Chapter 5The Startup Ecosystem
Silicon Valley is in this never-ending circle. A never-ending circle of this is where our best engineers are. Why? Because that's where companies get started. Why? Because that's where venture capitalists live and they provide funding for those companies. Why are they here? Because the greatest engineers are here. Why? Greatest engineers are here because the companies are here. It's this never-ending Circle of Life in Silicon Valley.
–Jan Koum, co-founder and former CEO of WhatsApp 1
While Koum's comments are specific to Silicon Valley, he makes an important point about the startup ecosystem overall. It functions because thousands of businesses and service providers are intertwined and interdependent to make the whole greater than the sum of its parts. Even though companies are highly competitive and there are plenty of healthy egos in every corner of the ecosystem, these entities recognize the importance of not only their own role in the ecosystem but those of other members.
Understanding the key components of the ecosystem from a formation and funding perspective will be critical to your success. The more you know, the better equipped you will be to make good choices around how you use your money at all stages.
Key components of the ecosystem include sources of money (everyone from angels and venture capitalists to venture debt lenders and banks), incubators and accelerators that discover, fund, and nurture nascent talent and businesses, academic ...
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