3. FINDINGS This section presents the findings from our analysis. Some of the core data which supports the analysis is included in the Appendix. 3.1. Canada has lower funding Success Rates To begin, we first examine funding success rates over time. As the chart below illustrates, and as is well known to investors, for a given population of startups (which we term ‘Startup Output’), only a small proportion of firms will raise seed funding, a smaller proportion of those will raise series A, and a yet-smaller proportion of those will raise series B, etc. We term this process the ‘attrition funnel’, and in Startup Genome’s experience, the shape of this ‘funnel’ reveals information about the maturity of an ecosystem, with more mature ecosystems having higher success-rates from one stage of funding to the next. Conversely, smaller and less mature ecosystems have lower success rates, and thus their funnels ‘narrow’ more quickly. This is well-illustrated in the chart below, which shows the funnel for US Tier 1 ecosystems at the top, narrowing least quickly, followed by the aggregate US Tier 2, then Canadian Tier 1 and finally Canadian Tier 2 ecosystems:
Figure 1: Comparison of Attrition Rates
Note: Canada Tier 2 omits Ottawa
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