Product Idea: Reverse Engineering VC Investment Strategies

The other day I found myself on a VC website. I went to the portfolio page, looked at all of their investments and from that inferred what that firm’s investment strategy was by sector, stage & geography.

This is not a simple thing to do, but it can be done. It helps that I’ve been working in the VC sector a long time and understand a fair bit about VC firms and how they invest. But honestly anyone can do this if they spend enough time distilling the key facts about each and every investment and then looking at these facts across the entire portfolio across time.

Venture capital firms don’t do a great job on their websites of explaining what they invest in and what they do not invest in. Some of that is most VC websites aren’t particularly great to begin with. Some of that is investment strategies change and evolve over time. Some of that is VC firms tell themselves they do one thing but actually do another.

This is frustrating for entrepreneurs. They send me an email thinking their investment is a perfect fit for USV and then they quickly get an email back from me saying “this is not a fit for USV”. It drives them crazy.

The very best way to know what VC firms invest in is to look at what they have invested in, particularly recently (the past few years).

So an automated tool that crawls VC websites, pulls the links to each and every portfolio company, categorizes these investments by stage, sector, geography, and ideally a host of other things, would be incredibly useful.

There are a few things that will be tricky about doing this. Figuring out when the VC made the initial investment is one of them. You look at Etsy on the USV portfolio page and you might think “USV invests in late stage marketplace businesses” but the fact is that we made that investment in early 2006 when Etsy was less than a year old. The correct determination would be “USV invests in seed stage marketplaces that have launched and are getting good traction.” A good way to solve this issue is to also crawl other websites, like Crunchbase, where you can triangulate to figure out when the initial investment was made.

It is also important to look at the data across time to see how the VC firm’s strategy is evolving. Starting in 2010, USV raised an Opportunity Fund and we will now occasionally make late stage/growth stage investments. We don’t do it very often, but we do it. Picking that up will be tricky unless you time sequence the data.

If such a tool existed, then an entrepreneur could point the tool at his/her website, generate some data about stage, geography, and sector, and then generate a list of VC firms that are good targets. The list could also generate a list of firms that have made competitive investments and should be avoided.

I honestly don’t think this would be that hard to build. And I think entrepreneurs who are going out to raise capital would find it incredibly valuable. There isn’t a huge market for such a product, but there is a market. The PWC Money Tree report says that 4,356 startup investments were made in 2014. So I imagine that somewhere between 5,000 and 10,000 entrepreneurs are going out to raise VC money on an annual basis right now. If we take the middle of that range (7,500) and assume that an entrepreneur would pay $100 for such a report (probably a lot more but I’m being conservative), then the total available annual market for a service like this would be $750,000 a year. If you could reach 20% of that market, then you have $150,000 a year of income. This is the perfect lifestyle business for someone. Hopefully they are reading this blog.

#VC & Technology

Comments (Archived):

  1. awaldstein

    Good idea.Repoints to the core truth that communications and marketing excellence are really rare even amongst the smartest, most successful and creative.It would be great to have a tool to find the right people. You would think that they would put the effort out to be found as well.

  2. LIAD

    interesting data points would include: – which partner made the investment – did they lead or follow – link to blog post if any explaining rationale behind investmentthefunded had the beginnings of this back in the day. angelist/mattermark would seem the natural home for this nowadays.I presume though some VC firms rather like having an opaque investment strategy. more serendipitous opportunities, judge each startup on it’s own merits, can build a better ‘rolodex’ even if no intention of investing in such startups.

    1. fredwilson

      great suggestions

    2. LE

      mattermark would seem the natural home for this nowadays.While the obvious home might appear to be mattermark it’s really not. Mattermark is selling at a $500 per month price point plus (and I love this type of thing) “enterprise” pricing. While I don’t know what the “enterprise” pricing is I can assume in part that the pricing may very well be adjusted to the particular company needing the data. [1]Further mattermark is charging $500 per month to a market who are probably going to be less likely to share that data with others. This is quite different from selling a $100 product that an entrepreneur would almost certainly share with a friend instead of paying $100 for their own copy.[1] Which means it can be BOGU time for companies with deep pockets. Maybe and possibly not sure how they actually operate.

      1. Danielle Morrill

        Great discussion here, just getting caught up and love to hear there is desire for so much of the automated portfolio data collection we do!Mattermark does offer a product for founders for just $999/year as long as your company is Series B stage or earlier. Just email support@mattermark to take advantage of it, this pricing will not be listed on the website.

        1. fredwilson

          why not make it public on the website? that way founders will know they can get access for a number they can afford.

          1. Danielle Morrill

            We have been working on a major feature specifically for them that will make this much more worthwhile, and then it can be marketed. This post is well timed.Echoing the sentiments of others, we have found that founders are extremely difficult and expensive customers to serve. They have little money, churn often (as startups fail), and everyone thinks they can build your product better, so we have tried to be selective and hand picked the initial set.

      2. Alec Wilson

        I’m really interested in how much of this can be done without paying for anything beyond the technology being used to collect the information (which could be as little as the price of hosting the web app and storing the data with some backups). How cheap could you produce the output VC investment strategies? Say you charged $30 (a number I chose at random). Would you have positive margins? How far off would the data be from Mattermark using only freely available sources?NOTE: I love Mattermark and am not suggesting it’s not a valuable product. I’m just curious about how cheaply you could produce a valuable product that is similar to Mattermark, but aimed at a lower cost market.

        1. LE

          The saying “price quality speed” pick any two applies here perhaps.Obviously Mattermark says they add value to the data and from what I know they combine many different sources, some of which almost certainly involve manual and labor intensive work, in a finished product. For example I or others might have some data that they would find interesting and might offer to sell to them and I can assure you that that data is not scrap-able. Because it took me (or others) manual time to compile it. But is this data of value? Or just the extra items on the food plate that allows you to say “this is a meal”.The question really is, beyond the marketing speak (not specific to Mattermark) how much of that extra manual work actually makes the product better vs. just makes you think it’s better. A large part of selling and marketing is often the latter.

          1. Alec Wilson

            Sure, agreed on all points. I’m simply curious as to the cheapest possible version of this. There are free data sources that can be accessed via API or scraped. How much value can be generated using only automated, free data? I’m not really even curious in a “maybe I’ll try it sense,” but in a purely intellectual way.

          2. richardbrevig

            Regarding using automated, free data: the real question is how exhaustive does the resource need to be.One way to think of this is Metcalfe’s law [1] when trying to answer that. It states: networks are valued by a square of their nodes, if you have 10,000 members in your network then the value of that network is 100,000,000 compared to a network of 10 members valued at 100.Possibly the opposite way to consider this would be with diminishing marginal utility [2]. That is, as another member is added to the network their individual value is perceived less. So, you have 10,000 members in your network, does the 10,001st really add that much more value?In this case, I’d argue that the 10,001st does add substantial value. That may be the investor that invests, or knowledge of a competing product that just raised $200M in funding. So the goal should be excessive exhaustiveness.Phrased another way: would you find value in a tool that provided you data yet you knew it left out 40% of what could be available? pulls data from crunchbase. So you can answer the question by looking at that. How much value do you see in it with only that data source? I think there’s much value if it were more exhaustive.Sorry for long reply. :)[1]…[2]

          3. ShanaC

            They are analyzing scraped data en mass. They aren’t getting secret data sources at all

  3. Sachin Patel

    Surely it makes more sense for VC’s to just write down what they invest in on their website! i.e. “USV invests in seed stage marketplaces that have launched and are getting good traction.”Added bonus: you’d get less entrepreneurs emailing you that aren’t the correct fit!

    1. fredwilson

      it’s not as easy as you might think for a whole host of reasons

      1. Matt Kruza

        Main reason that you don’t want to miss on any big hitters that may reach out? I assume? Really little upside for you to knock the best away.. just verify that is the reason

    2. Anand Sanwal

      Sachin,I think USV is a bit of an outlier in that they have a tightly defined thesis. If you look at most VC websites, they often are quite generic and don’t do a great job defining their areas of focus.And even when they do, their actual investments don’t always align well with what they said.At the end of the day, most VCs prefer to cast a wide net (publicly at least) as they’d like to see everything and then say no versus missing out on deals — optionality in a sense. And FOMO is strong in venture (“fear of missing out”) esp in today’s heady times.Thanks,Anand

  4. Rick Mason

    Fred,How do you identify the zombie firms with any accuracy? Seldom will they come out and admit it if asked and sometimes they are active judging pitch competitions etc.

