Look across virtually any industry and you’ll see great examples where traditional spaces are being disrupted by software, access to data, and massive online communities. The net effect is powerful: it empowers all of us (no matter who we are or where we are) to learn more quickly, make better decisions, and operate more efficiently.
Thus, it should come as no surprise that we are now seeing Venture Capital being disrupted by these forces as well.
In the past (aka 1990’s), very little content on start-ups and VCs was publicly available. The fundraising process was closed and privileged: it all boiled down to who you knew offline. In his post The Disruption of Venture Capital, Albert Wenger described VC as “the club you had to be invited into.”
Today, the boom of information (i.e. start-up databases/networks like CrunchBase and AngelList) has led to unparalleled access to investment capital as more seed funds, angels, and syndicates emerge on the scene. People who are not traditionally in VC can now invest in startups with a higher comfort level, because CrunchBase and AngelList have made data on thousands of start-ups publicly available. In just a few clicks, you can find everything from the company’s tagline to information on founders and investors, number of employees, funding rounds, etc.
However, while we may be shifting from a closed system to a more transparent (and hopefully merit-based) environment, there’s a lot of noise being created along the way. Business data on start-ups, VCs, PE, financial markets, sales and marketing is being created at an alarming rate. Yet, most of this data is fragmented and inconsistent – making it difficult for decision-makers to leverage the information.
So, how can we use all this data to make better decisions? Or more specifically, how can we as investors better identify and find those start-ups that are primed for success?
Enter Mattermark: where “Big Data Meets Venture Capital”
Mattermark is a web-based platform that helps VCs weed through the vast amounts of data to identify potential investment opportunities and track existing start-ups and private companies. The product collects, cleans, and curates data from news sites, SEC filings, Twitter, LinkedIn, Facebook, AngelList, CrunchBase, and more. It offers custom reports, real-time updates, specific filtering, and easy organization of start-ups based on stage, vertical, geography, and Mattermark score (a proprietary index that measures momentum).
Mattermark was launched in the Fall 2013 and is led by Danielle Morrill, Kevin Morrill, and Andy Sparks. The team are alumni of Y Combinator S12 as well as Batch 5 of 500 Startups in 2012. You can read about the company’s background on VentureBeat and TechCrunch.
Why we’re excited
The Version One portfolio is full of examples where software/online platforms are disrupting specific verticals – from Top Hat (education) to Upverter (hardware development), Figure 1 (healthcare), Jobber (field service), and Clio (legal). But, Mattermark is disrupting our own industry and giving us the tools to do our job more efficiently.
For starters, Mattermark allows us to be more proactive. Like with most VCs, our inbound leads come from our network. While we greatly appreciate these introductions from fellow VCs and entrepreneurs (who are great curators in their own right), inbound leads are inherently reactive. We’re relying on others to send what they think are the right opportunities for us.
But with Mattermark, we can now leverage the vast amounts of publicly available data to identify the rising stars and compare them to other companies in their vertical. Mattermark is never going to replace our own network, relationships, and gut, but it does make us much more efficient in sourcing and researching opportunities. We’re now able to generate more outbound leads.
Danielle Morrill has said that Mattermark’s goal is to create a company that is the equivalent of Bloomberg for start-ups and Venture Capital – providing investors with the tools to discover, research, and track start-ups. We’re excited for the possibilities.