Are We Evaluating Our Ecosystems? Or Just Counting Money?

I realize the word ecosystem gets used frequently in conversations about startups, innovation, and economic development, but it is the level at which I spend most of my time operating.

By default, my role is a connector. I often describe it as being a quarterback, traffic director, or matchmaker within the ecosystem. About half of my time is spent working directly with business owners, and the other half is spent working with ESOs, or entrepreneur support organizations, which is essentially a dressed up way of saying resources.

In an ideal environment, every founder’s need has a clear match. If someone wants to explore venture capital, I will make an introduction, and the need is met. Someone else needs help with marketing or customer discovery, I connect them with a program or resource that specializes in that area. When the ecosystem is functioning well, it becomes a well oiled machine where the right people are meeting the right resources at the right time.

But that is not always what happens.

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The Voids Founders Run Into

One of the patterns that becomes clear in this role is how often founders are searching for resources that exist, but are not fully built out or strong enough to meet their needs.

Part of being a strong founder is developing the resourcefulness to find solutions when the path forward is unclear. That has always been part of the job. However, when the same types of requests appear repeatedly and there is still no clear resource available, a pattern begins to emerge.

Those patterns reveal the voids within the ecosystem.

For example, founders might consistently struggle to find mentorship within a particular industry, access deeper technical knowledge, or locate programs that go beyond introductory material and actually help them apply what they are learning. When those gaps show up again and again, they should not simply be accepted as the cost of doing business. Instead, they should signal that something within the ecosystem deserves closer evaluation.

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Who Is Evaluating the Ecosystem?

This raises an important question. Who is responsible for evaluating the health of an entrepreneurial ecosystem in the first place?

In my opinion, that responsibility should largely fall on government leadership at the state, county, and city levels. It is in their best interest to cultivate an economy that is robust enough for both businesses and consumers.

At the same time, strong stakeholders across the ecosystem understand that supporting the local entrepreneurial environment benefits everyone involved. Universities, accelerators, investors, and community organizations all have a role to play. In reality, this kind of effort requires collaboration across many different groups.

The problem is that I am not sure anyone is currently conducting that evaluation in a holistic way.

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The Default Metric: Capital

Instead, the discussion often defaults to one primary measurement of ecosystem success, and that measurement is capital.

Conversations frequently revolve around how many venture funds exist in a region, how much capital is available for startups, and how many grants are being distributed to new businesses. Capital is clearly important and will always be a critical component of any entrepreneurial environment. It is the lifeblood that allows many companies to start and grow.

Over time, however, capital has become the dominant proxy for ecosystem health.

Particularly in the Midwest, the most common refrain is that the ecosystem simply needs more money. More venture funds, more lenders, and more grant programs. As a result, the success of an ecosystem often ends up being presented almost entirely as a reflection of the amount of capital available.

While access to capital certainly matters, measuring ecosystem strength through that single lens creates a significant blind spot. It overlooks the other resources and conditions that allow founders to build strong companies in the first place.

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The Chicken and Egg Problem

The situation resembles a classic chicken and egg problem.

Many people argue that ecosystems struggle because there is not enough capital available locally. Without venture funds or large pools of investment, founders are forced to look elsewhere for funding, which can slow the development of the ecosystem.

At the same time, investors often see the problem from the opposite direction. Capital tends to flow toward places where strong companies, experienced founders, and deep support networks already exist. In other words, the environment often needs to mature before significant capital begins to appear.

Both perspectives contain some truth, which is what makes the problem difficult to resolve. Does capital create stronger ecosystems, or do stronger ecosystems attract capital?

Personally, I tend to lean toward the second explanation. If everything else remained constant and a large pool of money suddenly appeared in an environment that lacks mentorship, training programs, innovation spaces, and strong networks, it is difficult to imagine that capital alone would transform the outcome.

On the other hand, when founders are surrounded by people who have already built companies, mentors who understand the challenges of scaling businesses, research institutions that support innovation, and networks that provide exposure and connections, they are far more likely to succeed even if the available capital pool is smaller.

Seen through that lens, capital often follows strong ecosystems rather than serving as the starting point for them.

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What a Real Ecosystem Scorecard Might Look Like

If ecosystems are going to be evaluated meaningfully, capital should certainly remain part of the conversation, but it should not be the only category considered.

There are other resource pools that deserve just as much attention.

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Access to People Who Have Done It Before

There is no substitute for experiential knowledge.

Someone who has started, operated, and sold a coffee shop can provide far more practical value to aspiring coffee shop owners than handing several people thirty thousand dollars each and hoping they figure things out on their own

The capital that feels incredibly difficult to raise can easily become wasted if it is deployed toward the wrong priorities. A person who has been through the process before can help founders avoid many of those mistakes.

These relationships can take many forms, including one on one advising, accelerator programs, mentorship networks, and industry specific communities. In my view, ecosystems should spend more effort identifying and engaging these experienced operators than they spend chasing new pools of funding.

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Depth of Knowledge

Another resource pool that deserves closer attention is the depth of knowledge available to founders and the opportunities they have to apply that knowledge.

Artificial intelligence offers a useful example. Across many ecosystems there has been a noticeable increase in workshops and events focused on AI. While these programs are helpful introductions, most of them remain at a very basic level.

Founders are often shown how to prompt a tool or given a high level overview of the technology, but what many of them actually need is the opportunity to go far deeper. They need guidance on how to apply these tools to build websites, improve outreach efforts, analyze internal operations, and streamline the way their businesses function.

This same pattern appears in other areas where founders frequently struggle, including digital marketing, sales outreach, government procurement, and operational systems. While founders should absolutely develop the ability to learn independently, the ecosystem should make it easier for them to gain meaningful depth in these areas rather than stopping at introductory material.

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Visibility and Connectivity

Visibility and connectivity are also critical elements of a healthy ecosystem.

When I start a puzzle, the first thing I do is flip over all the pieces so that I can see what I am working with. Then I separate the edges and begin grouping pieces by color or pattern. Understanding the pieces available is essential before the picture can come together.

At times the entrepreneurial ecosystem feels more like reaching into a box of jumbled puzzle pieces and hoping something happens to fit.

Founders need exposure, and the ecosystem needs transparency around how resources connect with one another. When people can clearly see what programs, mentors, and organizations exist, they are far better positioned to navigate the system and contribute to it.

Many founders are naturally stubborn and reluctant to ask for help directly. At the very least, however, they should be able to see where they fit into the broader ecosystem and where they might collaborate with others.

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Looking at the Bigger Picture

There are many other categories that could be considered when evaluating ecosystem health, but the broader point remains the same.

The strength of an entrepreneurial ecosystem cannot be measured solely by the amount of capital available within it.

Until we begin evaluating ecosystems through a wider lens, we will likely continue having the same conversations and wondering why progress often feels slower than expected.

Everyone involved in their local ecosystem already has a full plate, and I recognize that reality. Even so, it is worth remembering that ecosystems are ultimately built by the people who participate in them. Each of us represents a piece of the puzzle, and strengthening the system often begins with recognizing where the gaps exist and doing what we can to help fill them.

‍The views expressed in this article are my own and do not necessarily reflect the views of my employer.

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‍Sebastian Penix is the Entrepreneur Ecosystem Navigator for the Central Indiana SBDC, based at Butler University’s Lacy School of Business. He is also the founder of Heartland Valley, a platform spotlighting startups and innovation across the Midwest. His work focuses on building connection, visibility, and momentum within the region’s entrepreneurial ecosystem.