tl:dr? go here for visualization: http://www.graf.ly/user_graphs/85
Who Trusts Your Investor With Their Livelihood?
Imagine if you could meet a job applicant's spouse during the interview process. Of course professional references are great - but spending 5 minutes with the spouse, the person who entrusts your applicant with their livelihood, might be even better.
Apply the analogy to investors. Of course you can call up other companies your investor has worked with. But it's also helpful to know which other investors will put money in with your investor. Is it consistently the same people? Is it a random network?
Turns out we can examine co-investment with cold, hard data.
Explore Co-Investment Data
Graf.ly lets you quickly create interactive visualizations from spreadsheets. If you plug in the Crunchbase January data export and pivot by investment round, you can build a network graph showing which investors typically pair up with other investors on rounds. Incubators too.
Here's a graph showing stronger relationships only - investors that have paired up on 10+ investments:
http://www.graf.ly/user_graphs/85
Does This Mean Something For Chicago?
Turns out most of our Chicago investors haven't paired up other investors for 10+ rounds. That tells me either:
- Crunchbase doesn't have all the data (possible)
- Chicago investors don't yet have the quantity of rounds to meet that threshold, arbitrarily set by me (very possible)
- Or Chicago investors don't have the established relationships with other investors.
If the latter, we could have another partial explanation for some of our Series B crunch.
However, when you look at the 3+ round co-investment graph you'll see most of our Chicago investors. For instance, search Lightbank to see they've done 3+ rounds with SV Angel and 500 startups to name a few. So maybe that means we're on our way...
Either way, check out the visualization (and underlying data) for yourself, share your thoughts, and do your research!
