8 ms·
Europe’s old money mingles with tech startups
- notlukesky 7y agoIt seems that the old money has finally got the angel investing bug. It will become a flood if the returns are there or shrivel up if not.
- ChuckNorris89 7y agoDepends. I know wealthy Europeans with inherited wealth and most of them are putting it into real estate.
- notlukesky 7y agoI completely agree with that. The article refers to a trickle so far of interest. It was non-existent over a decade ago. If they get good returns that is and brag about it, then it might be a “flood”.
- corporateslave5 7y agoCalifornia beach real estate is about as safe as it gets.
- SkyMarshal 7y agoJust not so close to the beach that it will get flooded when the glaciers melt.
- Scoundreller 7y agoOr tsunami strike.
- hef19898 7y agoI had a couple of discussions concerning that topic lately. And the main driver behind a lit of investments seems to be the low, or in some cases even negative, interest rates. So everyone with enough money in the bank is looking for investment opportunities raking in more than 1% of returns. Which kind of lowers the bar for investment on general, also startups loom a lot less risky than they used to.
- rolltiide 7y agoYeah you can pretty much forget about wealthy Europeans doing anything at the speed of any business cycle. They are scared oldest sons managing a family office who have no idea what they are doing aside from breathing and making a baby in wedlock. These people will put down $1 million dollar deposit to make it seem like they are serious about completing a deal, and will just let the timeline expire forfeiting the entire deposit! Forget about the negative interest rates. Unless you can tap into the high yield corporate debt market, then dealing with these rich people is hopeless. Source: Been around a lot of wealthy Europeans that talked a big game. It is the most ridiculous stable business climate on Earth. I do not recommend, especially for tech.
- bawolff 7y agoI don't know anything about that world... But honestly that sounds reasonable to me. Old money wants to keep their money, so they are risk averse. New money is in the process of making their fortune so they are more interested in betting big.
- rolltiide 7y agoYes that is precisely what is going on, but they know they want to get out of real estate and yachts and public equities, and want to feel close to the action. Scared money doesnt make money.
- wuschel 7y agoHey, got some experience there, too. Would you be up for a short call? My contact is my profile.
- neonate 7y agohttps://archive.md/JITqe https://archive.md/JITqe
- TazeTSchnitzel 7y ago> Europe has a higher proportion of fortunes controlled by heirs, not innovators, than do the U.S. or Asia I wonder what they consider to be heirs? The difference can be just one generation.
- hef19898 7y agoIt even gets murkier when you consider people like Susanne Klatten, one of the heirs of BMW. Definitely a heiress, but then she did pretty well with what she inherited. So, entrepreneur or heir? Or both?
- Scoundreller 7y agoMaybe there’s more than the English Wikipedia article about her, but it doesn’t show much more than continuing existing stakes.
- bryanrasmussen 7y agoI wonder what they mean by innovators.
- djwhsbxh 7y agoPeople who make industry and society shifting products. Getting bought out by someone who takes your service to scale isn't the same.
- seemslegit 7y agoUnfortunately they tend to bring old-money sensibilities along with them, meaningful employee equity is rare even at executive levels in European startups.
- burrows 7y agoWhy is this unfortunate? If good execs prefer equity, they’ll go to where the equity is. And because they’re good, their companies will perform better, which creates a virtuous cycle.
- wjn0 7y agoGood for execs, bad for Europe (is perhaps what the grandparent comment meant)?
- Barrin92 7y agoemployee equity in particular in startups isn't really as unambiguous as the term suggests. Given how many startups die out you may as well interpret it as a creative way for company owners to shift risk on employees. After all, the failing startup is the norm, by a huge margin. And one step further these days it looks like going public is then the next step to load risk off from employees and founders onto retail investors. to be honest I'm not really too sad that this culture hasn't really taken hold over here. Most 'old money' in Europe isn't old billionaire heirs anyway but the small and middle-sized business who treat their employees quite well, employ them for decades, don't lay them off at the first sign of trouble and so on. If tech in Europe is looking for a business culture I don't mind them going to the old money and family business in the German South rather than Silicon Valley.
- seemslegit 7y agoEquity should not be in lieu of competitive salary, its purpose should be to align the employee with the company's success in the long run. > to be honest I'm not really too sad that this culture hasn't really taken hold over here. Most 'old money' in Europe isn't old billionaire heirs anyway but the small and middle-sized business who treat their employees quite well, employ them for decades, don't lay them off at the first sign of trouble and so on. That is increasingly less true for new businesses (although still less arbitrary than the US, although-although some would argue this is a form of agility necessary for startups) and was never due to the kind nature of business owners but due to post-ww2 tradition of worker-friendly politics and regulation backed by strong unions. The "old money" investors do not directly manage the startups any more than silicon valley VCs do theirs.
- deleted 7y ago[deleted]
- dehrmann 7y agoI feel like there's been more dumb money going to tech, lately. Some PE, pensions, Saudi via Softbank's Vision Fund. Now add Europe's old money.
- fnord77 7y agohave a feeling grifters are going to take advantage of this
- ThePhysicist 7y agoI think it's really positive that these companies / networks open themselves for startups, still it would be better if they would try to change their companies so that all startups have a fair chance to work with them. This would be beneficial to them as they would have a larger sample to choose partners from. Right now these VCs present maybe 50-100 companies to them (LaFamigila for example has 34 investments as of now, I think), which is still a very biased and restricted sample, so they are almost surely missing out on some great innovation opportunities. Doing B2B sales to large enterprises in Germany I found that it takes a lot of side channels & social engineering to sell into large organizations as a startup. Maybe this is just part of the "game" but I can't stop thinking that those companies miss out on so much innovation because they simply don't have good processes in place to systematically and fairly build relationships with small, innovative tech companies. Founders from different regions, how is your experience with this?
- kfk 7y agoThe thing with big companies is that you have to fit in whatever reality they are telling themselves in that moment. Then you need big credibility points to give them a way to say you were the best at xyz, pity that you failed. They care 0 about innovation, unless they are telling themselves they need it but even then it’s likely to require the small startup to have accumulated a lot of credibility first.