    1. Mario Cantin

      Or to simply know how late a firm is into their fund would be good to know as well. But one can simply ask too 🙂

    2. Anand Sanwal

      It’s not too hard if you have the data.1. Look at when they raised their last fund2. See if their recent investments are new deals or just follow-on financing into existing companiesIf a fund hasn’t raised a new fund in 4-5 years and is just doing follow-on deals, it’s a decent indicator of Zombie status.We do this here –…Anand

  5. JimHirshfield

    I seem to recall Crunchbase shutting down access to their API to a company that was trying to do something related to this. They saw it as competitive. In any event, Crunchbase sh/could build what you envision.

    1. LE

      Well why in the world would crunchbase allow access to this data?They saw it as competitive.That’s why it’s business.I’m sure you are not going to give away info that you have collected on potential sales leads at no charge, right? Even to someone who is not selling the same product and service at least not in bulk. Maybe a lead here or 10 there or a suggestion.

      1. JimHirshfield

        Many databases are accessible via API, but only to the extent that it furthers the company’s business and doesn’t compete with it. Take LinkedIn’s API. If all you’re trying to do is suck out all of their data to build your own graph – forget it; they’ll shut you down. But if you’ve built an app that just shows 1st and 2nd degree connection names within your app – but requires you to go to LI to leverage those relationships, then likely cool by them.

        1. LE

          For sure. And I am not arguing against any and all API’s I am just saying it depends on whether a particular business can see some business justification as opposed to “just being perceived as being nice and doing right”. I read to many things where people just expect everyone to give away some secret or partially secret sauce because it appears that that is the free range grass fed way to be.

  6. Jordan Thaeler

    Yea but where’s the money in this?

    1. fredwilson

      depends on what you want out of like. $150k a year would be great for a single developer who has other things to do in their life and wants to draw an income on the side

  7. Mario Cantin

    Or maybe an entrepreneur / coder who has already had an exit could pay it forward and build it for free. Or it could be a hacketon project, open sourced, etc.

  8. Gregg Freishtat

    I think you touch on a very interesting point. Many entrepreneurs never learn the “business” of the VC’s they are seeking capital/partnerships from. This includes not only the investment thesis but also the workings of how VC funds operate, the stage of the fund, the average investment size, how the VC’s are compensated, and the relationship between the VC, their limited partners, and the portfolio.Drives me crazy when folks come to me for advice and have failed to do the basic homework on an industry that may be key to their success.

    1. fredwilson


  9. Franco Soldera

    Nice idea, but unfortunately it might be a perception problem to be solved first. I see exactly the same challenges that me and my business partner met at the beginning of our current project.The perception issues leads to a communication mismatch between the parties involved, like in recruiting: the resume doesn’t talk the recruiter’s language, and companies don’t advertise jobs in a way that can be understood by candidates.There are solutions, but i believe that no one of them is straight as the one you suggest to have a better match between entrepreneurs and VCs.

    1. Zubair

      Yes, I agree. Since VCs have the money they will always expect the entrepreneurs to do their homework, not the other way around as the VC is the one with the money. the same goes for jobs, the companies are the ones with the money so companies post sucky job adverts

  10. William Mougayar

    But Mattermark has a lot of that data already. You can slice by segments, stages, and even it connects your LinkedIn to show you if someone in your network knows the VC. [only thing it’s $500/mo, not $100, unless they decide to introduce a new price point product]I think finding the VCs is not as much the issue as developing the right relationship with them.

    1. awaldstein

      Thanks WilliamTwo counterpoints$500 a month is not priced for entrepreneurs doing fund raising if you have to sign a yearly contract. In fact, not sure who this pricing is appropriate for.Does anyone really use LI connections as a way to get a referral. This is really a legacy feature with little real use in my world.

      1. Matt Kruza

        Mattermark is doing like $5-8 mm arr i believe? I think there CEO Danielle Morrill has indicated as such. Went to college with their COO (Andy Sparks) and it appears they are killing it. Mainly VCs and angels are paying, but i think there next big pivot is going towards Fortune 1,000 that are trying to sell to these emerging companies. Impressive what they have done, but oviously not entrepreneur friendly due to the price. Sadly a “market failure there” as it would be hugely helpful to entrepreneurs.. but you go where the money is!!

        1. William Mougayar

          I’ve pinged Danielle, as I’m sure she’ll come and respond.

          1. Matt Kruza

            Yeah will be interesting her take on making a more entrepreneur friendly product. Don’t fault them at all, but I don’t think the money is in it to turn more focus / insight into the venture model. I think at one point they had a $99 product for entrepreneurs, but seems to have been unprofitable

          2. Drew Meyers

            They should charge $99, and require some deep data from entrepreneurs. Would be killer move if they figured out how to get money from entrepreneurs and investors both, and also charge to make the connection.

          3. Matt Kruza

            That is very interesting.. hope danielle or andy are reading 🙂

        2. awaldstein

          I’m a fan.Not a failure in my my book, simply not their market it appears.I don’t honestly see this a as a huge market though as currently targeted regardless of value of the data.Leveraging the same data cross markets is not as obvious nor as successful a the logic of the extension usually appears though.

        3. LE

          The high price is good actually and provides those who use it with exclusivity. That’s a selling point.

          1. Matt Kruza

            Agreed. Just not entrepreneur friendly like the service fred was talking about. Its great for them, which is absolutely fine. Just meant they won’t (likely) do what Fred was talking about because “there is little or no money in it”

          2. LE

            They could also offer the service for free (not their entire service but this service and maybe a few other gimmies) in order to establish an early database of info on entrepreneurs that they could then package as part of their service to those paying the full load.For example let’s say a VC wants to contact a particular entrepreneur that they’ve heard has a hot idea. So they tap the MM database and viola all the contact details are there because the entrepreneur gave that up in exchange for free usage of the MM data. (Perhaps MM would have to make a bigger free offering in order to collect enough critical mass of names obviously..) Just a concept, not a fleshed out idea.

        4. John Rhoads

          Agreed. Corp dev and markets seem much more appealing for the returns necessary.Also if you are series b and need to pay for intros… rethink your capital providers.Why build a company to have customers who are going to be out of business in a year anyway?

          1. Matt Kruza

            Oh definitely agree. yeah the biggest service in the spirit of what fred is talking about is almost assuredly for Series A or large “seed” round with institutional investors

      2. William Mougayar

        correct, the current price point is not oriented to entrepreneurs, but rather to investors. (i’ve already pointed that out)The LI integration just gives you visibility as to who in your network might know someone you want to target. Then you can use that path to get connected. That works if the fit is there of course.

        1. awaldstein

          Linked In connection data in my experience is little but useless. Not a network where accuracy of connection data matters to the user much at all.

          1. JimHirshfield

            Agreed on accuracy of connections. But I use LI a lot to find possible connections of my connections. I then use regular email to ask my connection if they know the other connection well enough for an intro. If so, then best go-forward is an email intro (outside of LI). I suspect a lot of other biz dev and sales people do this.

          2. Mario Cantin

            Thanks William, I’ve already signed up. It’s a really well executed service…and you come up in many of my searches as the connection bridge, ha ha!

          3. William Mougayar

            they mine the Gmail interactions behind the scenes to establish these linkages.

          4. JimHirshfield

            Whoa! Brilliant. It’s like an automated LI. Surprised this hasn’t been done before…so obvious, but so powerful.

          5. pointsnfigures

            for corporations, is pretty good

          6. William Mougayar

            Couldn’t try it. No fremium.

          7. ShanaC

            That’s just cool

          8. LE

            I then use regular email to ask my connection if they know the other connection well enough for an intro.How often do you find that to be the case that they know them well enough to do any good for you? Just judging by the hundreds of linkedin requests that I have that just troll for connections I’d be curious what value of that is?I almost think that if you setup a test whereby you simply said (to anyone with a high number of connections) something like “I also know Brad Smith of Google” you’d do equally as well without the effort. Or just put that in the “subject” line “ref by Brad Smith of XYZ”.

          9. JimHirshfield

            I’ve been on the receiving end of emails that begin with, “I see we have a lot of contacts in common within the industry…how about a call next week {selling me something I don’t need}. This doesn’t usually work on me.As for how frequently a connection of mine knows someone well enough to intro me, I’d guess it’s about 75% or greater hit rate. So, definitely worth continuing that practice, for me.

          10. LE

            {selling me something I don’t need}Back when people used to show up to do cold calls the way around this was simply to have a pretty girl or guy present the message. Not that I ever took meetings as a result of that or anything.

          11. JimHirshfield

            Hahaha…yeah, right.

          12. LE

            You get more meetings with “guns” and a good product than a good product alone. [1]Admit it, that’s humor up to your level of quality.[1]

          13. JimHirshfield


          14. ShanaC

            What have you found has worked

          15. JimHirshfield

            Warm intros and/or sincerity.

          16. Matt Zagaja

            The only use I have for LinkedIn is to see who is stalking me on LinkedIn. Weirdly twitter and Facebook (and even Disqus) are much better professional networks.

