4 topics most important for software investors

Although investors have long used traditional data sources – financial statements, reports on financial results and economic indicators – they are increasingly turning to alternative data.

Using this alternative data enables investors to better understand market trends, customer sentiment and purchasing behavior. Examples of alternative data include credit card data, social media content, satellite data, and G2 Software Marketplace data – such as customer reviews, buyer intent traffic, time to return on investment, and more.

G2 Data Solutions enables our investor clients make informed decisions regarding potential investments in the software industry. By providing unbiased user reviews, competitive analysis, insight into product-market fit and market trends, G2 data enables investors to make data-driven decisions and identify opportunities for growth and success.

Last month ours The Data Solutions team took part in two events addressed to investors: Alpha EagleAlternative Data conference in London AND BattleFin Discovery Day in New York.

At these events, we enjoyed meeting investors and learning more about the most important issues for our clients. Here’s what made our team stand out:

Time for sentiment

There was a strong focus on the importance of investors using alternative data sources for sentiment analysis to better understand customer preferences and behavior.

With text analytics, traders can identify signals through numerous sources of contextual data, including social media, online forums, videos and news. Investors quantify sentiment and integrate it with other structured data sets to capture market sentiment.

G2 Data Solutions captures the voice of enterprise software buyers through over 2.6 million authentic, verified reviews. Software buyers complete surveys that translate into 48 different data points on over 160,000 products and services and Over 130,000 software providers worldwide.

This unique dataset includes data confirming user sentiment, observing buyer behavior patterns, price changes, supplier comparisons to competitors, and product switching analyses.

LLM companies are revving up their engine

Over the last few years, Large Language Models (LLM) have evolved significantly, offering new capabilities in data processing, summarization and predictive modeling.

These models can handle massive amounts of unstructured data, providing deeper insight into information in seconds. Increasingly, investors are integrating LLM with their data warehouses (e.g Snowflake, Data cubes).

During the conference, investors emphasized that in the case of contextual data, the line between quantitative and qualitative data points is starting to merge. Although the participants agreed on this artificial intelligence (AI) and LLM are changing how investors use alternative data, most agreed that human intervention and oversight still matter.

The datasets offered by G2 Data Solutions include a wealth of unstructured text sourced directly from software buyers. Imagine having direct customer feedback – including pros, cons, reasons for change and use cases! This text and opinions on individual products and suppliers are suitable for analysis within any chosen LLM model.

Distributing alternative data may seem unwieldy

The explosion of alternative data sources has presented inventors with many opportunities, but also serious challenges. While the number of alternative data sources continues to grow exponentially, the sheer volume of data can be overwhelming and make it difficult to draw meaningful conclusions.

Moreover, alternative data sets almost always require cleaning and processing for investor applications. Investor data teams are busy preparing data just so it can be tested and used for analysis.

Ensuring the delivery of clean, processed data, ready for consumption is the foundation of our product. Data Solutions customers can gain direct access to our data source. Is your data team busy manually mapping and cleaning data from alternative data providers? Our proprietary dataset maps to 1.9k. tickers for listed companies!

Authentication and trust are paramount

Nowadays, when data is abundant, investors focus on ensuring the accuracy and reliability of this data. Investors rely on reliable data to make informed decisions, and any discrepancies can lead to significant financial consequences.

The need for reliable counterfactual data is critical to building robust predictive models, assessing market conditions, and making sound investment decisions.

Authentic reviews are the foundation of G2 and our team ensures that real and authentic reviews appear on the site. All reviews submitted to G2 are rigorously vetted moderation process before they are published. Investors can be sure that our data comes from trusted sources – real software buyers.

If you are a SaaS investor and want to learn more about how Data Solutions can help with your investment process, contact our team!