Table of Contents
What is funding information?
Funding information is part of company data, indicating funding rounds, amounts raised in each round, the specific investment stages, investors, and other financial data points of companies. It can also include information about institutional or individual public investment.
This type of data offers insights into the financial health of a company and its ability to deliver high ROI. It helps investors identify trends and assess if the company can continue to get funding in the future.
Where does the data come from?
Most funding data is collected from various public sources, including whatever information companies publish on their websites or social media channels. It can also come from online news portals, media reports, press releases, and other relevant sources.
What types of attributes should I expect when working with this type of data?
Funding data attributes include the most recent funding date, the names of the investors, funding amount, the type of funding round, funding history, acquisition history, and the acquisition price. Funding information may also be categorized by region and industry vertical.
Vendors providing comprehensive information include sector name, industry name, Year-to-Date(YTD) total funding, and total funding in the sector.
How should I test the quality of the data?
The data requirements depend on the intended use. These datasets need to be frequently updated to reflect correct funding statuses. If historical information is a requirement for your use case, it is important to ensure that the details of the funding rounds are accurate.
To test the quality of the data:
- Ensure that the databases are up-to-date and consistent.
- Verify that the data matches your requirements, including the historical funding records.
- Make sure that the vendor and its sources are compliant with privacy regulations.
Who uses this type of data?
This data is used by financial institutions for company valuation and hedge funds. Investors use it to asses risk and the financial health of companies. Small or medium-sized companies trying to raise funds may also use this data to identify potential investors.
Financial analysts leverage funding data by region or verticals to compare companies and identify funding trends.
It can be used to augment other data categories, such as business registry data, for due diligence and to assess credit risk. Fraud investigators may also leverage this data for their research and analysis.
What are the common challenges when buying funding information?
This information supports investment decisions by assuring the status of a company’s funding, and the potential for further growth. Before choosing your vendor, ensure its credibility and timeliness.
- Source credibility: Confirm with your prospective vendors that their data is assured for quality and is trusted to drive analysis.
- Data timeliness and consistency: Funding information changes over time and the data from your vendor should provide complete and regularly updated information. Collected from various public sources, funding information may not be consistent across sources. Only updated, complete, consistent, and accurate data can provide accurate insights.
- Compliance: Funding information may contain personal information of investors and it must comply with data privacy regulations such as GDPR and CCPA. Privacy regulations are region-specific, and the funding information should be compliant with the regional laws.
You can test vendors with small samples and assess if they meet your requirements. Detailed evaluation of vendors can help you overcome these challenges and choose the right ones.
What are similar data types?
Funding information is similar to business registry data and web and social media presence. It can be used with Industry NAICS Classifier data for company valuation.
You can find a variety of examples of B2B and company data in the Explorium Data Gallery
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What are the most common use cases?
This data is commonly used for company evaluation and hedge funds. It data can power AI-driven analytics to identify several investment opportunities and B2B leads.
The following list illustrates some of the use cases for funding information.
- Hedge Funds: Hedge funds use aggressive strategies to manage a diverse portfolio of stocks, currencies, and derivatives. Quantitative hedge funds need supporting financial data to correlate with stocks for analysis and strategizing. Hedge funds use funding information to augment other B2B data to outperform the market.
- Company Valuation: Investors calculate company valuation based on several factors such as company credit score, industry vertical, and the number of employees. Some of this information may not be easily available, while funding information is widely available to contribute to the valuation.
- Market landscape analysis: Funding information along with business registry data, acquisition reports, and investor information fuels AI-driven analysis to provide deep insights into the market landscape of a specific business vertical.
- Assessment of investment opportunities: Investors use financial information to identify and investigate potential investment opportunities. Operational insight into the financial health of companies helps investors vet the candidates and make rewarding investment decisions.
- B2B Lead generation: Funding information helps identify recently funded or expanding companies ready to invest in B2B products and services to boost their performance. They may also be looking for partners, unlocking more business opportunities.
- Supplier Risk: Supply chains spanning multiple countries must assess the financial risks of their partners operating in different regions. Businesses often use funding information to identify the risk of suppliers continuing to get funded to sustain their operations.
Funding information can also enrich other B2B data and company data to create better predictive models for a wide variety of use cases.
Which industries commonly use this type of data?
Various industries use funding information to make data-driven decisions about companies and their financial health. Some industries that make use of this data are consumer goods or CPG, retail, eCommerce, banks, financial services, fintech, insurance, manufacturing, and hi-tech.
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