4 Themes Top of Mind for Software Investors

While investors have long leveraged traditional data sources – financial statements, earnings reports, and economic indicators – they have increasingly layered on alternative data.

The use of this alternative data enables investors to better understand market trends, customer sentiment, and buying behaviors. Examples of alternative data include credit card data, social media content, satellite data, and data from G2’s software marketplace – such as customer review sentiment, buyer intent traffic, time to ROI, and much more. 

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

Last month, our Data Solutions team attended two investor-focused events: Eagle Alpha’s Alternative Data Conference in London and BattleFin Discovery Day in NYC.   

At those events, we enjoyed meeting investors and hearing more about what’s top of mind for our customers. Here’s what stood out to our team: 

Sentiment’s time to shine 

There was a strong emphasis on the importance of investors leveraging alternative data sources for sentiment analysis to better understand customer preferences and behaviors.

Through text analytics, investors can identify signals through a plethora of contextual data sources, including social media, online forums, video, and the news. Investors are quantifying sentiment and integrating it with other structured datasets to capture market sentiment.

G2 Data Solutions captures the voice of enterprise software buyers through 2.6M+  authentic, verified reviews. Software buyers complete surveys, which translate to 48 different data points across 160,000+ products and services and 130,000+ software vendors globally.

This unique dataset includes data supporting user sentiment, observing buyer-behavior patterns, changes in pricing, how a vendor compares against its competitors, and switch-to-from analyses.

LLMs are revving their engine

Over the past few years, Large Language Models (LLMs) have advanced significantly, offering new capabilities in data processing, summarization, and predictive modeling.

These models can handle vast amounts of unstructured data, providing deeper insights in a matter of seconds. Increasingly, investors are integrating LLMs into their data warehouses  (e.g. Snowflake, Databricks).

During the conferences, investors highlighted that the line between quantitative and qualitative data points is starting to merge for contextual data. While attendees agreed that artificial intelligence (AI) and LLMs are changing how alternative data is leveraged for investors, most agreed there’s still a strong importance of human intervention and oversight. 

The datasets offered by G2 Data Solutions include a wealth of unstructured text sourced directly from software buyers. Imagine tapping into direct feedback from customers — including pros, cons, reasons for switching, and use cases! This text and feedback on individual products and vendors is ripe for analyzing through any LLM model you choose.

Proliferation of alternative data can feel unwieldy 

The explosion of alternative data sources has presented inventors with many opportunities, but also significant challenges. While the number of alternative data sources continues to rise exponentially, the sheer volume can be overwhelming, making it difficult to extract meaningful insights.

Furthermore, alternative datasets almost always need to be cleaned and processed for investor use cases. Investors’ data teams are bogged down with preparing data just so that it can be tested and used for analysis. 

Ensuring the delivery of clean processed data that’s ready for ingestion is core to our product. Data Solutions customers can get direct access to our data feed. Is your data team bogged down by manual mapping and data cleansing from alternative data vendors? Our proprietary dataset includes a mapping to 1.9k tickers for publicly traded companies!

Authentication and trust are paramount 

In today’s era, where data is abundant, investors are laser-focused on ensuring the accuracy and reliability of that data. Investors rely on trustworthy data to make informed decisions, and any discrepancies can lead to significant financial consequences.

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

Authentic reviews are core to G2, and our team ensures that real and authentic reviews appear on the site. All reviews submitted to G2 are screened through a rigorous moderation process before they are published. Investors can rest assured that our data is sourced from trusted sources – real software buyers. 

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

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