Data driven venture capital model

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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.
Data Driven: Venture Capital 
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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.
Data Driven: Venture Capital 
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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
Data Driven: Venture Capital 
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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
Data Driven: Venture Capital 
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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
Data Driven: Venture Capital 
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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
Data Driven: Venture Capital 
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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
Data Driven: Venture Capital 
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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
Data Driven: Venture Capital 
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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
Data Driven: Venture Capital 
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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
Data Driven: Venture Capital 
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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
Data Driven: Venture Capital 
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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
Data Driven: Venture Capital 
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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
Data Driven: Venture Capital 
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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
Data Driven: Venture Capital 
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Win the Deal
How to give yourself a legup and provide 
value pre-close to win competitive deals
Data Driven: Venture Capital 
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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
Data Driven: Venture Capital 
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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
Data Driven: Venture Capital 
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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
Data Driven: Venture Capital 
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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