Benchmarking Venture Capital Databases

There has been an increasing asymmetry between the rising interest in private companies and the limited availability of data. While a group of new commercial data providers has identified this gap as a promising business opportunity, and has started to provide structured information on private companies and their investors, little is known about the quality of the data they provide. In this paper, we compare detailed and verified proprietary information on 339 actual venture capital (VC) financing rounds from 396 investors in 108 different (mostly European) companies, with data included in eight frequently used VC databases to help academic scholars and investors better understand the coverage and quality of these datasets and, thus, interpret the results more accurately. We find that greater financing rounds are more likely to be reported than lower ones. Similarly, financing round sizes and post-money valuations are more likely to be reported for greater financing rounds than for lower ones. Our analysis reveals that VentureSource, Pitchbook and Crunchbase have the best coverage, and are the most accurate databases across our key dimensions of general company data, founders and funding information. We describe our findings in detail and discuss potential implications for researchers and practitioners.

Authors

Andre Retterath

Technical University Munich

Reiner Braun

Technische Universit√§t M√ľnchen (TUM) - TUM School of Management; Center for Entrepreneurial and Financial Studies

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3706108