Data Driven: Venture Capital
O W N T H E
Future.
Our mission is to help people see
and make sense of the future so
they are inspired and able to drive
their business forward.
Data Driven: Venture Capital
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TRUSTED BY THE WORLD’S LEADING VENTURE CAPITALISTS
“Think about the fundamental value chain of venture capital.
Find investments, assess investments, build market leaders…
CB Insights is positioned to be a market leader in helping
companies find investments”
Pat Grady
Partner, Sequoia Capital
Data Driven: Venture Capital
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Venture capital is a
competitive game.
Here’s how data can give
you an unfair advantage.
From sourcing deals to analyzing
markets faster to finding talent for
your portfolio to identifying
follow-on investors to pinpointing
acquirers, data is power.
Data Driven: Venture Capital
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From conversations with our VC clients,
we identified 21 data-driven strategies the
world’s top VCs use to gain an advantage
at every step of the VC lifecycle.
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FIRST, WHAT VCs DO
This is the venture
capital circle of life.
Data, as you will see, is a
weapon at every step.
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See the Deal
How to build a deal sourcing engine that
sees the right deals at the right time
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SEE THE DEALS EARLY
Determine who is going to
raise before they’re raising
The average time
between rounds is
Seed to A = 17 months,
A >>> B = 18 months,
etc.
Armed with these facts, you
can build a constant feed of
companies who are about to
raise again. Sit back and get to
companies early.
#1
Data Driven: Venture Capital
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SEE ONLY THE RIGHT DEALS
See every deal in geographies
& industries of interest
You’re a series A investor
interested in fintech and
want to see every angel
or seed fintech deal in
the last 12 months.
Or you want to see every Silicon
Valley early stage deal likely to
raise in the next 6 months.
Done.
#2
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FIND THE HEROES. LOSE THE ZEROS.
Quickly target the
best companies
Use Signals such as media chatter,
hiring, social signals, web traffic,
partner & customer signings and more
to quickly determine which companies
have momentum. And which do not.
#3
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HAVE THE DEALS COME TO YOU
Thought leadership /
build your brand
Want to let entrepreneurs
know you’re interested in
insurance tech or HR
tech or digital health or
[insert any industry]?
Create data-driven blog /
guest posts in minutes -
not days or weeks. Ensure
founders in your space know
you’re the place to go.
#4
Data Driven: Venture Capital
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FIND MORE DEALFLOW SOURCES
Expand your network
Use data to identify early stage investors
who can bring dealflow, mid- and
later-stage investors who can serve as
follow-on investors and acquirers who
might eventually buy your portfolio
companies.
#5
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SEE BETTER DEALFLOW
Track your syndicate
(or wanna be syndicate)
Identify the top investors in a space and
create triggers that allow you to see their
deals when they happen so you can develop
an outreach cadence that develops or
deepens syndicate relationships.
#6
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GET X-RAY VISION INTO FELLOW VCs
Stalk your peer firms.
Everyone has those firms
they view as competitive
peers. Who and what are
they investing in? What
deals did they just do?
Which investors are they
cozying up with and sourcing
deals from? Find out who is
sending them deals and and
build those relationships.
#7
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ENSURE DEALS NEVER SLIP BY
Use lineage tracing to ID
companies and investors
you should know
The best VCs use data to
analyze the deals they missed
and figure out where the holes
in their deal sourcing net are.
Build your network
so you never miss
another deal.
#8
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Assess the Deal
How to assess the attractiveness of a
company and the market it competes in
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TRACK THE SMART MONEY
Assess the quality
of investors
Is the smart money investing in this
space, have they moved on or were
they never interested?
#9
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AVOID THE VALLEY OF DEATH
Understand rate of
follow-on activity.
Are companies in this space trapped at the
seed or Series A stage or is there later
stage capital available? Does this industry
have a fundraising valley of death?
#10
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Don’t have money for an
army of analysts or
research reports to test
your thesis on markets.
