# The emerging sectoral diversity of startup ecosystems

## TL;DR

This paper investigates the sectoral diversity of startup ecosystems in Europe and the USA, using new visualization tools and ecological metrics, and models the diversity emergence with a funding-based preferential attachment model.

## Contribution

It introduces a novel visualization approach and ecological metrics for analyzing startup ecosystem diversity, and proposes a simple model explaining diversity growth based on funding patterns.

## Key findings

- Marked differences in sectoral diversity across ecosystems
- Diversity characterized using ecological metrics
- A funding-based preferential attachment model explains diversity emergence

## Abstract

Thanks to the recent availability of comprehensive and detailed online databases of startup companies, it has become possible to more directly investigate startup ecosystems i.e. startup populations in specific regions. In this paper, we analyze the emergence of 20+ such ecosystems in Europe and the USA, with a specific focus on their sectoral diversity. Analyzing the sectoral landscapes of these ecosystems using a new visualization tool indeed highlights marked differences in terms of diversity, which we characterize using metrics derived from ecological sciences. Numerical simulations suggest that the emerging diversity of startup ecosystems can be explained using a simple preferential attachment model based on sectoral funding.