The aim of any venture capitalist is to invest in the success of small companies in order to earn a return on their investments, so they are in a constant search for new ventures and start-ups to invest in. But success can’t be guaranteed, so there’s always a risk of failure. However, this risk can be diminished if you have access to enough data to analyze the market and research your opportunities.
So if you are a venture capitalist, you know the importance of making a good pick for your investment because if your pick fails, it can result in a major loss. Some venture capitalists are so well-off that they can afford a couple of failures in return of giving a chance to a start-up with a great idea and team behind it. However, that’s not a strategic way of thinking in the 21st century of intense competition. Making a smart decision will pay-off not only to you as an investor, but to the venture in which you invest in as well.
So how exactly data scraping can help a venture capitalist? The answer is very simple: the more you are equipped with the knowledge and the more data-driven investor you are, the higher is the chance of succeeding in the investment you make. In this post, we’ll go into detail on how data scraping services can help a venture capitalist become a data-driven investor and get the most out of an investment.
Benefits of Web Scraping For Venture Capitalists
Web scraping or data crawling is the process of scanning and collecting data from the web via sophisticated tools and software. Considering how large the web is today, it’s impossible to research a specific industry manually. That’s where web scraping and web scraping services help a lot of companies, including venture capitalist firms.
Venture capitalist firms always hire an analyst, who spends an enormous amount of time looking for attractive deals for the company to invest in. Before, an analyst used to play a critical role in the overall investment research process; however, times have changed and today, a single person can’t undergo this long and tiring process. It would be ineffective and unproductive to implement all of this alone and manually.
We live in an era of technology, which aims to make our lives less complicated and bring in more productivity. Web scraping is one of the tools that can bring more productivity into our activities by simplifying the research process. Let’s look into some benefits of using data scraping and how it helps venture capitalists be more productive and effective.
Timely Decisions
The most obvious benefit of using web scraping is the time-saving factor. Working with data scraping services will make sure that you get your data in a timely manner and from the most reliable sources. The analyst will invest his/her time into more productive activities, such as evaluation and analysis of the data.
Trends and Opportunities
The ability to spot trends on time is a highly valuable skill for any venture capitalist. By scraping special websites for start-up news and updates, you can always be aware of everything that happens in the industry and use analytics to spot trends. Once you spot a trend, you find out a lot of opportunities in which you can invest. We’ll talk about this in more detail later in the post.
Reliable Findings
The technology and algorithms behind web scraping are smart enough to differentiate a reliable source from a list of numerous websites online. When doing research manually, you need to put an extra effort into making sure that the data is reliable and authentic. While using data scraping for your data needs means avoiding issues of reliability.
Types of Data That Venture Capitalists Can Get
The above-mentioned points are only some of the benefits that web scraping can offer a venture capitalist, who wants to make data-driven investments. Let’s dig deeper to understand what kind of data you can get with data scraping and how exactly that data will help you make strategic data-driven investments and decisions.
- Scrape profitable niches – by constantly scraping relevant websites to spot trends, you will be able to find the niches that are the most profitable at the moment. Finding a niche that will bring you profit is one of the most important things that a successful venture capitalist should do. If you invest in a venture that has a higher chance to succeed, you will also find yourself in a good position. For this, you will need a regularly updated scraped data for titles, keywords and dates, and input all of these data into an analytics tool. So you will have information on the most used words, the most popular ideas, and the trending titles. Such an analysis will give enough insights to understand what is trending and spot a profitable niche.
- Scrape event websites – events are an important thing in the venture capitalist world, as they present great opportunities for both start-ups and venture capitalists. As a venture capitalist, you want to have an updated list of all the attendees of events that you are planning on to visit so that you can get a better understanding of what to expect. In just a few minutes, you can get detailed scraped data on the events, their attendees, as well as information on those attendees and their start-ups.
- Scrape lists of start-ups – So once you understand your niche and find relevant events, next you want to scrape the lists of start-ups and the ventures they are presenting. As already mentioned, you can scrape the list of attendees of these events, along with their ventures. Knowing your niche, you can analyze which of them match your preferences and prepare yourself for the meeting. However, don’t be limited to these events only. There are so many websites that carry valuable information about start-ups, and they are updated on a regular basis. Scrape and crawl these websites to find start-ups to invest in. Collect information about these ventures, spot the ones that are in your niche group, and prepare yourself for a successful data-driven investment.
How the Scraped Data Can Affect Venture Capitalists’ Decisions
By now you must have a good understanding of how data scraping will guide a venture capitalist to make data-driven investments. A data-driven investment means an investment that is based on knowledge and information; an investment that is packed with lots of insights and is based on good market research and its solid understanding. Due diligence is an important factor to consider in the decision-making process.
Due diligence refers to the overall process of appraisal and evaluation of a venture before making any agreement or investment. It’s a critical process for all investors who want to succeed. The due diligence process selects the potential winner candidate. It identifies the key risks associated with the investment and develops a risk mitigation plan with company management as part of a potential investment. All of the decisions are implemented in a data-driven format and are based on reliable data crawled from all over the web. So web scraping affects not the decision itself, but the overall decision process and how it is carried out. Here’s how it goes: researching the market, spotting niches, evaluating potential risks, and only then making a final decision. There are a ton of trends, technology and portfolio companies that are required to be monitored before making an investment decision. Data scraping is a great solution for all data needs and will help in extracting and aggregating any data in a structured format to make strategic venture capital decisions. So to conclude, we can simply say that data scraping aids and eases the decision-making process for venture capitalists.
The Increased Use of Data Scraping by Investment Firms in Future
The future of data scraping holds a lot of opportunities for venture capitalist firms. The investment sector will be actively utilizing data scraping for making strategic decisions. Also, the rise of artificial intelligence together with the sophisticated web crawling technologies can create great opportunities for many investors. The scraped data will be easily analyzed and presented to the investors and guide them on making strategic decisions. Also, the rise of technology will create robots that will find data in no time, answering very specific questions.
Let’s consider some statistics for the future of web scraping for investors:
- The number of daily accessed web pages for data extraction for investments exceeded 10 billion pages per day in 2018. This number is expected to exceed 25 billion per day by the year 2022.
- The heaviest web scrapers that harvest data for investment purposes only crawl data from more than 100 million web pages per day. The volume of data scraped web pages is enormously huge and includes all sorts of websites, even the biggest and busiest websites in the world, including Facebook and Google.
- By 2020, the predictions are that there will be over 2 billion websites together with trillions of web pages. Considering these numbers, it’s quite anticipated that asset managers, equity analysts, and traders are increasingly using web-based data. And the resulting information is incorporated into the daily decision-making processes.
- The total spending on web scraping for investment purposes is expected to exceed $1.8 billion by 2020. Just a bit more than two-thirds of this number will be comprised of internal spending. Also, external spendings are expected in order to see accelerated growth in the near future.
So the future of web scraping is full of opportunities not only for venture capitalists but for all sorts of investors. Data is the most powerful tool that helps make knowledgeable and strategic investment decisions. Data-driven investments are the future of venture capitalist firms because only a data-driven investor can be successful.
We have to admit that we live in the most innovative century when new ideas are born every day. And there are a lot of young enthusiasts, who are full of passion to turn their ideas into life. However, since there are so many of them, it can be hard for venture capitalist firms to find the ones that are worthy. Venture capitalists can use their money wisely by helping these youngsters in their ventures, yet earning a good return for their investment. Web scraping can help venture capitalists by providing reliable data so that they can make strategic and data-driven decisions.