Venture capital (VC) resources are used by a variety of businesses and researchers, but the primary users fall within three categories: venture capitalists, investors and entrepreneurs.
Venture capitalists commonly need data to source, or find partner VC firms, for a particular investment or to find fund performance data. Comparable company financial data is also commonly sought.
The institutional investor may need to research the VC firm that is pitching to them during a fundraising visit.
Entrepreneurs need to have the latest information on a VC firm to whom they may be presenting their business idea, or need to find firms that invest in their particular type of business. Resources targeted towards this group could fill a few articles!
Venture a Guess?
Let's start with an explanation, albeit oversimplified, of the venture capital process. Venture capital is a type of private equity (PE) capital used to make investments in a company. The company can be in various stages of development, from idea stage to later stage. The capital used to invest in a company forms a VC's fund. The capital can be raised from institutional investors, such as state retirement funds or university endowments. On a smaller scale, investments can come from family trusts and individuals. These investors become Limited Partners in the fund, or LPs. The firm is known as the General Partner, or GP. The companies that receive investment become a part of the fund's portfolio. Companies generally remain in the portfolio for four to eight years, and by then have either shut down, are written off for under-performance, or have been acquired or gone public. Distributions from a sale or a public offering are made in cash or shares to the LPs and the GPs, hopefully beyond their initial investment.
The industry has undergone much turmoil during the past decade, suffering from the economic ramifications of 9/11, as well as the recent banking and real estate fiascos. Yet there still remains a great deal of innovation and capital in the market, with growth opportunities burgeoning internationally. According to Dow Jones VentureSource, over $14 billion was invested by VCs in the U.S. over the first three quarters of 2009. Europe saw $1.8 billion in VC investments during the same time frame. Many companies that are now household names all got their start with VCs: think Google, Apple, and Amazon.com. Resources and Databases
VC industry information falls within the inevitable two categories: fee and free, the former having the most detail and malleable performance data, and the latter making the boss happiest.
VC Resources for a Fee
Databases There are several subscription databases, which vary in functionality, scope and data quality. I will detail five that are well used in the industry. I won't address specific pricing, as this is dependent on several factors. The annual pricing for this group begins around $13,000 and ranges up from there.
This database focuses solely on VC data, including firms, funds, companies and LPs. VentureSource prides itself on data quality, contacting each firm on a quarterly basis. Static fund performance data is provided by investment advisor Cambridge Associates. Dow Jones also provides some nice quarterly reports chock full of statistics. International coverage got a recent boost with the purchase of UK based Library House, which focuses on European VC.
This is a robust database of both VC and buyout information. As well as profile data on firms, funds and companies, the database has long been the reigning king of reporting fund internal rates of return (IRR) and performance benchmarking. As of Dec. 2009, what was formerly known as VentureXpert will be offered exclusively as a module for purchase in the ThomsonONE Analytics product line. The data is endorsed by the National Venture Capital Association (NVCA) and the European Private Equity and Venture Capital Association (EVCA)
UK based Preqin brings a more global perspective to PE data, with a broad geographic focus. The seven year old company also trumpets its data quality measures. This includes having a multi-lingual analyst base that monitors regulatory filings, contacts firms and utilises the U.S. Freedom of Information Act. Preqin's PE package can be broken down into 4 modules. Its Performance Analyst module is a competitor to VentureXpert's performance database. Preqin also provides a number of items for free, including a benchmark report, research reports, and a newsletter.
Capital IQ is a multi-faceted database and workflow management tool designed for the global investment and financial services industries. It offers data on thousands of companies, industries and transactions with the ability to drill down and create custom data, notes and reporting underneath that data. The database can be used in a number of ways, from deal tracking and relationship management to customisable search screening, targeting and report creation.
