How does XN make investment decisions?

Gaurav Kapadia, the founder of XN, employs a distinctive approach in making investment decisions. He emphasizes the importance of diversity in improving organizational and investment outcomes. Kapadia argues against the misconception that diversity can harm returns, noting that data supports the opposite, and he actively shares this data to influence perceptions positively. XN also takes an authentic approach towards diversity, integrating it into their mission and business objectives, rather than treating it as a mere compliance task. This approach is believed to enhance the quality of decisions and outcomes 1.

Another key strategy in their decision-making process is breaking down existing network effects by leveraging data. XN employs data to overcome biases that often limit opportunities to a particular network, thereby broadening their investment horizon and enabling them to make more inclusive decisions 1.

Additionally, XN supports the concept of incubating investments, especially for minority and women managers, providing them with initial capital, advice, and support to help them gain what Kapadia refers to as "escape velocity." This support aims to equip these managers to become successful in the investment field, reflecting a commitment to both diversity and performance 1.