Funding data may bring more light onto how the company is perceived by other investors, whether it was successful in funding rounds, and how much it managed to accumulate for a certain time.
Many investment banking professionals or individual investors consider buying funding data to save time and resources and get the needed data faster to execute it immediately. Here are all the details to consider when considering buying data from a data provider.
What is funding data?
Funding data is a part of corporate data, including fundraising rounds, funds raised in each round, the exact investment stages, investors, and other financial data points of firms. It can also include information concerning institutional or individual public investment.
Common funding data sources
Most funding data is collected from various public sources, including whatever information companies publish on their websites or social media channels. It can also come from online news portals, media reports, press releases, and other relevant sources. The most common sources of finding data are the following:
- Wellfound. Wellfound (AngelList) not only lists investors but also has a startup employment board and a way for entrepreneurs to say when they are raising money. Here founders may even carry out their full fundraising transaction with an investor. You can also find an investor search page where you can sort by syndicate lead, angel, seed fund, and VC.
- Crunchbase. It’s one of the greatest free resources for learning about investing portfolios. They charge a few hundred dollars a year for a searchable list with filters. Crunchbase is wonderful for finding who has invested in various firms and analyzing it.
- Linkedin. Investors usually share their board seats and may also have well-structured Linkedin profiles with a lot of information about where they invested, which partners they have, and which companies they’re most interested in.
- Investor websites and blogs. Don’t forget to use common searches to discover blogs made by the company, its founders, or its partners, as well as investor portfolio pages, About pages, and blogs. Some investors will express their interests, recent investments, and investment predictions there are.
Why choose a data provider to buy funding data
Private companies are not required to disclose investments and accumulated funds, so the open data available can be quite limited.
However, some companies opt for transparency and share their data. Data providers or marketplaces have the needed tools and resources to collect funding data and organize it in the way it’s most suitable for a thorough analysis. Moreover, trusted providers in the industry keep the datasets up-to-date, so you don’t have to worry about collecting irrelevant data.
How to test the funding datasets from data providers
The data requirements depend on the intended use. Funding datasets should be updated to reflect current funding statuses. If you also need historical information, it is important to ensure that the details of the funding rounds are accurate.
To test the quality of the data, you need to make sure databases are consistent and up-to-date. Also, check if the data vendor complies with local and global data privacy laws and regulations.
Challenges you may encounter when buying funding data
Funding data supports important investment decisions by assuring the status of a company’s funding and the potential for further growth. Before choosing your vendor, ensure its credibility and timeliness.
- The credibility of the sources. Check which sources the data provider uses to assure getting quality data.
- Data consistency and relevance. Funding data gets irrelevant and outdated quickly, so data providers have to offer complete and constantly updated information. Gathered from various public sources, funding data is usually not consistent. To get the most accurate results and relevant insights, you should only use consistent and updated data.
- Compliance with data regulations. Investors’ personal information may be included in funding information, which must comply with data privacy laws such as the GDPR and CCPA. Region-specific privacy laws apply, and the funding information should follow those laws.
Funding data offers investors a better idea of how a certain company is performing and how other investors are feeling about this particular business and its performance. Analyzing the insights from this type of data helps make data-driven investment decisions and build a better investment portfolio.