• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to secondary sidebar
  • Skip to footer

3v.org

Venture Capital Matters

  • Pitch a Startup
    • Make a Contribution
  • Market Reports
  • Technologies
    • Technology Events
  • Domain Names for Startups
  • About
  • Contact

Only 38% of Venture Capital Investors Currently Use Data to Source and Evaluate All Investments Opportunities

February 14, 2019 By admin Leave a Comment

PitchBook, the premier data provider for the private and public equity markets, today released the findings of its first annual Venture Capital Data Usage Survey, which uncovers how global venture capital (VC) investors currently leverage data to inform investment decisions as well as plans for adopting machine learning for future decision-making. The survey was administered to 391 VC investors across the US, Europe and Asia during the winter of 2018. According to the findings, respondents across all investor types and geographies rely on a mix of data and personal networks to source and evaluate investments. While the majority (86%) of respondents believe data is important when evaluating investment opportunities, late stage VC investors based in the US and Asia were the most likely respondents to leverage data to inform all investment decisions. Despite growing interest within the asset class to finance the machine learning (ML) and artificial intelligence (AI) category—$24.6 billion invested in 2018—only 8% of investors believe investment decisions will be fully automated in the future. More than 85% of respondents believe there will always be some element of intuition involved in VC dealmaking.

To download the full report and read more about the survey methodology, click here.

“There’s no question that the availability of data has led to whole new way of doing business. The accumulation of data over the years combined with faster computing power has allowed AI-powered innovations to transform entire industries,” said Steve Bendt, VP of Marketing at PitchBook. “As VCs flood capital into the ML/AI sector, we wanted to understand how VCs themselves leverage data and machine learning techniques in their own investment sourcing and decision-making process. Our survey shows strong adoption of data to inform investment decision-making and a growing appetite to increase usage. While the majority of respondents believe VC investing will always involve the human element, there’s enthusiasm to explore how machine learning can automate traditional VC.”

Personal Networks and Data Are Top Resources for Deal Sourcing
The top three most valuable resources for sourcing and evaluating investment opportunities are personal networks (82%), inbound leads (44%) and financial databases (36%). Angel and early stage VCs are roughly 20% more likely to lean on personal networks for investment decision-making than late stage VC and CVC, which show the strongest demand for financial databases, 20% and 22%, respectively. Geographically, personal networks remain the top resource for sourcing and evaluating deals. Asian VCs are the most likely group to leverage data for this purpose, with 20% of Asia-based survey respondents citing financial databases as the most valuable resource, compared to 15% in the US and 10% in Europe. In practice, the most common use cases for leveraging data are financial modeling (20%), refining investment thesis (19%) and sourcing investments (19%). Among the top reasons for missing out on a promising investment opportunity are disagreement on terms (32%) followed by insufficient data (17%) and slow decision-making (15%).

Investment Decision-Making Will Always Balance Data and Intuition
More than one-third (38%) of all respondents use data to source all venture capital investments, whereas 48% claim data informs some investment decisions and 9% don’t leverage data at all. Late stage VCs show the strongest appetite for data-driven investing, with 50% citing data as extremely important and the primary resource for evaluating and sourcing all investments. Similarly, 46% of Asian firms cite data as extremely important, compared to 37% of US firms and 33% in Europe. Of all investor types, angel investors are least likely to leverage data – 14% do not use data in the decision-making process. This isn’t surprising given the limited availability of data on niche and nascent industries, which is a common investment preference for this investor type. In addition to data, the majority of respondents (69%) across all geographies and investor types agree that both data and intuition are important when evaluating VC investments. A higher percentage of CVCs (23%) state data alone is the most important factor, while angel and early stage VCs are more likely to state intuition, 11% and 14% respectively.

VCs Are Bullish on Machine Learning, But Are Proceeding with Caution
Nearly two-thirds (64%) of all respondents do not currently leverage ML technology to inform venture investment decisions; however, of this group, 50% plan on adopting and increasing usage in the future. Taking a closer look at investor types, more than one-quarter of CVC investors have already adopted ML, the highest adoption rate of all investor types. While this group is also eager to increase adoption (47%), early stage VC investors were the most enthusiastic about expanding this capability (55%). Early stage investors were also the most optimistic about relying on ML to fully automate investment decisions in the future, with 11% agreeing with this trend. Asian investors had the highest percentage of ML adoption, with 29% claiming to currently use the technology in decision-making. Although, 24% of US firms also leverage the technology, investors in this region displayed the most interest in increasing usage (51%). Regardless of current usage of ML, 85% of respondents believe VC investment decisions will always involve some element of intuition. Only 8% of respondents feel strongly investments could be fully automated in the future.

Download the full report here.

