Home > Uncategorized > Venture Capital Websites Not a Good Source of Information

Venture Capital Websites Not a Good Source of Information

When I teach entrepreneurship or talk to startup companies I usually tell them to look at the websites of the venture capital companies that operate in their location, as a venture capitalist’s website the best place to learn about their investment strategy and investment portfolio. It turns out that data from the US shows this is actually not the chase (note to self).

This data shows that, having reviewed 200 venture capital firms’ websites (the largest, most prominent, most active firms) to see if they accurately reflected the firm’s investment strategy, investment history and portfolio of investments, the investigators from ChubbyBrain, who provide online tools and advice for startups, found that an overwhelming majority (92%) are inaccurate.

The analysts compared what the venture capitalist’s website says about their investment preferences and portfolio vs. their actual investment history to see how closely (or not) the two were. Venture Capital websites are inaccurate on at least one of the key evaluation criteria an entrepreneur would use when analyzing an investor to determine fit.

63% of venture capital websites were inaccurate with regards to the sectors that the VC invests in when compared their actual investments vs. what they say they invest in.  In 49% of the cases, the firm invested in fewer sectors than their website claimed.  In 14% of the cases, the VC actually invested in more sectors than their website suggested. Full data on this and other issues regarding the information given out by the venture capital community in the US can be found here.

It would be interesting to see if this data transfers to Irish or European venture firms.

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