          17. JimHirshfield

            OK, Imma check out your LI profile now. 😉

          18. Drew Meyers

            “I then use regular email to ask my connection if they know the other connection well enough for an intro.”I do that too. Yet I find the answer to this is No 60-70% of the time. Which makes LI useless for this use case. There is a startup I’ve been beta testing that is addressing this problem, but they are pre-launch and have a long way to go to get critical mass of data of course.

          19. JimHirshfield

            I’m curious to hear what that startup is.

          20. Alec Wilson

            Yea, LinkedIn has a lot of noise if you don’t curate your connections well, but in my experience, it’s really useful in that you can usually find interesting leads to a warm introduction, at least.

          21. JimHirshfield


          22. William Mougayar

            True that the strength of the connections are hit and miss on LI.Have you tried Conspire? it gives you the path of connections and their strength.

          23. awaldstein

            Nope but will.Thnx

    2. Matt Kruza

      Agreed william. they definitely have this, but $6,000 a year is too big a barrier to entry for non-investors.

    3. fredwilson

      how would i know if its stuck behind a paywall?

  11. Jeff Judge

    This would be a great offering from Mattermark. I emailed them a few weeks ago suggesting they offer a lower price point for newbie entrepreneurs doing research – it’d be really helpful given their data set.

    1. fredwilson

      i think they need to be freemium.

    2. MFishbein

      did you want research on startups/competitors or investors?

  12. feargallkenny

    This is really a mashup of luma partners’ Digital Capital lumascape (… crunchbase and industry categorizations such as those offered by Luma or Chief Martec at least in the b2b marketing and ecommerce ecosystem. I had a mashup around jobs in the marketing tech ecosystem built at (this is a combo of crunchbase, luma and indeed data) but the same site could be relatively easily rejigged to do this also.

  13. Jon Michael Miles

    I’d pay for access to an effective Investment Dashboard. In the film and television business there are services that are similar to this. Who’s doing what deal where. The trick is each buyer is thinking in bespoke terms, each transaction being unique. Still approaching this from an algorithmic perspective is interesting particularly if it gets at behavior that people are not aware they are doing. This 6min World Economic Forum video hints at that type of analysis - – get’s relevant to this point around 1:40

  14. Guy Gamzu

    My experience is that founders will try out anyway – even if you had the perfect ‘insight engine’ and it would imply a high probability of ‘no fit’:1/ ReputationBrand and personal reputation drive interest and deal flow. If a founder is looking for a great partner – it’s natural to try and approach anyway2/ OptimismAn important trait of tech founders is optimism (and often over optimism). The more disruptive the idea – the more consciously ‘delusional’ and optimistic you are. So even if you had a firm scope out there – many would be inclined to think that they are the exception to the rule. 3/ Frustration This isn’t going away. A a tech entrepreneur – ups and downs are part of your routine. In fact, In cases where there’s a theoretical fit, rejection may increase the level of disappointment.Frustration often happens due to anticipation. The later is often the result of manner rather than substance. I am sure that people are disappointed when they get a no. But real frustration is often because the VC is not being responsive, not saying yes or no, cancel meetings, or ask for more info without apparent reason. 4/ FeedbackTrue. The motivation of approaching investors is to get the cash. But most founders realize this is a process. Many also like to get feedback from VC’s who gets to see a lot of ventures and have a different perspective. The pitch, the plan and sometimes even the drive is dynamically changing as you talk to more people.

  15. Dan Kantor

    I came here to write that one thing VCs can do is add microdata to their investment pages to help with scraping. I just checked USV and saw you guys already did that! One suggestion I would make is to make it a little more generic than ‘usv:’ so that a standard could start to be developed.<div class=”col-sm-4 col-xs-6 company-container current” usv-investment=”Etsy” usv:investment_series=”Seed” usv:investment_series_slug=”seed” usv:city_slug=”new-york” usv:city=”New York” usv:investment_date_slug=”2007″ usv:investment_date=”2007″ usv:investment_categories_slug=”creator-platformsmarketplaces” usv:investment_categories=”Creator Platforms,Marketplaces”>

    1. Mark Essel

      The investment thesis protocol… 😀

    2. Alec Wilson

      Microdata is something nearly every website in the world could do to that would help out web crawlers (related: Google has a somewhat well-known web crawler, and while it’s good enough that it doesn’t necessarily need structured data to correctly crawl and index a page, doesn’t it make sense to make it as easy as possible for it?)

    3. fredwilson

      awesome request Dan. we will add it to our feature roadmap. we just had hackday yesterday so it may be another month before we can get to it

    4. Nick Grossman

      yeah good idea. there was also an open data standard provided somewhere — don’t have the link handythe data that’s in there now is for our own JS app to do filtering, but clearly could be used in a more general way

  16. Rohan

    Fred, I had a question around this. We spoke with Andy Rachleff of Benchmark the other day and his view was that having a thesis as a VC wasn’t a winning strategy. His thesis was that no one can really predict the future and his belief was that, out of the top 2% of VC firms that produce 95% of the industry’s returns, it is exceptions that have found success following a thesis.To him, it all came down to the network and finding and supporting great entrepreneurs.Would love to understand how you think about this.

    1. pointsnfigures

      I find that LPs in funds want a thesis though

      1. kenberger

        depends on the LP, depends on the fund.Witness the rise in sidecar funds and SPV’s. Some (many?) investors, some brand new, some seasoned, seem to now be lining up for the chance to just grab some Pinterest et al shares, even with the caveat that they can’t ask many questions.

    2. Alec Wilson

      So would you say his thesis is to simply identify the best entrepreneurs and fund whatever it is they are working on? That’s basically the YC model, right? At the same time, don’t you need some amount of knowledge about industries to even identify the best entrepreneurs? I imagine the best restaraunters and the best software founders have some very different characteristics, although I might be wrong.

      1. LE

        YC doesn’t fund the best entrepreneurs. YC funds the best entrepreneurs that know about and apply to YC. And from that subset they then pick what they think is “the best” but also invest for other reasons as well.This is quite different then, say, industries where they might actively seek out talent (entertainment and sports come to mind).

        1. Alec Wilson

          OK, sure. To me, it’s implied that when making statements about who someone funds, the fact that it’s limited to those they are exposed to is implied, and for the purposes of VC, my point is still unchanged.Your comment on it varying by industries seems directly related to my observation that even when saying you don’t have a thesis and just try to fund the best talent, you still need some domain expertise to identify them (may not be much, but some). Sports and entertainment are a great example. Good luck picking this year’s Rookie of the Year without knowing the difference between a pitcher and shortstop.

      2. Rohan

        I think that is right. Not sure it is the same as YC… especially because they’re not funding entrepreneurs at the same stage. 🙂

    3. fredwilson

      different strokes for different folks. we have a very focused thesis and we do very well with it. there is more than one way to make money.

      1. Rohan

        Ah. That’s what I thought you’d say. But, was curious nevertheless.Thank you for taking the time.

  17. gline

    Seems like the general version of this problem is “helping investment managers find appropriate capital” or “helping capital find appropriate investment managers.” Fred, how does USV figure out which institutional investors might be appropriate for participation in your funds? How do you spot that the UPenn endowment office has taken an interest in funds with Bitcoin / Blockchain exposure? How do you broadcast your interest in those areas so that interested managers stand a chance of finding you? How much would you pay for access to this sort of information?The public equity markets have effectively funded many successful technology businesses that address these needs – Bloomberg, CapitalIQ, many Thomson Reuters products, etc. Crunchbase is the clear competitor in the VC/startup landscape (and AngelList at the seed stage in some cases, though they aren’t necessarily positioning themselves as a data business), but a) Private Equity certainly still seems underserved, and b) even Crunchbase focuses mostly on the boundary between VC funds and your investments – what about the boundary between VC funds and your investors?

  18. Tom Labus

    Everything would have to be real time and probably still be misleading. Things come out of left field too much. You should have a left field partnerHappy Easter everyone. Beautiful day here

    1. Jon Michael Miles

      If an algorithmic approach was taken, it would be predictive, pointing out patterns that the firms wouldn’t necessarily know they were a part of.

  19. Sebastian Wain

    I can do a free open source prototype of this idea.If someone in the AVC community is interested to provide valuable feedback as a user please let me know.I have played before with VC information in articles such as Venture Capital Blogs Ordered by Google Page Rank part of Enriching a List of URLs with Google Page Rank (2012), and in Automated Discovery of Blog Feeds and Twitter, Facebook, LinkedIn Accounts Connected to Business Website.

    1. Mario Cantin

      Thank you!

