Venture capital: Market observations using social media sentiment analyses

Private markets such as the VC market are characterised by the fact that they are relatively illiquid, so that external influences are slow to be reflected in observable market variables such as valuations and transaction volume. Furthermore, relevant information is publicly known in private markets to a limited extent only. Both of these factors hamper the real-time observation of market movements. Given that many market players actively communicate in social media, these constitute an interesting alternative source of information.

In order to examine the potential of social media posts for nowcasting global venture capital market sentiment, we have generated sentiment indicators using KI-based natural language processing methods. The findings suggest that the sentiment indicator thus developed allows changes resulting from market-moving events to be tracked and assessed with a high degree of timeliness.

Venture capital: Market observations using social media sentiment analyses(PDF, 549 KB, accessible)

Further publications on Venture Capital