Startups excite not only investors but anyone interested in technological development and business in general. Up-and-coming companies with great ideas generate buzz due to their potential to change our lives and make money along the way. Thus, there is currently a high demand for startup data that would help to track these companies from the early stages. Naturally, where there is demand, there is also supply. Finding the right startup data provider might be challenging in 2023 due to the constant growth of the data industry. Below you will find some useful tips on how to choose what is best for you.
What do you get out of startup data?
Finding the right data provider starts with figuring out what kind of data exactly you need. First, you should ask yourself what you want and can get out of startup data and how it will help to advance your goals.
Different individuals and enterprises have different purposes and data strategies. In addition, they also have various relationships with startups.
For investors, startups provide a good financial opportunity. However, startups need investors more than investors need startups. Thus, there is considerable competition among the latter to attract investments by any means possible. This means that investors have to be very wary of what they hear from startup managers about their company.
This is where impartial startup data comes in. Investors can receive this data from third-party sources to objectively evaluate the potential of the company. Weighed against objective facts, the claims of the interested parties can be either corroborated or disproved. And that allows for well-informed investment decisions.
Investors also use startup data for investment modeling and machine learning practices. Algorithms can be trained with startup data to both predict the outcomes of currently available investment opportunities and learn to identify such opportunities in the future.
All this comes down to one thing – investors need a lot of startup data in constant supply. Thus, when choosing the data provider, investors will want to see how reliable they are for a long-term commitment and what volume of data they are capable of supplying.
Some, on the other hand, only need startup data as a supplement for the alternative data they already have. If you are gathering all your data yourself but recognize that your data sets have some important gaps, you might want to turn to a data provider to fill those gaps.
Additionally, companies might be interested in particular competing startups or economic regions. In this case, one would be interested in specific startup data. Therefore, when looking for a provider, it would come down to whether they are able to offer that kind of data. Thus, as you might get very different things from startup data, choosing the provider starts with knowing yourself and your data needs.
What can you know about a startup?
The types of startup data are also extremely important here, as they determine what kind of information exactly you get. Every piece of information about a startup can be considered a kind of startup data. Therefore, startup data types include but are not limited to the following.
- Its age and when it first appeared on the radar.
- All available information about the management team and other personnel as well as the headcount.
- Whether the founder had previous experience with startups.
- Financial data relating to where the funds come from and any assets of the startup.
- Its economic region and location of headquarters and any other real estate.
There is no limit to what other data points might be included in packages of startup data received from the providers. As long as this data is relevant and can be used in analyzing the startup’s potential and strategies, it is all good.
Tips for picking the right startup data provider
Now it is time to turn to what you should look at when choosing your startup data provider in the year 2023. There are a few questions that you need to ask yourself and some features of the provider to be wary of. Below are a few tips to get the startup data supplier that will provide the service you need.
- Check for data quality and quantity. As mentioned above, the more data you need, the more important it is that your provider can consistently gather and deliver large volumes of it. Thus, it is advisable to look for well-established startup data providers. Quality, however, is even more crucial than quantity. Thus, if you can get samples of data to see how it is structured, use that chance. All in all, the best thing is to get your startup data from a well-rounded alternative data provider.
- Check data marketplaces and lists of data providers. The internet is full of platforms that connect data providers with buyers. You can check reviews and scores on these sites to figure out which startup data providers have a great track record. These are likely to be the ones that you need to get in touch with.
- Figure out whether the data delivery method suits your needs. Different providers might use varying structuring formats and methods of delivery. Some might only be able to provide data in CSV or XLS files, while others have a wider range. Additionally, some providers will have options to browse for the data you need with an API. The more options the supplier can offer, the better for you.
- Do not shy away from using multiple startup data providers. If one provider can only give you part of what you need, there is always an option to integrate it with data from other sources. No one will ever be able to have all the data. There is just too much of it generated constantly. The more sources you have at your disposal, the better.
At the end of the day, what matters most when choosing the right startup data providers is avoiding scams. Thus, just look into what the most reliable providers can offer you and take your pick based on what you need. You cannot go very wrong with the industry’s leading data suppliers.
Also Read: What Is the Best Way to Finance a Startup Business?
