Venture capital · Big data

How to source big data investors?

Greg Lipinski Patent Examiner at USPTO

December 8th, 2016

My early stage startup is more of a data company, and we have a partnership with a Fortune 500 data company that's selling our reports and consulting services to their clients. The VCs I've talked with thus far seem to have 0 grasp of how market research works i.e. they don't understand that 1000 users/market is a statistically representative sample for our purposes. I've made a list of VCs that say they invest in 'big data,' and I'm wondering if they'll get what we're trying to do. In general, what sorts of investors should I be approaching to help build a data company rather than a 'startup'?

Dane Madsen Organizational and Operational Strategy Consultant

December 8th, 2016

Check CB Insights, VentureBeat, and Angel List for the funds that are making investments in your space. You can also look at the investors in companies close to you in your space by checking the About Us sections on their sites. Dane Madsen 206.900.5852 Mobile Sent from my mobile device. Forgive typographical and grammatical errors.

Ian Shearer Executive Chairman at Parakeetplay

December 9th, 2016

Greg. You describe your company as "selling reports and consulting services". Its not clear to me that you are a VC proposition at all based on that description. A serious VC will want to see something thats highly scalable and selling reports and consulting services may not be.
I am Chairman of a Big data company that is currently going through a VC round but we are very, very scalable. We sell a software solution that can search unstructured data and visualize the results. We (and our investors) can see a vast potential market where we are just sort of reselling the same technology again and again. 
Point is, when a VC sees your company does he see that amount of scalability? My guess is the answer is "no" and thats your problem.

Mark Schopmeyer Investment Professional at Carrick Capital Partners

December 8th, 2016

I'll answer your question in two parts:

A lot of VCs are generalists.  Even the ones that cover specific areas such as Technology are generalists across large focuses (i.e., Healthcare, Software, Infrastructure, etc.).  Based on what you said, many of the top tier valley tech VCs will have a general understanding of what you do but your best path to finding the right investors is to find comparable companies (ideally not one that you compete with) and look who their backers are (i.e., BlueKai was backed by e.Ventures, Battery, GGV and Redpoint).  Since you mentioned big data, one VC that has a large focus on it is Data Collective.

Second part:  For what sorts of investors you should be approaching, I'd think about what your pain points are and what you foresee as the upcoming challenges in the next 3-5 years.  From that, I'd narrow down the type of investor you'd want (tech-expertise, S&M and operational experience).  There's a lot of "dumb" money being thrown around where people just sit on boards and nothing more - in my opinion, it's worthwhile to take a little discount on valuation for the right investor that can help you achieve your goals faster than standalone.

Tom DiClemente Management Consulting | Interim CEO/COO | Coach

December 9th, 2016

You really have to provide more information about what you're doing to get a good answer here, or else you have to do extensive research on VCs to find a good match yourself. Also confusing is that you show yourself to be a PTO examiner?