    2. Marissa_NYx

      Sure, i ‘d be happy to be one of your users/ beta testers . Please let me know when you’re ready. Shout out on Linked In or on this blog.I think the key issue is that most entrepreneurs are seeking relationships not just $$. You’re going to be joining my team and I’ll be joining yours. Do we see eye to eye . Do we get on . Can we support each other on the journey past the next milestone. Will you clear the path and let me & the team get on with the job. Will you be there when I need to lend an ear. Will you show me not just tell me . Will I treat your $$ with respect & be prudent . Would your trust in my team & our plans deliver far beyond your expectations. And would you be the first person who I call to discuss an issue , get an opinion.Yes, the first step is to help create a short list of those investors & entrepreneurs in the relevant sector and suggest matches & open source is a great way to do that . But the highest & best is to connect us , make intros and support the development of the relationship. Doing this may not readily be scaleable but that is where IMO the greatest value lies .

  20. MFishbein

    I actually tried this. I sold about 15 at a $100 price point, then tried a larger scale sales campaign but came up short on my desired conversion rate. So I ultimately decided to discontinue it but I learned a lot along the way:I started by conducting about 15 customer development interviews with entrepreneurs to see if there are any pain points associated with fundraising/researching investors, and if so what they are. I learned that entrepreneurs typically spend about 20-30 hours researching and qualifying investors, and figuring out who they should be talking to. Some were paying a lower level employee to do it. They expressed concern over spending so much time/money on something not directly building product and getting customers.In addition, despite all this research, many entrepreneurs still didn’t know about many relevant investors. This was concerning to entrepreneurs because they had the desire to cast a wide, but relevant net, knowing that most conversations wouldn’t go anywhere. So the idea of having more relevant leads, with less time spent, was very appealing.The feedback from the customer development interviews gave me enough conviction to proceed.After optimizing the offering based on what I learned in the interviews, I followed up with the interviewees who expressed deep pain associated with this research. A few of them purchased. I also got a few referrals from friends that lead to sales.I started it as a service (“concierge mvp”). I would customize the reports based on the entrepreneur’s company/funding needs (stage, geography, industry, etc). I scraped the investor data from Crunchbase and Angellist.I took the reports one step further. I included the names of every employee at the given VC firm along with links to their LinkedIn and Angellist profiles so the entrepreneur could quickly see how they might be able to get introduced.I productized a couple of those reports, and acquired a few more customers by answering a couple questions on Quora and putting up a couple YouTube videos with links back to the site.My roadmap was to have a searchable database, where entrepreneurs could enter their criteria and return back a list of potential investors.Given sales and qualitative feedback was going well, I decided to do a larger scale sales campaign. I scraped Angellist for entrepreneurs raising a seed round, used a couple tools to find their email addresses, and then sent out about 150 cold emails.This led to only about 3 or 4 sales, which was below my “success criteria.”The cold emailing did lead to several more phone conversations. There I learned that entrepreneurs were not necessarily concerned with reaching more investors — they believed that if they didn’t have a strong 2nd connection they probably weren’t going to invest. So their time was better spent mining/researching through their existing contacts. And while many entrepreneurs were doing this research, they had already competed it by the time I was reaching them. In addition, many entrepreneurs who are fundraising inherently don’t have much of a budget.I probably could have done a better job prospecting prior to the sales campaign, so that I would reach more relevant entrepreneurs, or sent more follow up emails. I also could have tried more content marketing given that Quora and YouTube led to some sales. But ultimately I decided the economics of the business were not strong enough, given the above factors and given the time it was taking, so I decided to stick with a different business instead.

    1. Mark Essel

      Great experience share and on target, thanks. It sounds like you were on the right track but couldn’t make it over the market hump (where it feels like a fit due to sales costs vs revenue).

      1. MFishbein


    2. fredwilson

      there are two things that i would suggest if you want to continue working on this1) crawl the VC’s websites. the data you really need to qualify VC firms is there, on the portfolio pages, not in crunchbase or angellist2) entrepreneurs are wrong about not needing to cast a wider net. what they should be doing is scouring the entire investor landscape, finding the 20-30 firms that are the best fit, then figuring out how to get a warm intro to them

      1. MFishbein

        Thank you Fred. Great points.

      2. LE

        entrepreneurs are wrong about not needing to cast a wider net. what they should be doing is scouring the entire investor landscape, finding the 20-30 firms that are the best fit, then figuring out how to get a warm intro to themPeople are lazy and want shortcuts. Sometimes that’s good sometimes it’s not.what they should be doing is scouring the entire investor landscape, finding the 20-30 firms that are the best fitImagine how impressive it would be if someone pitched you and actually was able to tell you that they decided to pitch a particular VC because they did this work vs. “I read online that you…”. Sounds exactly like the type of self starter behavior that someone needs to succeed.News flash: Being an entrepreneur is about figuring it out. There is no manual you can read that will give you the play by play and “the answer”. If you aren’t able to do this you probably should pick another profession or work for someone else. Or go to law or medical school where the path is clearly set and you just have to read, attend classes, study, take tests, get your first job and you are off.

        1. JamesHRH

          This is a wildly inefficient process. VCs have no flake filter and entrepreneurs have no dipstick who thinks he should run the business filter.

      3. Alec Wilson

        >> then figuring out how to get a warm intro to them.I recently went through a job search and decided that I would only apply for jobs at companies I could get a warm intro to. LinkedIn turned out to be a shockingly good resource for finding these warm introductions. Looking backwards, this isn’t surprising, but having never used LinkedIn as a job seeker, it was a pleasant surprise. There wasn’t a single company I wanted to talk to at which I wasn’t able to get a warm intro. It’s hard for me to imagine that, if the entrepreneur provided their LinkedIn profile, their AngelList profile, their Twitter profile, their Facebook profile, and the product then crawled Crunchbase, AngelList, and the VC websites, that they would not be able to find warm intros to at least some number of those 30 “best fit” firms, particularly when including 3rd degree connections.I really like this as both an interesting project and as a potential product. Great post, @fredwilson:disqus.

        1. J

          Unfortunately, the way LinkedIn and Facebook are locking down their APIs (and web content to crawlers), this is surprisingly not as easy as it sounds. I spent most of last year solving a similar problem.One way around it is that most of these sites allow one to export the address book / social graph – you could just import that, if the end user is motivated enough to do so. But second degree is annoyingly painful to get, and third degree is worse — I wouldn’t recommend trying to do this as a side project.The flipside is to put the work in the entrepreneur’s hands. Suggest some great fits and people in their network that *may* know folks at those companies, craft a great email to ask for potential introductions, and let the network work its magic. Half the time when you do have a second- or third-degree route to some company, it’s not someone you even remember meeting anyway, and contacting the strong influencers in your first-degree network will be much more successful.

      4. kenberger

        re VC websites being a rich source: as mentioned in another comment, I’d like to hear more since i’m not as convinced these days. Examples:Benchmark recently yanked ALL of their content http://www.benchmark.comSacca’s lowercase capital was awesome transparent and super fun for a while but the super successful, interesting model he pivoted to was all being done surreptitiously.IE: wins an award for “most transparent VC website”– can’t say this of most peers!

        1. markslater

          yes there are a bunch of top VCs that dont publish

        2. richardbrevig

          Could you expand more on They have an alexa of 300k yet no content that I can see past that first page (except for the twitter link).

          1. kenberger

            Sure– go and have some fun here (The Wayback Machine):…Click around most any date between 1996 and 2013 or so and you will see rich data ebbing and flowing for 1 of the most successful VC funds in history… and then it all disappearing recently. Add to this the slick new PR campaign (making the current partners look like cool/bad boys) and you’ll see how they’re trying a different tack.I don’t have an opinion yet as to whether it’s good or bad, but it also reminds me of some of the best hedge and PE funds (Renaissance Technologies comes to mind).

          2. richardbrevig

            Interesting. Thank you.

          3. ShanaC

            I have guesses…Probably relating to lp fundraising or deal flow…

      5. JamesHRH

        @MFishbein:disqus both you & Fred have wildly underpriced this concept. A decent startup entrepreneur that is outside the core VC markets would have $1000’s if you can pull 20 firms that fit the needed profile.Isn’t Mattermark doing this for later round VC firms, basically?A JD Power service where VCs are the product and entrepreneurs are surveyed for quality of the product performance would be huge value as well.

      6. Vivek

        I absolutely agree with the second point. Currently, the due diligence on the entrepreneurs’ part is very limited, it will be really great to access the entire investor landscape and short list firms.

    3. Anand Sanwal

      Great analysis of your process and findings. Startups are often cash poor and time rich and so spending 20, 40 or 80 hours doing something manually is easier to justify than spending $500 (or even $100).When we launched CB Insights six years ago (initially as ChubbyBrain), we thought startups would be our market, but we realized quickly that the market size, churn and price point made it a less attractive market.

      1. MFishbein

        Thanks Anand, and awesome what you’re doing with CB Insights.

