Work
Identifying the best performing invested companies and investment funds
We built a custom live web app that hugely improves the efficiency of a venture capital firm’s research into potential new investments and potential partners in investments.
Customer
An established venture capital firm that invests in start-up and early-stage companies.
Problem
The venture capital sector is becoming increasingly competitive with an ever-increasing number of funds seeking to invest in the world’s most promising new businesses. In addition, the number of startups with potential has also exploded in recent years. The company was looking for a data-driven way to efficiently explore this fast-changing market and gain insights into its competitors from their portfolios.
Solution
Via the Crunchbase database and API, Faculty collected investment data on over 44,000 investors and 500,000 startup companies. We then devised a scoring for the performance of each investment fund according to whether the ‘exit from investment’ was successful or not (including recording such information as when the startup was acquired, when it went to initial public offering, or when it was dissolved). This score allowed us to compare the success of different investment funds.
Next, we carried out a network analysis of investor companies and invested companies. We also identified investors that tend to co-invest. In addition, natural language processing was employed to identify sectors that companies invest in. This analysis found that while some firms have a broad portfolio, others tend to specialise. Along with the scoring we had devised, this offered valuable information for the company as a means of identifying good potential partners in future investments, and in which sectors.
Finally, these analyses were combined into an app that allowed the company to search easily for a company and, at the touch of a button, gain insight into their track record. Previously, obtaining such information would have been highly labour-intensive and only possible manually.
Impact
We built a custom live web app that hugely improves the efficiency of the company’s research into potential new investments and potential partners in investments. This has freed up the client’s team to spend more time looking for investment opportunities.