Most European VCs too shy for homeruns
RealDeals this week publishes some interesting data courtesy of TLCom and VentureSource that puts numbers against what we already knew: European VCs don’t swing for the fences and hence keep producing exits but of insufficient magnitude.
A total of 43% of all venture-backed exits to achieve more than 5X were based in Europe or Israel. However, only 27% of companies sold for more than $100m came from these regions.
I would love to know how much the “Israel skew” is as I am sure including Israel is flattering to the results. The explanation provided by Maurizio Caio is that “all but a handful of firms need to invest more capital and take bigger risks to close the gap with the US”.
Whilst the data is too limited to be conclusive, most of us know that to be true. Success is really not about building the best security company in the Southeast of [England][France][insert region]; you need to believe you can build global winners to ever have a shot. And unsurprisingly the players that have shaken the market in the last 5 years, Index excepted, tend to be new entrants from the US.