      2. Vivek

        It is funny, CB Insights came to my mind while reading this post. I thought, there is a lot that CB Insights is doing in this direction and probably more comprehensively. May be you guys are already crawling for your research data 🙂

    4. Daniel Myers

      We have been building up our hit list this way. Its a mashup of crunchbase and a few other sources combined with linkedin to maximize sector/geography/stage AND ability to get a warm introduction.

    5. Alec Wilson

      Really interesting, thanks for sharing. Question: How expensive was it for you to run this business? Outside of marketing expenses? The reason I ask is that, if the service is cheap enough to run, could you reduce your prices and deliver a version of the product that is less time consuming to produce, throw up a web app, and only work on promoting it when you feel like it? It seems to me like $15 is a good price point for something that isn’t very customized and that you don’t spend any money on promoting. I could also see non-entrepreneurs using it out of curiosity at a low enough price.If I’m way off on how realistic this is, what are the expenses that prevent you from doing something like this?Thanks again for the post!

      1. MFishbein

        It was not super expensive, because I was doing most of the work myself, but at scale it would definitely require a lot of manual labor.Your idea of a low price point is very interesting.The problem with not spending time/money on promotion is that no one will find it.But maybe it’s worth producing a web app or making some standard reports and doing a bit of marketing. Might be a nice passive income business if I found the right marketing channels.

    6. ShanaC

      I actually think this would be more useful to vcs. Fred is doing this, not entrepreneurs. That explains a lot about what’s going on within your interviews

      1. MFishbein

        Good point about Fred doing it, not entrepreneurs. What problem do you think it would solve for VCs? Interest/curiosity? Fundraising for their portfolio companies?

  21. markslater

    i have several issues with this.First – the bottom half (seed ) has been atomized to the point where access to the most aligned $ is now almost programmatic anyway (think angelist).Second – Thesis based investing is one part of many VC’s strategies. If i recall you invested in Mark Pincus. Was that investment person first, thesis second – or did they come hand in hand? My point is – is that there are other more subjective and less quantifiable inputs to the investment equation outside of a crawl-able thesis – and this could skew results.Over the years i’ve made it my business to be a student of the venture market and all that it entails. Its helped save me a huge amount of theirs and my time. If you are an entrepreneur who has plans to raise venture – you should become an expert at it – If you are successful at raising – bank on spending the next 6-8 years talking to all of these folks. By just getting a “report”you’ll lose the value gained by reading their positioning blogs, studying investment history and overall being better positioned to have a productive conversation should you be presented the opportunity.

    1. MFishbein

      re Angelist – many investors are still not on Angelist. Angelist is dependent on the network effect. Raw data is not. (see my comment about how I tried the business Fred is talking about. Less than 2/3 of the investors I was tracking were on Angelist)

    2. awaldstein

      Agree.Need to say that the further you move from the mainstream tech and VC investments, out to invironmental, agtech and the rest, the more its just plain footwork and getting out there.Less public info. Less bloggers. More just working the room and going from referrals to referrals.Raising a mid sized see round with an investment now and I”m doing it person by person.

      1. markslater

        lets also not forget the gorilla in the room.If you are on to a unicorn – they’ll come to you 🙂

  22. mickwe

    Maybe it would work better as a crowdsourced service, with controls and editorial oversight. Did you see what happened with Eden Shohat’s spreadsheet of Israeli angels?

  23. Matt A. Myers

    It sounds like you’re wanting to work towards automating the investment flow. If that’s the case and 100% of VCs will have the exact same access to you, what do you expect will be the main differentiating factors?

  24. Elia Freedman

    I sure wish we wouldn’t call non-VC fundable opportunities lifestyle businesses. It sounds like the person working on that business spends his days on a beach somewhere in the sun and collects the checks that come in. Just because it makes less money than a VC invested business doesn’t mean it isn’t still a business that takes lots of work.We don’t have a good term for these types of businesses yet. Independent or indie is the best I’ve heard so far. Maybe, Fred, a post here and this community can come up with a great name we can all use?

    1. JimHirshfield

      Self-funded venture?

      1. LE

        The term that was used back in the day was simply “starting a business”. Because the overwhelming number of businesses that are started in this country are not done with investor money. This is based on observation over time, not any statistic supplied by business school professors, people writing blogs, newspaper or magazine articles.

    2. Mario Cantin

      “bootstrapped” works for me

    3. Richard

      Bankable Businesses

    4. LE

      Just because it makes less money than a VC invested business doesnBut the fact is it can very likely make more money for the entrepreneur than it can for someone who is a founder of a VC or angel funded business working hard for many years with the hope of hitting the pay window in one way or another.

      1. Elia Freedman

        Absolutely. There are plenty of bootstrapped businesses that are far bigger than VC businesses. too. I meant the example Fred referenced specifically.

    5. Alec Wilson

      Isn’t a lifestyle business essentially defined as a business that has a product and a market for that product, but isn’t looking for a VC-style exit (either due to market size limit or disinterest by the owners?) Basically, the end goal of the business is to earn enough money to support the lifestyle of the owners? Maybe it’s just because I’ve worked at both lifestyle and VC-backed companies, but I don’t get the same connotation you do from the term.

    6. fredwilson

      great fucking idea. tomorrow’s blog post. maybe we can do freemium again!

      1. kenberger

        yes, great idea a la Freemium.fwiw btw, every time i hear the term, i think of our good friend Anthony Volodkin cc: (these days, some folks say it of me too)

    7. Anand Sanwal

      I like revenue-funded. Our company is growing to 50 people this year without VC backing. We are going to build a big business. Funding strategy doesn’t determine that.

  25. JimHirshfield

    As some have mentioned here ( @willykaram:disqus and @sebastianwain:disqus ) I think this should be an open source project backed by the VC community. Because…1/ It’s too small of a market for it to be even a life-style biz, IMHO2/ Pay-to-play (as in, pay to access the money sources) just always feels wrong3/ VCs are generally encouraging lowering the barriers to entrepreneurship4/ The data is not standardized; every VC has a different vernacular to describe their thesis, but this could change that5/ The best source for the data are the VCs themselves; have them contribute6/ Participation by VCs is self-selection of most open and cooperative VCs; good signal7/ It would take a relatively small amount of funding from each member VC to fund this in a big way8/ Member VCs could include an embed on their sites that entrepreneurs could use to see if they fit the firm’s thesis, stage, investment size…a pre-qualification tool.9/ fin

    1. Mario Cantin

      Yeah, but who’s gonna lead the charge? Not every VC is a Brad Feld with a #givefirst mentality

      1. JimHirshfield

        Well, one could read Fred’s post above as “leading the charge”. I would ask Fred to put his money where his mouth is. If he wants to see the above materialized – and he does ask for it above – then I wouldn’t be surprised if he agreed to back it – either as an individual or as a USV initiative (not a portfolio investment).With Fred’s or USV’s backing it would gain attention and participation from many other VCs.

        1. LE

          Fred may very well do that but he is not going to say he is going to do that. He would want someone to read the post and have enough initiative to actually make an effort to propose what you are suggesting.My idea similar to what you are suggesting was essentially to give the data away for free and be sponsored by a firm or firms in exchange for “promotional” consideration. More or less in the image of PBS (as opposed to “ads” which have to be sold).

    2. Anand Sanwal

      Jim,You hit it on the head. This is not a big market.I’m not sure a data cooperative model works as you’ve suggested because cleaning data is required and if you don’t do that, you’re left with garbage in, garbage out.Plus, I’m not sure most VCs share Fred’s desire to be this transparent. The “enlightened self-interest” in this cooperative model is missing for them I believe and altruism as a motivator won’t work over the long-term.Thanks. BTW, for institutional customers, we’ve solved all the problems Fred mentions at CB Insights.

      1. JimHirshfield

        True. I think many VCs still play the “mystery” and “I’m hard to reach” games.

    3. fredwilson

      VCs can help by putting standard metadata on their websites. we do that as Dan Kantor mentioned in a previous comment. but i don’t see this as an open source project because someone needs to maintain the software and provision it as a service

      1. JimHirshfield

        Seems like Willy Karam is interested in running it / maintaining it.

  26. pointsnfigures

    One other trick is that sometimes VC strategies might change. They might “pivot” given a change in the market.

    1. JimHirshfield

      Yes. Many are opportunistic. A hot startup with traction that’s outside your stated thesis…tell me you’re just gonna walk away if given the opportunity to participate.

    2. LE

      Yeah this concept runs into the same problem that people have when trying to keep on top of any information and provide a directory. It takes time and effort to keep on top of the data so it is fresh and relevant. In this case you don’t even have access to all the data, only what you see that appears on the site.Many VC’s don’t even post their investments until the entrepreneur says it’s ok to do so. So in that case both crunchbase and the VC website might be long out of date.

