Understanding the global trends in investments so that we can make investment decisions effectively.
I have taken real investment data from crunchbase.com, so the insights we get may be incredibly useful.
The business objectives and goals of data analysis are :
- Business objective: The objective is to identify the best sectors, countries, and a suitable investment type for making investments. The overall strategy is to invest where others are investing, implying that the 'best' sectors and countries are the ones 'where most investors are investing'.
- Goals of data analysis: Goals are divided into three sub-goals:
- Investment type analysis: Comparing the typical investment amounts in the venture, seed, angel, private equity etc. so that we can choose the type that is best suited for their strategy.
- Country analysis: Identifying the countries which have been the most heavily invested in the past. These will be we favourites as well.
- Sector analysis: Understanding the distribution of investments across the eight main sectors. (Note that we are interested in the eight 'main sectors' provided in the mapping file. The two files — companies and rounds2 — have numerous sub-sector names; hence, we will need to map each sub-sector to its main sector.)
This is the first of the three goals of data analysis – investment type analysis. The funding types such as seed, venture, angel, etc. depend on the type of the company (startup, corporate, etc.), its stage (early stage startup, funded startup, etc.), the amount of funding (a few million USD to a billion USD), and so on. For example, seed, angel and venture are three common stages of startup funding.
- Seed/angel funding refer to early stage startups whereas venture funding occurs after seed or angel stage/s and involves a relatively higher amount of investment
- Private equity type investments are associated with much larger companies and involve much higher investments than venture type. Startups which have grown in scale may also receive private equity funding. This means that if a company has reached the venture stage, it would have already passed through the angel or seed stage/s
This is the second goal of analysis — country analysis(Only english speaking countries). Now that we know the type of investment suited for us We wants to invest in countries with the highest amount of funding for the chosen investment type. This is a part of its broader strategy to invest where most investments are occurring.
This is the third goal of analysis — sector analysis. When we say sector analysis, we refer to one of the eight main sectors listed in the mapping file (note that ‘Other’ is one of the eight main sectors; also, there are eight sectors if we consider the category 'Blanks' as a missing value). This is to simplify the analysis by grouping the numerous category lists (named ‘category_list’) in the mapping file. For example, in the mapping file, category_lists such as ‘3D’, ‘3D Printing’, ‘3D Technology’, etc. are mapped to the main sector ‘Manufacturing’. Also, for some companies, the category list is a list of multiple sub-sectors separated by a pipe (vertical bar |). For example, one of the companies’ category_list is Application Platforms|Real Time|Social Network Media.
- A plot showing the fraction of total investments (globally) in venture, seed, and private equity, and the average amount of investment in each funding type.
- A plot showing the top 9 countries against the total amount of investments of funding type FT. This should make the top 3 countries (Country 1, Country 2, and Country 3) very clear
- A plot showing the number of investments in the top 3 sectors of the top 3 countries on one chart