500 Startups' Amit Bhatti talks alternative data and dealmaking
A law degree from the University of Virginia is often an entree to a Wall Street general counsel gig, or to a white-shoe firm - but for Amit Bhatti, it was the beginning of a life in startups.
"I was very intentional about wanting to work in venture capital once I was I lawyer," he said after attending Thinknum Alternative Data's EXDC Conference this month in midtown Manhattan. Before joining 500 Startups, Bhatti worked with pre-IPO and tech companies at Wilson Sonsini Goodrich & Rosati. Today, he's a principal with 500 Startups in San Francisco.
At 500 Startups, Bhatti started out in 2017 focusing on the legal side of the investor's deals in North America and South America. 500 Startups' reach has expanded to cover more than 75 countries globally.
"There is not an area we haven't invested in - or, at least explored," Bhatti said. "We're very industry agnostic."
And - to the agreement of his other EXDC panelists - Bhatti and other private investors are increasingly committing more resources to alternative data before a deal is done. For early- to mid-stage deals, venture investors, in particular, have an opportunity to track alternative data signals that can complement (or, disprove) an entrepreneur's pitch deck.
"We use the data to validate," Bhatti said. "There's a lot more attention paid toward market sizing that actually makes sense - and making comps to larger sized, private companies"
More than deal sourcing, Bhatti said investors can already use things like aggregated product reviews to get a sense of how well (or, if) a startup is being embraced by core users. And, he adds, it's going to become an increasingly big part of decision-making in the venture capital community.
"There are VCs that think they're above that," Bhatti said at EXDC. "I think that kind of practice is slowly going to turn into a more data-driven one."