What Is Startup Scouting & How to Do It Efficiently

Finding the best startups to work with is an important task for investors looking for their next opportunity. It's called startup scouting and refers to the process of searching for promising startups, usually those in the early stages.

Traditional scouting techniques, such as networking, have proven effective over time, but new technology-based methods can help make this process much more efficient.

This week's newsletter explores how venture capital (VC) firms can use public web data and other popular methods to scout promising and innovative startups.

Startup scouting techniques

Databases

Databases provide up-to-date information about companies, their firmographics, funding deals, and more. Great examples of popular startup scouting databases are CB Insights and Crunchbase , which have information on thousands of companies.

It's a convenient tool for discovering new technologies, innovative ideas, emerging companies and keeping up with what's new in the startup ecosystem.

Dedicated startup scouting platforms

Dedicated startup scouting platforms are specifically designed to help investors and corporations discover relevant startups. The information in these platforms can be presented in various ways, for example, in a self-service tool or in the form of actionable insights.

Using startup scouting platforms, VC firms can quickly find startup companies to invest in by filtering companies based on their size, location, founders, founding date, and more. These tools help the users to find startups they are looking for at scale, quickly, and accurately.

Networking events and personal contacts

Networking is the most traditional method among those that we're discussing in this newsletter.

There are various events where investors can look for new promising startups creating innovative technologies, from major conferences to startupers' breakfast events.

For someone working in the investment industry, it's essential to have an extensive personal network of people who can connect you with promising projects, and events create various opportunities to expand that network.

Improving startup scouting with public web data

Technology-based startup scouting, which is an efficient way to find new companies to work with, is closely related to public web data. When looking for new startups or ways to evaluate already selected startups, investors can use various public web data points to do it quicker and at scale.

Scouting activities can be split into three stages: planning, search, and evaluation. Let's explore how public web data can benefit each of them.

Planning stage

Firstly, it's important to identify criteria which matter in the search. It can be the startup industry, size, location, company maturity, its people, or other aspects that interest you.

In this stage, public web data can be used for a general analysis of the industry and the business environment of the companies you're interested in.

Search stage

This stage presents many options to anyone looking to discover promising startups. It can be done in a more traditional way, like relying on networking. However, nowadays, startup search can be completely automated and enriched with channels and sources you wouldn't think of at first.

For example, instead of going to an event to look for new startups, there are automated solutions that crawl the websites of such events and gather public information about the startup participating in the event.

Coresignal's public web datasets, such as firmographic, review, or employee data, can be used in the search stage for the following purposes:

• Find companies or industries showing early growth signs
• Identify startups that desperately need investment
• Look for startups that are about to reach a more mature stage
• Find companies and technologies that are at the very early stage
• Screen for emerging companies and technologies receiving a lot of attention from users

The most important benefits of technology-based startup scouting mechanisms are that they make this process much quicker and help investors find the true hidden gems that might be impossible to find without technology.

Evaluation stage

When looking for startups, investors look for information about their headcount growth, employee and customer satisfaction levels, and other factors that help determine the overall situation of a startup company.

There are various aspects of the startup company that help the investors evaluate those that they select for consideration:

• The team
• The business model
• Consistency of company growth
• Competitive landscape

Let's take job posting data as an example. Using information about job posts by specific company or companies, investors can monitor the following things:

• Changes in key roles
• Talent movement between companies they are interested in
• Changes in management positions
• How company compares to its competitors

All this information is available in public job postings. When it's delivered to investors at scale and is continuously refreshed, it helps them get a better overview of the situation of the companies they have on their radar.

Want to learn more about startup scouting? Read our blog post.

Coresignal is a leading public business data provider in the web data sphere with an extensive focus on firmographic data and public employee profiles. Leveraging data of 740M professional profiles and 104M company records enables companies to build data-driven products and generate actionable insights. Coresignal is exceptional in terms of data freshness, with 419M records updated monthly for unprecedented accuracy and relevance.