A few months ago I outlined a report card that could be used to assess a startup ecosystem’s progress. It broke up a startup ecosystem in to five categories; funding, talent, direct needs (infrastructure), environmental essentials, environmental factors. Needless to say the largest factor is funding, representing 45% of the total grade. At the time I only listed three ways of grading funding:
I’ve been thinking for a while that these three are no longer adequate to represent the world of startup funding. I have been brainstorming a better way of dividing up the last segment to represent everything except the most traditional of Angel investments. Well fortunately, this brainstorming is no longer necessary. Chris Dixon has taken care of that for me with his post on the segmentation of the venture industry. I suggest you read the post because it has some great thoughts on why this has happened. In this post, I’m more interested in what the categories are. He lays them out this way:
With this in mind, I’m breaking out my #3 to reflect Chris’ divisions. This leaves us with the following ways of evaluating an ecosystem’s ability to fund startups.
Note: Eventhough there has also been a lot of change in the angel investment category (with the expansion of Angel Funds and VCs offering Seed money), I still believe that looking at quality and quantity of angel money in an ecosystem is acceptable for evaluating it.