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European Tech Startups Looking to California for Investment Needs
Published on Dec 10, 2010
Read our article, 'European Tech Startups Looking to California for Investment Needs' at 'Time to Start Up,' the small business blog by BizFilings.
European entrepreneurs forming a company are increasingly finding it difficult to accrue mid-level funding from venture capitalists and investors and are instead looking to the U.S. for their financing, particularly toward the world's renowned supporter of tech and web entrepreneurship: California.
According to the European Private Equity and Venture Capital Association and Dow Jones VentureSource, a significant gap has emerged between the amount of later stage deals signed in Europe compared to the amount signed in the U.S.
"I think that a lot of entrepreneurs in Europe sell out too early," Davor Hebel, principal of Fidelity Growth Partners, told the Wall Street Journal. "And we, as venture capitalists, are partly guilty of that as well because maybe we don't encourage them to really go for that billion dollar exit, which is really what this business is about, building billion dollar companies."
Earlier this year, FGP began a $160 million investment initiative dedicated to emerging European tech startups, according to the Journal.
However, Hebel asserted that the difference in tech investment trends is not so much cultural as it is an inherent age gap between the two markets. Over the past several decades, U.S. venture capitalists have learned - through the success of the tech boom's most prominent enterprises - to be more patient with returns on investment.