The ongoing shift towards data-driven methodologies is expected to reshape the VC landscape significantly. A report by Data-Driven VC predicts that by 2025, over 75% of deal analysis will be informed by data and analytics. This mirrors trends in public markets, where algorithmic trading has transformed investment strategies.
With the increasing availability of data through public databases, social media platforms, and specialized data services, VCs are increasingly able to harness this wealth of information for competitive advantage.
An opportunity to explore these themes further will be at the Venture Intelligence Day, organized by Vestberry (portfolio intelligence software for VCs), taking place on October 16-17 in Prague. With over 150 VC professionals expected to attend, this inaugural event promises engaging discussions on the latest trends in VC technology and how data can enhance investment strategies.
To gain deeper insights into the topic while preparing to attend Vestberry’s event, we spoke with some of the event’s speakers about their approach to data in the VC industry.
Leveraging data across the investment lifecycle
Data is now integral to various stages of the investment lifecycle, from deal origination to portfolio management. Tommaso Condulmari of P101 highlights this comprehensive approach:
“At P101, we leverage data throughout the entire investment lifecycle, fund management and investors relations.”
By combining off-the-shelf tools with custom solutions, firms can analyze both structured and unstructured data from diverse sources, including startups, social media, and industry reports. This enables VCs to track emerging trends and evaluate companies more efficiently.
Codulmari’s view aligns with the 2024 Data-Driven VC report, which found that 35% of investors attribute at least half of their deal sourcing to their data tools, underscoring the critical role of data in modern venture capital operations. Furthermore, 66% of respondents reported using large language models (LLMs) for tasks like screening and due diligence, automating some traditional analyst roles.
However, this approach seems to work better for generalist funds.
Impact investing and data: A different perspective
Mustafa Torun from Invest-NL offers a contrasting perspective:
“As an impact investor, our approach to data is slightly different from a traditional VC, strategically. For example, while VCs often focus on finding the next unicorn and edging out competitors in deals, our mandate requires us to take on riskier deals and actively pull other players into the ecosystem. Instead of simply identifying the most promising company faster, we focus on understanding funding gaps, market inefficiencies, and capital flows etc, so that we can be truly additional and maximize the impact we create.”
Torun also elaborates on the broader use of data:
“I prefer to call it a “data science culture” because many people in the VC world are already data-savvy, especially with backgrounds in finance or econometrics. The term ‘data culture’ can be too simplistic in this context. The real gap isn’t basic data literacy, but rather the advanced capabilities of applying data science methodologies, engineering frameworks, and strategic thinking.”
Balancing data with human intuition
Despite the growing reliance on data, experts agree that human intuition remains essential in venture capital. Condulmari notes that assessing team dynamics and startup culture requires qualitative insights that data alone cannot provide.
“We employ a hybrid strategy, blending data-driven and qualitative insights” for more informed decision-making.”
Alex Patow from Inflection.xyz adds that while deep connections with founders are irreplaceable, augmenting intuition with data allows for faster decision-making and improved objectivity.
“There’s no substitute for deep connections with founders, other VCs, and our own intuition; I think that’s what’s special about this asset class. By augmenting our “gut instinct” with data we’re able to move faster, be more objective, and optimize our time.”
Antoine Latrille of Newfund reinforces this perspective by stating that gut feeling often drives initial investment decisions, with data serving as a supportive tool for validation.
“At Newfund, the gut feeling is the biggest factor and the data comes afterwards, as support for proof. Our best investments were ones where we were on ship less than a minute after presentation. The rest of the process was mostly to make sure there were no red flags.”
As the VC landscape continues to evolve, the integration of data into investment practices is expected to reshape how firms operate. For example, the aforementioned reports indicate that 84% of VC firms express a desire to increase their efforts on data-driven initiatives. This trend is not only about improving efficiency but also about enhancing returns through better-informed decisions.
Upcoming discussions at Venture Intelligence Day
More on these topics will be discussed at Vestberry’s Venture Intelligence Day, featuring a lineup of professionals passionate about technology, finance, data, engineering, and operations. Confirmed speakers include Dr. Andre Retterath from Earlybird VC, Keshvi Radia from Balderton Capital, and Iva Rakcevic from Elevator Ventures, among others. For more information, check out the event’s website.
