competitive-analysis

Competitive Analysis Taxonomy

Competitive analysis for an investment memo is built on two orthogonal axes:

1. Stage ring — concentric circles outward from the target company's own stage of development. The target sits at the center; competitors are placed on the ring that matches their stage, not the target's.
2. Competitor type — how structurally similar the competitor's offering, value proposition, and customer set are to the target's.

Every competitor named in a memo should be tagged on both axes.

Axis 1 — Stage Rings

The target company sits at the center. Competitors are sorted onto rings by their own funding stage / scale, not the target's. A seed-stage target with incumbents on its outer ring tells a very different story than a seed-stage target whose entire landscape is other seed-stage companies.

Ring	Definition
early stage	Pre-Seed, Seed, Series A
early scaleup	Series B, Series C
scaleup	Series D and beyond, prior to mezzanine
mezzanine	Pre-IPO rounds where valuation exceeds ~$2–3B
incumbents	Public companies, or massive PE-owned rollups

How to use the rings

• Place the target on its own ring first. Everything else gets classified relative to that center, but each competitor is named on the ring matching its own stage.
• A complete competitive picture spans multiple rings outward — being only compared against same-ring peers usually hides the real threat (noisewashing incumbents, or scaleups about to enter the segment).
• A target with no early stage competitors but many incumbents is in a different position than one surrounded by same-ring peers — both facts belong in the memo.

Axis 2 — Competitor Types

These four types describe the structural relationship between a competitor and the target. They are listed roughly inside-out by directness of threat.

direct

Offers essentially the same set of services/products, has essentially the same value proposition, and sells to essentially the same customer set.