    3. Anand Sanwal

      Data visualization on top of good, comprehensive data can make these changes pretty clear. As an example, here is an analysis we did of Sequoia Capital and this highlights their change in focus using a heatmap which shows investment by industry over time.…We’ve solved this problem at CB Insights. The challenge which we’ve not solved is making it available to startups as the market is not large enough.

      1. fredwilson

        that is sweeeeeet.that kind of insight is really useful

      2. ShanaC

        Selling to startups often seems like a bad idea

    4. fredwilson

      that’s why you need to look at the data over time

  27. efader

    While not as automated as you layout, Mattermark has the data to do this already

  28. Matt Zagaja

    I think the problem with this kind of thing is that an investment thesis or strategy can qualitatively encompass a lot of factors that are not easily broken down into constituent parts. If you really do only seed stage investments in a certain amount, that part might be easy, but what qualifies as a network? If you made a one-time exception was it really a one-time exception? What if you have in your back pocket a one-time exception card and end up missing on being pitched a really good company because this tool told them not to pitch you?The job market faces a similar issue (as someone who has been job hunting I know this all too well). People post all sorts of job descriptions and some of them are crazy, to the point they’ve been parodied. One job application I worked on recently asked if I had X years experience in something, and that’s a really ambiguous question. Does it mean I did work in that area every single day? Does it mean I’ve known about the area and studied and worked in it intermittently over those years? What if I did it once a week or once a month?Finally the transaction costs of discovering whether you fit the criteria by sending a note are rather low compared to the transaction costs of doing the research. If I know someone at a company I will get in touch with them to find out the “real scoop” on their application process and ask for a referral if appropriate. There is no shame in getting walked to first base because it’s still up to you to make it to home. However if I apply to say Netflix where I don’t know anyone, I just send them my resume because I have no idea what they’re thinking at all and either I play or I don’t.On a final note I think that people are afraid of missing their “unknown unknowns” when they cast the net for their applicant pool. Making information transparent is really not a difficult problem to solve. If you want entrepreneurs to meet certain criteria all you have to do is put these criteria into a rails application, send them an e-mail auto-response to go there and answer the appropriate filtering questions, and only review the ones that make it to the end of that, or have an initial screener that looks at what they send. If people really wanted to make sure job applicants met their criteria they would define their requirements in terms of specific skills instead of years of experience and also provide an idea of what kind of experiences those they are looking for would have. They would also provide a window into what the applicant pool looks like both in terms of number of people applying, and how those applicants fit into the skill requirements.

    1. Alec Wilson

      You’re right, there will always be exceptions to something like this. However, reading many of the comments, both here and on HN, it seems like entrepreneurs are already doing this manually. Simply reducing the time they spend doing that is a pretty strong value add, and since they are already doing it manually, they are already dealing with the fact that there will always be exceptions that you can’t predict.

  29. Anand Sanwal

    Fred – We already do this at CB Insights.Remember, our teardown of Union Square Ventures? :)…All of the data visualizations in that post were from our product and a tool called Investor Analytics –…Investor Analytics lets you see heatmaps of what is an investor’s thesis/areas of focus including industry, stage and geography. It is perfect for understanding this in a visual way.And then to help navigate to a firm, we have tools like our investor syndicate dashboard which shows which firms/angels a particular investor tends to syndicate with.We also launched Board of Directors Search so you can identify the specific investment professionals you should speak to based on your areas of focus.…Re: the target market. We’ve long wished we could find a way to offer this data to entrepreneurs as we see them wasting inordinate amounts of time doing what you detail. The problem is that the the market is (1) not large, (2) doesn’t have money and (3) churns out quickly. And so our customer base is institutional ($30k+ price point per year).Maybe one day, we’ll find a way to do that. But the data part of what you detail is a solved problem.Thanks,Anand

    1. fredwilson

      yeah. i see this as something a single developer could build and maintain as a lifestyle business. your teardown was great but it needs updating every quarter to be really valuable and you need to do it for a couple thousand firms.

      1. Anand Sanwal

        Fred – the dataviz underlying the teardown are updated real time on CB Insights for at last count nearly 30k investors and acquirers (VC, PE, Angels).Happy to show you or someone on the team. We’ve solved this problem.Of course, we are also far from a lifestyle biz 🙂

    2. richardbrevig

      Sorry, but don’t you already provide this? says “Our algorithm analyzes the funding history of venture capitalists, angel investors, financial institutions and grant providers to find those that best fit your business. We make identifying and researching funding sources effortless. And it’s 100% free!”It may not be exactly what Fred requested (tool that automates analyzing VC websites) but it does seem pretty close if not exact. Does it work or is this just a marketing test page? What’s the independent variable for the decision tree algorithm? An industry classifier or keywords scrapped from the VC site?

  30. LE

    So I imagine that somewhere between 5,000 and 10,000 entrepreneurs are going out to raise VC money on an annual basis right now. If we take the middle of that range (7,500) and assume that an entrepreneur would pay $100 for such a reportAnother way to offer this data is to make deals with colleges and universities to give them access for their students. In that case all you really need to do is establish yourself as follows:a) Put effort into signing a name university, even if you have to give the data away for free, (but you might not have to since they have pockets of money if you sell it right).b) Use the fact that “name university” is on board to get your second “name university”.c) Repeat “b” a few times and then go on to actually sell the product for big bucks to the Universities for their entrepreneurship students usage.As anyone who has ever cold called knows, once you have name accounts on board it is much easier to get others to jump in. This strategy covers a wide range of business cases (and I have actually used it in many different situations).

  31. Greg Cohn

    FWIW @VCDelta is a bot that tracks additions to VC portfolio pages and has been for a while. Not a lot of metadata but maybe useful as a timestamp.

  32. Gudjon Mar Gudjonsson

    Another service I would like to see is on who are the main investors in each of these VC funds.For example, I’m quite curious on who are backing the leading VCs in the US.Pension funds or corporate entities? If corporate, media companies or telcos? Or high net worth family offices? If so, how did they make their money. What’s their interest. What would they like to see from the VC, etc.This has often been foggy for me as an entrepreneur. Perhaps it should.But, this could help entrepreneurs understand some VCs a bit better.Also, a metrics on how far they are into investing. For entrepreneurs to stay away from the short-term danger zone.

    1. fredwilson

      i am not sure the LPs would allow that.

      1. Gudjon Mar Gudjonsson

        Yes, I figured. It probably just makes things more complicated for everyone. I’m just so curious! 😉

        1. John Revay

          Curious as to why you think you need to look through to the LPsFor the hot funds – assume Yale, Harvard

  33. Semil Shah

    I don’t want to say “it can’t be done,” but it’s increasingly difficult to track these signals, for a host of valid and silly reasons. The market has shifted so much it’s hard to know how to label a round (e.g. Series A-1 rounds?); it’s hard to know in a round how much one fund invested in versus another (the press never asks, either); firms often don’t keep their websites fresh out of laziness or forgetfulness, and they haven’t kept up with AngelList despite the reputational benefits it would confer. I could go on and on. Add to this the increasing preference among many (this is relatively new) to keep investments private for a while, or perhaps longer, and it becomes hard to get a snapshot that’s relevant given how fast the winds are changing year by year. [Incidentally, this is what the best angel and seed investors do, they have this mapped out in their heads and through relationships, and they help guide the teams to the right sources based on previous experience, taste, and fit.]

    1. LE

      firms often don’t keep their websites fresh out of laziness or forgetfulnessThere are also valid business reasons for not offering up this information and being fully transparent.

      1. Semil Shah

        Yes, mentioned that later in the comment. Many more firms also want to keep their moves private (or not entirely public).

        1. pointsnfigures

          yup, recall Fred’s post over a year ago on ankle biters? One reason to keep financings and companies secret is that very reason

        2. LE

          I think people also forget that even though they appear to be awash in money (and they may very well be) VC firms are essentially at the core small businesses. What this means is they don’t and can’t allocate resources and labor the way a large corporation might.

          1. Semil Shah

            Disagree. These changes are very simple to either make or to ask for to be made. It’s just not essential to what they do, and as other commenters have stated, may not be strategic to reveal.

          2. LE

            You are talking about implementing this one idea and I was talking about a concept which involves small businesses (which I have a shitload of actual experience with..both operating and selling to.) Time is short when you are running a small business. Time is a resource just like other things that need to be allocated. You have nowhere near enough time to implement all of the ideas that you might think are needed it’s more of a triage and almost in some cases squeaky wheel type of thing.

          3. Semil Shah

            I was only referring to updating a website with a recent investment. It can take just a few seconds to do 😉 Now, whether there is an incentive to do it — that’s another question.

