledgling VC firm’s focus on a technical area that has seen some disillusionment in recent years: machine learning and artificial intelligence. Sure, AI has become something out of startup bingo, tacked on in pitches and often stretched behind meaning. Basis Set founder Lan Xuezhao is confident she and her team can figure out what’s real and what’s not. “We want to transform the way people work,” she says.
Basis Set is different in another meaningful way, too: a woman-led VC firm, it has recently operated with two women investment partners in Xuezhao and Chang Xu, a partner who joined the firm from Upfront Ventures last year. Now, Basis Set has added its third woman investment partner in Sheila Vashee, giving the firm three women at the top of its investment committee.
Vashee joins Basis Set from Opendoor, where she led the unicorn’s growth team, including marketing, partnerships, operations and some of its product. Before her two-and-a-half year stint at Opendoor, Vashee was an early employee at Dropbox, where she helped oversee marketing and the launches of its business product. At Dropbox she sat close to Xuezhao, who joined in 2013 and led corporate development before departing to found Basis Set in 2017.
In an interview, Vashee says she decided to join Basis Set in part because of its thesis; in part because of a culture that operates differently from the typical venture shop. “I believe that there’s going to be a new wave of work tools that really revolutionizes every industry on every level, and I want to build that future,” Vashee says.
Given its self-imposed focus on companies utilizing machine learning and AI, Basis Set has to be selective in what companies it pursues. Like other investors that use data to attempt to find better deals, Basis Set’s data science team studies companies’ leadership and launches to move fast when attractive fundraises are coming together, hoping that its speed and accessibility will allow it to join rounds pursued by the best-known VC firms. A network of technical advisors, meanwhile, is intended to evaluate what startups are really using machine learning and AI in their core software.
“We want to be superhuman in the sense that our data science team builds the armor that makes us see better, see further, run faster and process a lot more deals and high-quality investments,” says Xuezhao.
With 50,000 founders in its database, the partners at Basis Set hope they can evaluate more startups in more places, including those who might fall into the “blind spots” of traditional VC because founders don’t have the typical background or base their company in Silicon Valley. That includes the partners training the firm’s algorithms hands-on. “Every morning, if I’m not doing anything, I’m in my inbox, saying whether a company is good for us and label data myself. That makes the system better,” Xuezhao says.
So far, Basis Set’s approach has led to investments such as Workstream, a hiring platform; Rasa, which provides conversational AI tools to big businesses; and Ike, which offers automation tools to the trucking industry. (It also includes Lime, a business that may use data but is known better for its rental scooters.) Vashee brings perspective from collaboration software and real estate software given her background, but the partners say their focuses within Basis Set are flexible.
Basis Set’s partners hope that they stand out because of their young firm’s culture, too. Vashee says that her experience and Xuezhao’s as professional moms with kids at home during the current Covid-19 work-from-home environment helps them relate to some founders who might not connect as well to more traditional VCs, but who are going through many of the same things: toddlers getting sick, the need to take early evening breaks and then get business done late into the night after the family’s asleep.
“My kids are right outside the door screaming now, and that wouldn’t work in a normal VC,” Vashee says. “But I think integrating every part of our lives makes us better at everything we do, and actually makes founders relate to us better.”