About PitchBook
PitchBook is a financial data and software company that provides transparency into the capital markets to help professionals discover and execute opportunities with confidence and efficiency. PitchBook collects and analyzes detailed data on the entire venture capital, private equity and M&A landscape—including public and private companies, investors, funds, investments, exits and people. The company’s data and analysis are available through the PitchBook Platform, industry news and in-depth reports. Founded in 2007, PitchBook has offices in Seattle, San Francisco, New York and London and serves more than 23,000 professionals around the world. In 2016, Morningstar acquired PitchBook, which now operates as an independent subsidiary.

SOURCE PitchBook

Related Links
http://pitchbook.com

Filed Under: PR

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Market Analysis

Britain has built the world’s most advanced genome-sequencing infrastructure
European Market for Veterinary Antibiotics
Take-Two will acquire Zynga for $12.7B
ResilientSupplies.com (Resilient Supplies): Supply chain resilience is the key to withstand pandemic-related disruptions
Market Impact of Trade War on Chinese High Tech Industries
Another pandemic may be on the horizon: antimicrobial resistance
Support for Vladimir Putin waning in Russia

Market Research Media

BRIC Investment Funds Have Taken a Beating This Year
ASAPtakeaways.com: ASAP Takeaways have become a global market worth more than $150 billion
Global assets under management (AuM) grew at 12% to more than $112 Trillion in 2021
MetaQuantumComputing.com (Meta Quantum Computing): Overview of quantum algorithms
AIML.ag, AIML (Artificial Intelligence/Machine Learning)
ReleaseWealth.com (Release Wealth): Modern Philanthropy is Technology-Based
Decoy Networks: “decoys become your only way of hiding”

Secondary Sidebar

Technologies

French company captures methane leaking from abandoned mines
Organizations are using a wider range of intelligent automation technologies
Breakthrough Technologies 2021
Technologies to Impact eCommerce
Oxford Quantum Circuits raises £38 million Series A to accelerate R&D and expand into APAC

Tech Events

Jamstack Conf Virtual, October 6-7, 2020
Domain Auction, January 24, 2022
Forrester Announces Full Conference Agenda For Technology & Innovation North America 2021 Live Virtual Experience, November 2–3, 2021
Powerful Keynote Speakers, Musical Headliners Announced for Ignite 2021 Logistics Tech Conference, August 3-5, 2021, San Antonio
The global State of Open Data Policy Summit takes place on Tuesday, 17 May from 17 CET!

Footer

Recent Posts

  • Plant-based food innovation company, TMRW Foods, raises C$2 million and prepares for North American launch with Sprouts Farmers Market
  • How to achieving gender balance in management teams
  • When you feel like you’re spiraling
  • After Successful Tax Season, Embedded Tax Platform April Raises $30M Series A from Fintech Veterans
  • Vita Mojo Raises US$30 Million to Help Restaurant and Hospitality Chains in Europe Tackle the Digital Future
  • Nautical Commerce Raises $30M to Scale Multi-Vendor Marketplace Technology
  • Token Announces $13 Million Series B Funding Round and Appointment of New CEO to Disrupt the Authentication Market
  • Konnecto Raises $21M to establish a new category in marketing technology
  • Sharebite, the Leading Food Benefits Platform, Announces Closing of $39 Million Series B Round
  • Illumina Invests in £30M Venture Fund to Advance Breakthroughs in Human Health

Dossier

Cognizant Wins Multi-Year Contract from National Insurance Company to Accelerate Digital Transformation
The Economist on Twitter: “In a 114-page review of Britain’s foreign, security, defence and aid policy, the government is finally fleshing out what “Global Britain” means
MGN Logistics Acquires California Based Niche Freight Brokerage
SAP to Acquire Business Process Intelligence Company Signavio
euNetworks Acquires The Loop Manchester

Press Media Release

Blubrry Podcasting Introduces Podcast Media Kits for their Podcasters
USAFIS: President Biden Gives Big Boost to U.S. Immigration
Apple Fitness+ Welcomes People at Every Fitness Level to Train Their Bodies and Minds with Meditation and New Workouts Available September 27
Texas A&M University System Regents Approve $70 million Engineering Building for Prairie View A&M University
The Rockefeller Foundation commits USD1 billion to catalyze a green recovery from pandemic

App Coding

Configit Introduces Breakthrough System-Level Configuration Solution
Is Android Studio an Easy IDE Platform to Launch Applications? GoodFirms Review
Trellix Finds Workforce Shortage Impacts 85% of Organizations’ Cybersecurity Posture
Lumigo expands its serverless observability platform to support any modern cloud application
NLP techniques are bridging the gap between text documents

API Coding

DarkOwl Announces Release of Ransomware API
Five Steps to a Secure Cloud Architecture
API-based startup that connects African businesses
One AI to Take on Global Language AI Challenge with NLP-as-a-service Platform for Developers
Are you looking for an API for OCR (Optical Character Recognition)?

Copyright © 2022 3v.org

Technologies, Market Analysis & Market Research

We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
Do not sell my personal information.
Cookie SettingsAccept
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT