With our quarterly venture capital report for Q4 2011 having just come out, we inevitably will get questions when the Dow Jones VentureSource report eventually comes out a couple weeks later about why the data is different. We did a comparison some time ago of venture capital databases, but since we get the question pretty regularly, we figured we’d document our answer publicly.
Dow Jones VentureSource is just not that good.
That was simple. By not that good, we mean that as a venture capital database, Dow Jones VentureSource data is not that accurate, complete or timely.
Let us explain why.
It comes down to Dow Jones VentureSource having an outdated data aggregation model. It wasn’t always outdated. In fact, it was the right model in 1992…
When your model is based on what is effectively begging (their euphemism for this is surveying) VCs for data as the tweet above demonstrates, there is a problem. If surveys are not returned, the data is not complete and that is what drives some of the discrepancy in numbers. And those surveys which are returned come in at different times often way after deals have bee done which means the data is not fresh. This is also what drives Dow Jones VentureSource’s report to come out a couple of weeks after us.
And let’s be clear, when Dow Jones VentureSource writes that “your participation is crucial”, they mean your (the VCs) participation is crucial to their, meaning Dow Jones’, business model. Ultimately, their model is based on getting data from VCs and then going back and overcharging those same VCs for the data they just provided.
This is not based on speculation. VCs who are current customers of Dow Jones VentureSource tell us this pretty matter-of-factly. It’s primarily analysts and associates who are in the trenches in these databases on a day-to-day basis. At the end of 2011, we worked with many many VC firms who needed data on companies or general market trends to identify potential dealflow for 2012 or for LP or strategic planning presentations. Interestingly, almost half of them said they were VentureSource subscribers. So when we asked why don’t you just use VentureSource, their primary reason was VentureSource data is not complete or not timely. The second reason was dissatisfaction with their product’s UI/UX or search capabilities.
You are probably not surprised to hear that we most definitely have a horse in this race. We understand the “nobody ever got fired for buying Dow Jones” mantra, but when you get sick of bad data, poor UX/UI, shoddy customer service and overpriced data, email us or just sign up for a free trial and give us a spin.