European investors vs. US investors. Which one should I prefer in order to be successful?


I have met a couple of different views regarding growing CEE ventures to the next level on the global scene during my work. There are a couple of entrepreneurial hubs in Europe in the UK, Germany, Nordic countries, the Netherlands, Israel, etc. and there are also emerging startup countries like Estonia, and hopefully Hungary will be on that track by using the right means at the right time (just think about the available VC funds by the help of the Jeremie I and Jeremie II programs). The question could be raised? Is it the best way of going global by buying a ticket to SF and start organizing the meeting with top level VCs and angel investors?   Click continue for the findings!

I have just received a study from Rafael Weverbergh, the editor of Whiteboard Magazine  The the study was prepared by the London School of Economics and sponsored by British Venture Capital and Private Equity Association.

The study was written by by Dr. Ulf Axelson and Milan Martinovic (of the LSE) and compared the European Venture Capital scene with the US Venture Capital scene by the help of data coming from 35 798! funded companies. It was longitudinal research by starting the examination in 1980 and closing (temporarily) in 2011.

I will prepare an in-depth secondary analysis pretty soon that will be published on Whiteboard Magazine but till that let me phrase a few sentences as the initial summary of the report.

Both US and Europe have decreased significantly in terms of the probability of IPOs in the last decade.

  • There is no significant difference in the probability of trade sales exits
  • The time to IPO has gone up in both region.
  • Compared to the common beliefs there is NO significant difference between the success rates of deals of European and US deals from the same vintage year concerning the IPO exits
  • Europe has 8 percentage point lower probablity of trade sales exit compared to the US from the same aspect
  • There is no statistical proof of the higher stigma of failure in Europe contrary to the US
  • Finally the evidence: the more experienced the VC and the entrepreneur, the more probable the successful exit

You can read the original study here.

I would be glad to have a discussion on the given topic. Would be glad to have your opinion as startup entrepreneur, business angel or VC investor. Feel free to comment.

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