Use data on investments,
exits, and analyze where the
smart money is betting to
figure out whether a market
is attractive of not.
LET OTHERS DO THE LEGWORK
Refine your
investment thesis.
#11
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DON’T TRAP YOUR MONEY
Analyze health of exit
activity in the space.
What have exits in this market looked like?
Is there a history of venture-level exits in
this space? If not, do you have conviction
that this company will be the first?
#12
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UNDERSTAND COMPS
How competitive
is the space?
How well funded are competitors in this sector
vs the company I’m evaluating? What’s the
momentum of the companies in this sector?
Is there too much competition?
Or if there is no competition, why not?
#13
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DON’T REPEAT HISTORY
What failed?
Who are the companies in this market that
failed? How much funding did they have?
From who? Did competition kill them? Was the
market not big enough?
Can I learn anything by studying these failures
or talking to those founders or investors?
#14
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Win the Deal
How to give yourself a legup and provide
value pre-close to win competitive deals
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ARM THEM WITH COMPETITIVE INTEL
Keep them posted
on competitors
Share insights on competitors - funding, news,
strategic moves - that help busy founders
understand what is going in the market
without having to do the legwork.
#15
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MAKE YOURSELF INDISPENSABLE
Make them smarter
on the industry.
Give founders insight into industry and
competitive trends and a view into where
things are going. Use data from financings,
exits, news, patents, earnings calls and
more to become a partner that makes them
smarter and saves them time.
#16
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CREATE A SPACE TO WORK TOGETHER
Collaborate with them on
pressing strategic questions.
Share the industry landscape Collection you
built on CB Insights during diligence and use
it to discuss strategy, competition, recent
events, companies they might want to
poach from, etc.
#17
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Nurture the Deal
How to help your companies scale
and get to a good outcome
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WIN THE WAR FOR TALENT
Poach talent for
your companies.
Identify struggling firms using the Mosaic
score or look for exited companies that might
have talent becoming available post-earnout
to help your portfolio win the war for talent.
#18
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FIND THEM THE NEXT CHECK
Pinpoint follow-
on investors.
Want to be ready when your portfolio company
is ready for the next round? Identify strategic
or financial investors who you want in the next
round and help your company raise faster,
earlier and smarter.
#19
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FIND EXIT OPPORTUNITIES
Identify potential acquirers.
Keep tabs on every potential acquirer globally
by understanding their activity levels, prior
valuations paid and strategic areas of focus.
Use this data to build relationships between
your portfolio company and its executives and
potential buyers for now or down the road.
#20
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2ND PLACE IS THE FIRST LOSER
Keep them ahead
of the competition.
What are competitors upto?
What’s their financing situation?
How is their momentum?
#21
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YOUR DATA-DRIVEN VC CHECKLIST
#1
Determine who is going to
raise before they’re raising
#2
See every deal in geographies
& industries of interest
#3
Quickly target the
best companies
#4
Thought leadership /
build your brand
#5
Expand your network
#6
Track your syndicate
(or wanna be syndicate)
#7
Stalk your peer firms.
#8
Use lineage tracing to ID companies
and investors you should know
#9
Assess the quality
of investors
#10
Understand rate of
follow-on activity.
#11
Refine your
investment thesis.
#12
Analyze health of exit
activity in the space.
#13
How competitive
is the space?
#14
What failed?
#15
Keep them posted
on competitors
#16
Make them smarter
on the industry.
#17
Collaborate with them on
pressing strategic questions.
#18
Poach talent for
your companies.
#19
Pinpoint follow-
on investors.
#20
Identify potential acquirers.
#21
Keep them ahead
of the competition.
Data Driven: Venture Capital
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If you’re a client of CB Insights and
aren’t using the platform to do any
of these and would like to learn,
please contact us.
If you’re not a client and would like to
learn how to become a data-driven VC,
we’d love to talk to you.
OWN THE FUTURE.
Data Driven: Competitive Intel
cbinsights.com
@cbinsights