    2. Alec Wilson

      What you are saying is that this is increasingly hard to do in a manner that guarantees comprehensiveness and accuracy. To me, this product is actually selling something a bit different than this. While it’s important to be as comprehensive and accurate as possible, what @fredwilson:disqus is actually suggesting is automating what many entrepreneurs are doing manually. As long as the product successfully automates the research that would be available to entrepreneurs raising money, what’s being sold is time savings, as inaccurate or outdated data due to VC laziness (or whatever motivation they have for not updating their websites or AngelList profiles) isn’t actually a problem, as the entrepreneur would run into in the absence of this product anyway, right?

      1. Semil Shah

        It can be done from a technical web crawling perspective; my POV is that the inputs themselves won’t be crawlable in a fashion that leads to any real signal beyond talking to people the old fashioned way.

  34. Roy Bahat

    @fredwilson:disqus One other solution is we could all be better about being explicit about where we invest and why. We tried this in publishing our full previously-internal investment operating manual. Immediately, inbounds went *down* and quality of matches went up. We still get the odd miss, and in most cases, we can ask founders, politely, to RT(F)M. We recommend it for others, and open sourced ours to make it easier for others to do… it’s been forked a bunch of times already, we’d love to see others disclose more of their strategies. software development, Don’t Repeat Yourself is a simple, central idea — in venture, we should try the same as often as we can I think.

    1. fredwilson

      keeping that up to date is really hard Roy. i’ve learned that the hard way. better to let your investments talk for you i think

  35. Guest

    Why no use the crunchbase API ?

  36. Bernard Desarnauts

    Software will eat VCs eventually then. Big data + programmatic market-place will drive efficiency for all.

  37. Nicholas Marx

    Sounds like something Angel list or Mattermark should build…When you say “this is not a fit for USV” does that mean a) you don’t think you can help the founder/team in their quest or b) you don’t think it will pan out fir whatever reason?Because isn’t it about making returns for your LP’s at the end of the day regardless of an investment strategy or thesis? Isn’t the thesis ‘to make money’?

  38. bfeld

    I’m an investor in Mattermark. I just read through the comments and found them incredibly helpful as we work through our entrepreneur offering. I saw that @daniellemorrill:disqus commented about a $999 / year package. We are working on other stuff at this, and lower price points, for entrepreneurs, that include much more tangible value than $999 (or whatever price we end up charging) – so you get the data product + a bunch of stuff that you can use to build your business.Think of this as a “founder bundle.” If you are a pre-Series B founder, what would you want in this bundle to go alongside of the data? While we’ve got a long list, I’m always open to understanding / hearing more.

    1. LE

      While we’ve got a long list, I’m always open to understanding / hearing more.Interesting that you are able and want to get involved at this level with the companies that you invest in.

      1. bfeld

        It’s how I’ve always worked. I love to engage with the product directly.

    2. fredwilson

      well to start, a listing on the product page so you know the offering exists. telling people it exists but you have to email to get it means it is only available to those in the know which is total and complete bullshit and classic silicon valley insiderism

      1. bfeld

        Do you have an opinion on that … ?We haven’t officially released it as a product. We’ve started experimenting in a limited way and are getting feedback on how best to configure it / release it, including changing some of the UI / UX elements. If 10,000 people signed up for it tomorrow we’d likely disappoint enough of them, so we chose to do it on a very limited release basis as we got our arms around what we could give entrepreneurs – in addition to a subscription – that would make the subscription effectively free since their direct value would be > than the $999 (or whatever) we end up charging a year.We’ve promoted this a few times via Twitter and got more people than we wanted so putting up even a “here’s the option – sign up to be on the list” approach felt pre-mature.I was part of the decision, so I guess I just got painted by you with the “total and complete bullshit and classic silicon valley insiderism” which will cause me to ponder this approach more.

        1. fredwilson

          put it out there publicly with a disclaimer that its in beta and not quite perfected and therefore free for now but eventually will cost $100 a year for pre-Srs B entrepreneurs.

          1. bfeld

            It’s in alpha. We started experimenting with it 30 days ago to see if it even was a product we wanted to release. We don’t have the full entrepreneur package yet. We have a backlog of 731 things that sort higher than changing the pricing page for this. So, we’ll get to it – likely in Q2. But leading with it didn’t make sense vs. just experimenting with it, although this thread will likely result in us prioritizing it higher.

      2. Danielle Morrill

        It’s not launched yet. We have been developing the program in a pilot, I just thought it would be good to open that up to readers over here.

  39. kenberger

    Love the idea: certainly attractive to someone like myself as its a perfect intersection of startup advising plus internet development (that’s totally me). And it’s a good example of “selling picks and shovels to the gold miners”, rather than any actually mining. Still tough having a target market be people that by definition lack money.An issue with the implementation strategy is that VCs’ websites are often woefully non-representative of what the firm is actually about (like you said— it can be more like what the firm *wished* it were like). And some of the more succesfull/more progressive ones are actually stripping all of their data out— check out Benchmark Capital to see what i mean: (it’s all gone now!), or Sacca’s lowercase capital which looked terrific for a while but the super successful, interesting bits were all being done your numbers: if 4356 startups actually *landed* money (and is this US only, or worldwide?), wouldn’t it stand to reason that there’s actually 50- to 100-fold that amount that actually went out and *tried* to raise, and therefore the TAM is more on the order of mag of 100k’s of people rather than 1-10k’s?

    1. fredwilson

      i don’t think its 10x. maybe 2-3x, but not 10x

  40. OurielOhayon

    that is indeed useful but 2 caveats. the arrival of a new partner with specific background and track record within a fund can change the trajectory of the investment strategy; also the fact a fund has not invested in a specific sector does not mean they won’t…they may just wait for the right opportunity (just as you did with Etsy or Twitter)Finally sometimes there is also portfolio saturation around a specific topic/vertical (too many consumers mobile apps,…) and a logic of diversification is required. So the big picture is not helpful in that sense. The only real way to know is to ping the VC and see what the answer isLast comment: i would not just crawl the VC website for portfolio links but also would run a simple analysis on the fund partnership: get their linkedin profile, field of expertise and run a conclusion from there. That would be very complementary

  41. Lili Balfour

    Great idea, Fred.I’ve been collecting VC data manually for about 8 years. I’d love to partner with someone who can help automate the beast.Currently, I’m using Form Ds to capture funds that have raised capital. Then I reach out to each fund to interview them. I agree that the data you find publicly is not a great indicator of the fund’s actual investment thesis. It takes a bit of sleuthing to get to the right data.If anyone is interested in working on this with me, email me at [email protected]

  42. stevewfindlay

    Matchcapital do this already in the UK. At c. £25 per month.Separately, we are building this data bank out implicitly within (companies and their investors) and aim to make it easier for CEOs to raise capital as a result. Just need to create a way to do this which doesn’t impact on user data privacy. Which should be solvable.

    1. richardbrevig

      Clickable: https://www.matchcapitaluk….They should make it more clear that they’re not another crowd-funding platform. With that said, they claim 800+ investors profiled. That’s a fraction of how many they should have in their system. But it’s a start.For Reportally, how are you intending to make it easier? By matching them similar to matchcapital?

      1. Peter Walsh

        hi Steve, thanks for the mention, and Richard, your comments are taken on board.

  43. William Oliver

    Great post Fred. I think having an Agency Model would be a great idea. Basically treat it the same way that the film and entertainment industry treats the process. The agent helps to bring the partners together in preparation for fundraising the launch of the movie project.

  44. porteous

    Thanks Fred. As usual, you’ve highlighted a real gap that needs to be filled. I’ve thought about this for years in the context of the deal flow that we receive at RRE that falls far outside of our active areas of investment. Even when we have clearly communicated an active thesis in public posts and highlighted our most recent deals, we still spend a lot time telling prospective entrepreneurs that things are simply “outside of our areas of interest.” This is more challenging in a firm when you have a number of different investment theses active at the same time.The metadata tags you mention in your earlier comments are a good solution for improving the picture. Between primary, seed, and follow-on financings, we close 80-100 investment transactions every year and I’d be happy to see them tagged at closing, at least by stage and sector, so that activity could be tracked as it happens. We could easily add this to our standard pre-closing procedures. It would cut down on a lot of the hard research that has been described here today. The only hitch would be that companies often want to wait until a certain date to announce the financing – but one could set a future date for the tag information to be posted to a central data store.While this might take away some of the “mystery,” the benefit of large scale participation would be considerable. This would allow us all to see the “velocity” of money moving into certain sectors as it happens rather than living with a delayed, quarterly view.

  45. Emily Merkle

    had no problem.

  46. Kevink

    I’ve done this quite a few times. Especially interesting is when you look at how strategies change over time–for quite a few well known investors you’ll see pretty clear and drastic changes in strategy.


