You may have heard recently that Startup Compass, which manages the “Startup Genome” project, released its findings about the worldwide startup ecosystem.

The full report is 125 pages in PDF format and uses Silicon Valley as the benchmark against which all other communities are measured.  Fair enough, there has to be some standard.  They measured 20 startup “ecosystems” and I have to say I was surprised that only 2 — Sao Paulo and Santiago de Chile — made the top 20.  Sao Paulo made it to lucky number 13 and Santiago was number 20 out of 20.

Here are a few bits and pieces from the report about the two cities that I thought were interesting:

Sao Paulo

Everyone knows that startups in LatAm are chronically underfunded, but this is the first time I’ve seen anyone put a number to that statement.  The study showed,  ”São Paulo has a significant funding gap. Before and after product/market fit São Paulo startups raise 86% less capital than SV startups.”

Interestingly, compared to Silicon Valley, startups in Sao Paulo were interested in different revenue models.

“São Paulo startups use significantly different revenue streams to monetize than SV startups. Compared to SV, São Paulo startups focus 26% less on subscription models, half as much on advertising, and 30% more on transaction fees, and 2.2x more on license fees.”

And while it’s widely acknowledged that startups in Brazil have lots of bureaucracy to deal with, the study pointed out that the funding issue, too, may be rooted in complicated legalities, with this quote from an entrepreneur:

“The entrepreneurial buzz in São Paulo makes it easy for someone to establish a good business network in a couple of weeks.  Our major problem here was structural: it is quite complicated to structure an investment based on options or convertible notes  based on the Brazilian legal system.”

Augusto Camargo, co-founder, aaTag

Santiago de Chile

Again, the study noted a capital shortfall.  ”There is an overall funding gap in Santiago. 96% less funding is raised by Santiago startups than SV startups.”

Interestingly, the report hinted that Startup Chile itself might be inhibiting the venture capital industry in Chile (though I find it hard to believe that there is no VC at all):

“Santiago relies highly on accelerators and incubators, and much less on angels, and super angels, with no capital from VCs at all.”