I came across this post the other day on startup funding and thought it was particularly interesting. The diagram itself is confusing as hell and I think that is why so many entrepreneurs get lost in startup funding land. The interesting thing is that the map is pretty accurate. Having been involved in a fair amount of startup funding myself it seems that many entrepreneurs don't understand what they are doing when they are getting into startup funding. Some want to learn, some don't.
The trick is that these people are focused on building their companies and the early stage investing community forces them to nearly abandon that mission and focus solely on the esoteric processes and networking that is startup investing. Paul Graham does us a little justice by outlining the current trends, but even these are changing and vary by industry, location, etc.
The one thing that I always think about in any investment (early stage, public market, real estate, etc.)... Is the path to success simple or complex. If it is complex, are there people or assets that make the complexity worth more? Think about the SnapChat valuation for example, is a network filled with people's eyeballs really that valuable? I don't have the data in front of me of how much every eyeball is worth, but I do know advertisers are willing to spend... this is why we have television, newspapers, etc. advertisements make consumption go around. So the question is are there enough eyeballs that advertisers can't reach in some other way that would warrant a high value and return to an investor?
If the founders can make the process easy for investors to understand they will make a lot of the things in this map below easier to navigate.