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Everything about European startups is against them. Europe is so risk averse it's a joke. They (VCs and therefore startups) are under capitalized compared to US

by pclark 16y ago

Everything about European startups is against them. Europe is so risk averse it's a joke. They (VCs and therefore startups) are under capitalized compared to US startups and have to try so much harder to get visibility of the "big 5" acquirers. VCs almost always favour revenue over customer growth. Flipboard, Quora raised $10M. You think they could have done that based in the UK? No. You think Twitter could have raised $200M from European investors? Not only is there not that kind of capital around, no one would go near it due to the lack of revenues. I think a lot of this stuff goes back to two things: serial entrepreneurs becoming cautious angel investors rather than aspiring to build something huge and the lack of large LP (eg: Harvard) that tip money into VC. What are some noteworthy - big - startups? Skype. Spotify. Who else?

hcho 16y ago
Last.fm? There are some folks who suggest that raising money can actually be bad for some start ups. Ramen profatibility and all that...So, in this day and age of cheap infrastructure lack of VC money shouldn't really be a huge problem.It's more of a culture thing.
- pclark 16y ago
  You don't get big without VC - you're right about culture though.
  - samwillis 16y ago
    I agree that to get big in the way google/facebook/twitter are needs VC but I think you can be very successful without. I beleve one big difference over here is that the startups aren't aiming to be the next facebook, they want to be successful enough for the founders and angels to make a particulaly comfortable living from it.
  - gloob 16y ago
    You don't get big without VC Perhaps I'm just jaded or out of touch, but I'm pretty sure something like Flipboard wouldn't get Google-big even if they were given 100 million dollars rather than 10. Huge investments might be necessary to become gigantic, but they certainly aren't sufficient, nor are they necessary to create an actually viable business.
axod 16y ago
BS. There are tons of European startups. But the have 'revenue' and 'profits'. Which means no one bothers reporting on them. Don't you think $10M for some strange social news reader app seems a little over the top? or $200M for twitter? They're insane investmensts. The only reason SV investors invest is in the hope that someone even more drugged up on SV koolaid will buy the company. Bubbles upon bubbles. It's unsustainable. I'm really happy that we're more risk averse in Europe. Get real. Get revenue and good solid business models.
- dododo 16y ago
  can you name these european tech start ups? i can think of very few.
  - Silhouette 16y ago
    I'm in Cambridge, UK. The alumni from the university's Computer Lab have started hundreds of businesses in recent years, many off the back of their academic research, and that is only the ones who have notified the alumni organisation about what they're doing. There are multiple business parks around the city focussed heavily on small business and in at least one case focussing almost entirely on start-ups. This is just in one city and talking about one department of one university. Of course you haven't heard of most of these start-ups. They probably operate in specialist fields that are of no personal or professional interest to you. So do most businesses in the world, start-up or otherwise. But many of these organisations grow into successful businesses, often without taking much if any external funding. I don't know what it is about HN recently, but it seems like some people believe your business is only a success if it becomes the next MicroGoogleApple with a multi-billion exit for the founders, and the only path to doing that is getting lots of rounds of increasingly silly money from angels/VCs and then selling out to a major corporation for what we seem to be calling "FU money" these days. The ideal way to do this is apparently believed to be starting a Internet-based, mass-market company providing a trivial service and running it on a web site with a silly name formed by taking a normal word and adding the ending "ly". In other news, hardly any companies will ever pull off this combination (I can count exactly none so far), while there are countless tech companies working on all kinds of applications that make plenty of profit by actually doing something useful in a certain market, which would probably provide an eight or nine figure exit for their founders if they chose to leave. These don't necessarily hit the headlines, because not everyone cares about specialist software or services, and not every founder wants to run up a company to a paper value of billions in two years and then exit making a good deal for their VCs.
ig1 16y ago
IMDB, Gumtree, Playfish, Betfair, pkr.com, justeat, etc.

by pclark 16y ago

hcho 16y ago

Last.fm? There are some folks who suggest that raising money can actually be bad for some start ups. Ramen profatibility and all that...So, in this day and age of cheap infrastructure lack of VC money shouldn't really be a huge problem.It's more of a culture thing.

pclark 16y ago
You don't get big without VC - you're right about culture though.
- samwillis 16y ago
  I agree that to get big in the way google/facebook/twitter are needs VC but I think you can be very successful without. I beleve one big difference over here is that the startups aren't aiming to be the next facebook, they want to be successful enough for the founders and angels to make a particulaly comfortable living from it.
- gloob 16y ago
  You don't get big without VC Perhaps I'm just jaded or out of touch, but I'm pretty sure something like Flipboard wouldn't get Google-big even if they were given 100 million dollars rather than 10. Huge investments might be necessary to become gigantic, but they certainly aren't sufficient, nor are they necessary to create an actually viable business.

axod 16y ago

BS. There are tons of European startups. But the have 'revenue' and 'profits'. Which means no one bothers reporting on them. Don't you think $10M for some strange social news reader app seems a little over the top? or $200M for twitter? They're insane investmensts. The only reason SV investors invest is in the hope that someone even more drugged up on SV koolaid will buy the company. Bubbles upon bubbles. It's unsustainable. I'm really happy that we're more risk averse in Europe. Get real. Get revenue and good solid business models.

dododo 16y ago
can you name these european tech start ups? i can think of very few.
- Silhouette 16y ago
  I'm in Cambridge, UK. The alumni from the university's Computer Lab have started hundreds of businesses in recent years, many off the back of their academic research, and that is only the ones who have notified the alumni organisation about what they're doing. There are multiple business parks around the city focussed heavily on small business and in at least one case focussing almost entirely on start-ups. This is just in one city and talking about one department of one university. Of course you haven't heard of most of these start-ups. They probably operate in specialist fields that are of no personal or professional interest to you. So do most businesses in the world, start-up or otherwise. But many of these organisations grow into successful businesses, often without taking much if any external funding. I don't know what it is about HN recently, but it seems like some people believe your business is only a success if it becomes the next MicroGoogleApple with a multi-billion exit for the founders, and the only path to doing that is getting lots of rounds of increasingly silly money from angels/VCs and then selling out to a major corporation for what we seem to be calling "FU money" these days. The ideal way to do this is apparently believed to be starting a Internet-based, mass-market company providing a trivial service and running it on a web site with a silly name formed by taking a normal word and adding the ending "ly". In other news, hardly any companies will ever pull off this combination (I can count exactly none so far), while there are countless tech companies working on all kinds of applications that make plenty of profit by actually doing something useful in a certain market, which would probably provide an eight or nine figure exit for their founders if they chose to leave. These don't necessarily hit the headlines, because not everyone cares about specialist software or services, and not every founder wants to run up a company to a paper value of billions in two years and then exit making a good deal for their VCs.

ig1 16y ago

IMDB, Gumtree, Playfish, Betfair, pkr.com, justeat, etc.