Listen to today’s news (recommended):

Two-Time Olympic Medalist and Navy Seal Raises a $125 Million Venture Fund

The Story: Two-time Olympic medalist, former Navy SEAL, and now a venture capitalist—the resume of Harpoon Ventures’ founder and general partner Larsen Jensen is impressive, and now added to that long list of accomplishments is a raise of $125 million in his firm’s fourth fund.

Jensen also has some impressive supporters who believe in his firm. Harpoon Ventures is backed by an LP group that includes Andreessen Horowitz’s Peter Levine and Jensen’s former Olympic teammate.. Michael Phelps.

Harpoon primarily invests in startups that have one standalone commercial product that can also be sold to and used by federal agencies.

That’s a primary driver for why a16z’s Levine was interested in investing in the firm in the first place. He told Bloomberg’s Lizette Chapman that Harpoon are, “experts at mapping the government landscape, understanding your business, helping find product market fit, procurement, and the ebbs and flows of the government purchasing cycle.”

Expert Take: Larsen Jensen, founder and general partner at Harpoon Ventures, chatted with us about the challenges of raising a fund in 2023, the unique value proposition of Harpoon, and his bold prediction for venture markets in 2024.

Jensen explains what’s unique about Harpoon:

Although Jensen believes AI and national security investing will continue to drive investment dollars in 2024, he sees them disappointing compared to the hype. His “bold prediction for 2024” is that, “these areas tend to be overhyped in the early innings and ultimately go through a trough of disillusionment until they become mass market applicable. So I wouldn’t be surprised if [AI and national security investing] really start to cool in 2024.”

SEC Examining Investment Adviser Use of AI

The Story: If you’re an investment adviser that uses artificial intelligence, the SEC may want to have a word with you.

The Securities Exchange Commission Chair Gary Gesler has expressed continued skepticism about AI and its risks, and the agency is now probing investment advisors on how they use and supervise the technology within their firms.

According to a letter obtained by Vigilant Compliance, a regulatory compliance consulting firm, that was made available to Richard Vanderford at the Wall Street Journal, the SEC is looking to learn more about, “topics including AI-related marketing documents, algorithmic models used to manage client portfolios, third-party providers and compliance training.”

Despite the agency’s sweep, it doesn’t appear that there is suspicion of foul play or misconduct by investment advisors. An SEC source told the Journal that its inspections across firms are not public, and, in fact, the agency has not even confirmed or denied if the examinations exist.

However, this would not be the first time the SEC has involved itself in AI. In July of this year, the agency proposed new rules around AI use, including requiring “firms to neutralize any conflicts in which AI put the firm’s interests above a client’s.”

Establishing rules may be difficult, though. Amy Jane Longo, partner at law firm Ropes & Gray, believes that even if the SEC wants to crack down on AI use within investment firms, the technology is already so widespread it will be tough to enact meaningful change or regulation.

Expert Take: Andy Harrison, CEO and general partner at Section 32, doesn’t expect the SEC to establish rules around investment advisers’ use of AI anytime soon. He does think rules will develop, however, but through internal guardrails set by the industry itself:

“I don’t believe [the SEC] will. In my experience, a lot of it becomes self-regulation by industry players as opposed to hard regulation.”

OUR FIRST VIDEO:

Listen to today’s news (recommended):

If you’re already subscribed, forward this to a friend who is interested in venture or tech news!