    I think this kind of tool has been the holy grail for entrepreneurs, as well as VC Investment Bankers since Capital IQ was created in 1999. As a banker, it is my job to identify the best potential VC investors for my Series A/B client. An accurate Database search engine for VCs, Angels, PE, hedge funds, that spits out the best prospects based on what I input would be enormously helpful. For years CapIQ seemed to be the only game in town…and very expensive. But recently I’ve seen several interesting online products, such as CB Insights, Mattermark, Prequin, Axial. I even think Bloomberg is trying to play here. I would love to hear some opinions of which is the best.

  48. thinkdisruptive

    It feels like this is data that wants to be free, so building a business around it is highly unlikely. In fact, the best operator of such a service might be a firm like USV, who not only helps direct entrepreneurs to the right place, but uses it to analyze directional opportunities, identify investment partners, especially for next stage investments. If an entrepreneur built such a service, and then a VC started offering it for free, they’d kill the startup, so it just seems too risky for someone to build with direct profit as a motive. It could also make sense for a Y Combinator, or a collective of entrepreneurs to build and manage.

    1. richardbrevig

      It’s like progressive’s auto insurance website for VCs…compare your options. I laughed at this though it’s not necessarily a bad marketing idea. Could be pretty good.

      1. thinkdisruptive

        Sort of like that, but not really. I think that VCs are less competitive for the most part, and much more like a cooperative. They share deals, pass on those that don’t meet their criteria or investment philosophy, may or may not participate in future funding rounds, need bigger partners for large rounds or to spread risk around. So, it’s less a competitive edge, and more a leadership positioning tool.Having such a tool on your site would make that VC the first stop if it was viewed as relatively complete, accurate and unbiased, and ensure that you get a look at all deals that you would like to see. So it actually makes a lot of sense for a group like USV, especially since they like to find deals at the earlier stages. Rather than thinking of it as “comparing your options” though, I’d think of it more like generating a list of candidates to find the right match.

  49. Peter Walsh

    Hi Fred, we’ve tried to create what you describe in your article at for UK and Irish companies. We’ve ended up, however, having companies from 40 countries sign-up to our site, to get the type of information you describe. What we’ve done is to build a relevancy algorithm based upon data science developed by Jagadeesh Gorla, my CTO, at University College London, where we “match” investors to each signed-up entrepreneur, based upon an investment profile the entrepreneur creates on signing-up. So, we draw upon the investment information we can glean from the investors’ portfolio pages, from their Crunchbase profile (if it exists), and other news sources, and then present the investor results to the entrepreneur, from most relevant to least. We look for new investments, as opposed to just follow-on investments, so we’re trying to home in on the guys who are the most active. Further, when the entrepreneur clicks on the full details of each relevant investor match, he/she can see how he/she is connected to that investor, via LinkedIn (we’ve written to LinkedIn’s API to achieve this). This is not a panacea to investment, but it is a huge time saver for the entrepreneur in zeroing in on the guys to whom he/she is “relevant”, and getting meetings sorted in a more scientific manner, than having to rely on bumping into someone at a networking event. Ours is a subscription model, at £29.99 a month, but we give subscribers a free trial period, after which they can choose to opt out or continue. Churn is high, but user satisfaction is also incredibly high, so we might not get rich, but we might get a Knighthood 🙂


    I think this kind of toolhas been the holy grail for entrepreneurs, as well as VC Investment Bankerssince Capital IQ was created in 1999. As a banker, it is my job toidentify the best potential VC investors for my Series A/B client. An accurateDatabase search engine for VCs, Angels, PE, hedge funds, that spits out thebest prospects based on what I input would be enormously helpful. Foryears CapIQ seemed to be the only game in town…and very expensive. Butrecently I’ve seen several interesting online products, such as CB Insights,Mattermark, Prequin, Axial. I even think Bloomberg is trying to playhere. I would love to hear some opinions of which is the best.

  51. Erin

    If someone wants to invent something, why don’t they invent a way for us to have two gmail accounts open on one computer ALL THE TIME? I want my personal account and my business account open. Why do I always have to log out of one to acess the other?

    1. richardbrevig

      There’s a couple ways you could do this:a) using chrome, open an “incognito window.” It won’t carry over the cookies from your other windows, so you can log in to multiple google accounts.b) use different browsers. In chrome, log into one account and in firefox log into a different one.I usually do option b so it’s easy to identify which account I’m trying to find at the moment.

      1. Erin

        I’m on it. Thanks.

  52. Brett Bringardner

    As a contrarian/outlier I always assume a VC should have a diverse portfolio and approach if my startups are NOT represented. You guys do like to hedge with diverse bets… Right ? 😉

  53. Mohit Garg

    This is a lifestyle business if it stops at just research reports of VCs, but you can derive greater lifetime value if you can continue to serve the entrepreneurs in other ways they need you such as with a platform to submit portfolio metrics.At Fundwave, we work in a similar market (we sell fund administration software to vc funds), and are building a solution for entrepreneurs to submit their metrics to investors. I guess such ‘vc research’ could be an interesting way to onboard entrepreneurs, especially when offered free.

  54. Derek Jones

    A little late to this discussion but ever heard of PitchBook Data?Right now I am on Benchmark’s page and I can see who their LPs are, what deals were made from which fund, their entire portfolio (total & active) all of their exits, their co-investors, pre/post money valuations of their deals, who the lead partner was on the deal, the executives contact info and more.Everything that has been pondered or questioned in this thread can be found in PitchBook. Of course I am bias but the amount of data and transparency into the venture space is unparalleled. Sorry for the pitch but if you have not seen PitchBook you really should check it out.

  55. mjklanac – Seems like another decent head start (levels/stages already included). May be best for the portfolio and focus areas to be seeded then wiki’d as opposed to scraped.

  56. MFishbein

    I tried it early/mid last year. No longer a URL.

  57. MFishbein

    That might be a good idea. I have started giving the data away for free to entrepreneurs I know and they are finding it very helpful.

  58. Sebastian Wain

    I don’t want to create a business, this is a tool.

  59. JimHirshfield

    Cool. You should go for it, provided you test the waters and get some initial feedback from VCs that they’d back/sponsor the project.

  60. JimHirshfield

    For sure. I guess the reality is, is that there isn’t a catch-all phrase because there are so many different circumstances and types of businesses that are non-VC backed. So we shouldn’t try to name them as if they’re all similar.

  61. awaldstein

    HmmSo a restaurant with a certain number of seats and and expected turn is a lifestyle business?Being faceitious.The kicker here is how much capital you need.

  62. JimHirshfield

    But there are costs associated with this, no? At least hosting

  63. Anand Sanwal

    I think you’re severely underestimating the challenges of getting clean, real-time data. Crowdsourcing means you need editors else you’ll end up with garbage data. All of the existing crowdsourced efforts for this data have all become garbage in terms of quality for that exact reason.

  64. awaldstein

    The world doesn’t need yet another verticalized social net. Palpable and accessible data–surely.

  65. Alec Wilson

    There’s a decent amount of the markup that could already be used: most of the BusinessOrganization entities, ItemList, Collection, would cover the portfolio company information, and you could use the QuantiativeValue schema to include investment amounts. However, you are probably right that creating a schema specifically designed for VC’s so that they don’t have to wrap their heads around markup if they aren’t interested wouldn’t be difficult and would likely increase adoption.

  66. fredwilson

    so you know how valuable this is

  67. fredwilson

  68. richardbrevig

    I’m not making a stand either way on this product, but have you seen ? This is their exact approach: crowdsourced competitive intelligence.

  69. bfeld

    Fair enough. It’s not my place to judge philosophically whether or not the data should be open or not. That’s a business model decision. And there are approaches that likely work for both scenarios with all market segments.

  70. markslater

    now THAT is valuable to me. I just signed up to Owler. I’d happily contribute info about my company in return for gaining the insights i am looking for.

  71. richardbrevig

    Did you have any particular insights you were searching for or just generally like the info they provide? I’m curious.

  72. markslater

    Following everything about my competitors is a big plus. beyond that (and only 20 mins in to looking at it) i am still feeling my way around.i DONT like the permanent questionarre on the left panel though….

  73. richardbrevig

    Yeah, a large portion of their value proposition are their surveys. You’ll notice almost everything is a survey. Revenue, ceo status, most likely outcome, etc…it’s an aggregation of what their community thinks. But I believe their strong points are in their funding data (compared to crunchbase) and they send out a daily email with press notices and blog posts from the companies you’re tracking. I don’t know how thorough their data is, that is, if they’re just reporting funding on popular companies or on all companies in their system.

  74. markslater

    well anything is an improvement on techcrunch.

  75. MFishbein

    The problem with VCs having profiles is that you are dependent on the network effect. Like Angelist is. Only about half to 2/3 of the investors I was tracking were on angelist.

  76. fredwilson

    I’m not the one to ask. Nick and Jonathan are our leads on the website