The pitch is that their database is a direct competitor to Capital IQ, based on its capabilities and extensive content. Founded by former Dow Jones employees, the three year old database's focus has shifted somewhat from other private equity, such as buyout data, to building up the VC portion of the database. Pitchbook excludes firms doing business solely outside the US. The database covers LPs, service providers, (lawyers, banks, accountants), investors/funds and companies/deals. A free newsletter is available. They are also rolling out a performance module that will include returns data.
Some other databases to check out:
Private Equity Data Center, http://pedatacenter.com/pedc/, Portfolio Company Analysis Tool, $195, Valuation and Deal Term Database
Capital Hunter, http://www.capitalhunter.com/, investor and funding directory, $59/quarter, custom research services
Directories Historically, there have been two directories synonymous with old school venture capital. They are now owned by the two main PE data providers:
Traditionally the directory to go to for a comprehensive listing of every VC firm in the world. The hardcopy directory covers 4,000 active PE and VC firms, $750, and the online version contains 12,000 firms, $995, from Thomson Reuters.
Venture Capital Journal/European Venture Capital Journal, both Reuter's publications, provide a monthly high-end glossy print and regularly updated online version, $1680 (VCJ),
Now to the good part, the free stuff! Resources abound and I will detail a few that provide some interesting coverage.
Databases and Statistics PricewaterhouseCoopers Money Tree Report, www.pwcmoneytree.com, using Thomson Reuter's data, tracks quarterly investment activity, US only. Also an Israeli investment version.
National Venture Capital Association, www.nvca.org, is a robust site offering PWC's Money Tree statistics and studies to non-members. They partner with
European Venture Capital Association, www.evca.org, also provides a wealth of statistics and surveys free of charge
British Venture Capital Association, www.bvca.co.uk, provides investment, economic and performance research, case studies and industry guides
Pitchbook and Preqin both offer some nice reports. Sign up through their websites. Pitchbook's PE Breakdown Q3 2009 : http://digbig.com/5bbaae
Directories/Networks Crowdsourced networks/directories/databases are popping up, seeking to ‘democratize' information on VC, especially targeted towards start-ups. Caution may be taken around data integrity, but on the whole, these directories provide a valuable service to those on a bootstrapped budget, and are becoming competitive with the large service providers:
ChubbyBrain, http://www.chubbybrain.com/, their Karma Model means that the more data you contribute, the greater the access to database capabilities. They have also partnered with Fast Company to provide research reports on investment activity.
CrunchBase, www.crunchbase.com, created by popular web technology blog site TechCrunch
TheFunded, www.thefunded.com, not a directory per se, but a site where entrepreneurs can rate their experiences with VC firms. Like a cross between a VC reality show and consumer reports.
Fig.2: ChubbyBrain
News News sites on venture activity abound, but these two provide a little something extra:
AltAssets provides a broad range of coverage by geographic region, as well as industry focus and an LP database, www.altassets.com
peHUB is an interactive forum for the venture and buyout industries, featuring opinionated contributors that write about issues and news in a blog type format,
The are many resources available to the VC industry. When evaluating them, it's most important to check up on accuracy. Discrepancies in the data and between providers exist, and research techniques vary, from outsourcing data collection offshore to relying on surveys filled in by the VCs themselves. The data is only as accurate as the people who collect and input the information! The recent influx of collaborative networks providing free research may have a productive impact on the data environment. The resources will continue to evolve as user demand and searchers become more sophisticated, and that you can venture a bet on.
Heidi Longaberger, M.L.S Kent State University, has over 15 years of business research experience, having worked in corporate information centers in the broadband, telecommunications, cable, media and venture capital industries. Heidi provides research and analysis on a vast range of technologies, competitors, markets and strategic planning initiatives. Her own independent research business, Longaberger InformationWorks, will be making its debut in Q1 2010. Heidi can be reached at Heidi@Longabergerinfo.com; LinkedIn; and Twitter.
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Venture capital (VC) resources are used by a variety of businesses and researchers, but the primary users fall within three categories: venture capitalists, investors and entrepreneurs. 
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