What does it take for funders and startups to grow scaleups – and why should they? After years of in-depth research into the effectiveness of growth strategies, founder and investor mindsets, attitudes, knowledge and relationships, Startup Genome has been able to codify the factors that take startup ecosystems from good to great.

1. State of the Nation
JF Gauthier, Founder & CEO
July 12, 2018

2. © 2017
Startup Genome’s Mission
• Increase the success rate of startups globally
• Build well-resourced startup ecosystems
2

3. © 2017
The Largest Movement to Help Startups Succeed
• Started in 2011 with Steve Blank, Stanford University, and UC
Berkeley
• Financially supported by
– 35+ governments across 25 countries
– Kauffman Foundation
• Supported by
– 400 organizations (accelerators, incubators, etc.)
– Large data partners

4. © 2017
Silicon Valley
New York City
Los Angeles
Boston
Chicago
Seattle
Austin
Denver-Boulder
St. Louis
Houston
Atlanta
Tampa Bay
Phoenix
New Orleans
USA
Toronto
Vancouver
Montreal
Waterloo
Ottawa
Quebec City
Edmonton
Sydney
Melbourne
New Zealand
Johannesburg
Cape Town
Lagos
Bangalore
New Delhi
Mumbai
Beijing
Shanghai
Shenzhen
Seoul
Kuala Lumpur
Singapore
Sri Lanka
Taipei City
Tokyo
Hong Kong
Manila
Davao City
Cebu
London
Berlin
Tel Aviv
Stockholm
Paris
Moscow
Amsterdam
Munich
Buenos Aires
Mexico City
Santiago de Chile
Canada
Latin America
Europe
Africa
India
China
Southeast Asia
Pacific
Helsinki
Barcelona
Jerusalem
Frankfurt
Estonia
Turin
Malta
Lisbon
55 cities studied across 27 countries with support from 35
governments

5. © 2017
The Largest Dataset on Startups Ever Assembled
• Data from 100,000 founders across 26 countries
• Data from global partners: GEN, Crunchbase, Orb Intelligence
–and suppliers: Dealroom, Pitchbook
• Data from hundreds of startup-supporting organizations globally
5

6. New science explaining startup ecosystems
performance and the production of scaleups and exits
6
Founder
Talent
Organizations
Funding
Startup Experience
Resource Attraction
Team Local Ecosystem
RESOURCES
NETWORKS
(Knowledge Flow)
Local
Connectedness
Global
Connectedness
PERFORMANCE
Startup
Output
Global
Market Reach
Ecosystem
Value
EconomicImpact
Resource Recycling  Exits
Local
Context
See Science
articles in Free
2017 & 2018
reports

7. The Scaleup Situation
Where? Why? How?

8. MYTH: Scaleup production is about market access, laws, etc.
…and therefore a national issue
Number of Exits & Unicorns
0
100
200
300
400
500
600
700
Singapore Russia Israel France Canada Germany United
Kingdom
China United
States
#ofExitsandUnicorns
$50M+
Billion-Dollar Club*
2010-2017
* Unicorn Valuations + Billion-Dollar Exits 8

9. © 2017
Truth: Scaleup production varies widely by city within the U.S.
0
50
100
150
200
250
Houston Phoenix Atlanta Los
Angeles
Chicago Boston New York
City
Silicon
Valley
#ofExitsandUnicorns
$50M+
Billion-Dollar Club*
Number of Exits & Unicorns
2010-2017
* Unicorn Valuations + Billion-Dollar Exits 9
Same laws
Same access to market…

10. Myth: scaleups require large funding rounds
(…and we don’t have access to them here)
0%
5%
10%
15%
20%
25%
30%
35%
40%
Billion-Dollar Club* $100M+ Exits ALL Series A Rounds
%ofrounds>$10M
Large Series A by Scaleup Size vs. All Rounds
2010-2017
* Unicorn Valuations + Billion-Dollar Exits 10

11. Truth: large funding rounds are much more distributed than
scaleups
*affected by several factors: very different market and database penetration, and tech bubble
0%
5%
10%
15%
20%
Silicon
Valley
New York
City
London Berlin Tel Aviv Toronto United
States
United
Kingdom
Canada Germany China*
%ofrounds>$10M
Distribution of Large Series A Rounds by Ecosystem and Country
2010-2017
11

12. 0.0%
0.5%
1.0%
1.5%
2.0%
Toronto Vancouver Barcelona Amsterdam Berlin Tel Aviv London New York
City
Silicon
Valley
# of $50m Exits/Startup Output
$B Club/Startup Output
Scaleup DNA is HIGHLY rooted in ecosystems
i.e. COMMUNITY GIVES YOU SCALEUP POTENTIAL (& Vice
Versa)
Rate of $50M Exits and Billion-Dollar Club* (per startup)
IntegrationExpansionGlobalization
2010-2017
* Unicorn Valuations + Billion-Dollar Exits
Ecosystem
Phase:
12

13. Global Connectedness & Global Market Reach
Ecosystem Factors most closely related to scaleup production
13
Global Market Reach + Global Connectedness Score
vs. Exit Value – by Ecosystem

14. Global Connectedness = Ecosystem SCALEUP POTENTIAL
Required to develop globally-leading products
The Global Fabric of Knowledge, People and Organizations in Tech
Quality Relationships between Entrepreneurs
14

15. © 2017
Global Market Reach = realize an ecosystem’s scaleup potential
Market Proof towards Global Leadership
0%
10%
20%
30%
40%
50%
0 4 8 12 16
%OtherRegionCustomers
# Connections to Top EcosystemsGlobal Connectedness
(# of Entrepreneur Relationships in Top Ecosystems)
Early-StageGlobalMarketReach
(%ofOutofContinentCustomers)
Size of bubble indicates
ecosystem value
15

16. © 2017
Startups that go-global early see their revenue grow 2X faster
 deserve larger funding round  scaleup
16
B2B Startup Revenue Growth vs. Global Market Reach Linear Regression
lines based on
thousand of startups

17. 0
0.005
0.01
0.015
0.02
0.025
Berlin Amsterdam Tel Aviv Stockholm Los Angeles New York
City
London Silicon
Valley
RateperStartup
# of $50M Exits /Startup
Output
Why does Stockholm produce scaleups at such a high rate?
Number of Exits & Unicorns
Billion-Dollar
Club way above
others
Stockholm
17

18. Despite being very small, Stockholm startups show high
Global Connectedness and Global Market Reach
0%
10%
20%
30%
40%
0
4
8
12
16
Stockholm Barcelona Vancouver New York London Silicon Valley
OutofContinentCustomers
GlobalConnectedness-Top
Ecosystems
Output: 700-1,100 Output: 4,500 – 14,000
Output: 773
Global Connectedness vs. Global Market Reach
Stockholm
18

19. © 2017
This is where the main Canadian ecosystems are
0%
10%
20%
30%
40%
50%
0 4 8 12 16
%OtherRegionCustomers
# Connections to Top EcosystemsGlobal Connectedness
(# of Entrepreneur Relationships in Top Ecosystems)
Early-StageGlobalMarketReach
(%ofOutofContinentCustomers)
Size of bubble indicates
ecosystem value
19
Montréal
Vancouver
Toronto-Waterloo

20. Local Connectedness: also a core part of Scaleup DNA
20
Founder
Talent
Organizations
Funding
Startup Experience
Resource Attraction
Team Local Ecosystem
RESOURCES NETWORKS
(Knowledge Flow)
Local
Connectedness
Global
Connectedness
PERFORMANCE
Startup
Output
Global
Market Reach
Ecosystem
Value
EconomicImpact
Resource Recycling  Exits
Local
Context

21. © 2017
Startups with higher Local Connectedness grow faster
 Larger Funding Rounds, Scaleup
0.0
0.2
0.4
0.6
0.8
1.0
1 2 3 4 5
QuarterlyRevenue($M)
Age of Startup (In years)
Quarterly Revenue vs Age of Startup
>2x revenue
growth for startups
with high Local
Connectedness vs.
those with low Local
Connectedness
High Local Connectedness
Medium Local Connectedness
Low Local Connectedness
21

22. © 2017
Local Connectedness: Relationships and Sense of Community
Sense of Community Index Relationship Index Collision Index
0
1
2
3
4
5
6
7
0
5
10
15
20
25
30
0
1
2
3
4
5
6
7
8
9
22
Global Average
Global Average
Global Average

23. © 2017
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
Helping Each Other Intro to Customers & Investors
Founder-to-Founder Support
Sense of Community: Helping each other
Sense of Community
Investors Informally Helping Founders
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
23
Global Average Global Average
Global Average
Silicon Valley =
5.6

24. © 2018
What does it mean for you?
Scaleup DNA = Develop Local & Global Community and activate it by
Going Global
1) Develop a tight community locally
–First help fellow founders
–…then ask for help
2) Invest in becoming part of the Global Startup Community
3) Go-Global immediately – don’t prioritize your own country
– (it doesn’t mean to exclude it but <50% of your efforts)