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Most innovation of internet and computer-related business come from Silicon Valley, so it seems reasonably clear to me that investors there are doing the right
by 13415 4y ago
Most innovation of internet and computer-related business come from Silicon Valley, so it seems reasonably clear to me that investors there are doing the right thing. To be honest, I find it hard to name any highly successful EU companies whose main business is internet-based or software-related, at least not in the b2c sector. There are some, but the major players seem to come from the US and more recently also from China.
I've always considered the risk-averse investment culture and bureaucracy in Europe to be a major factor.
- ivalm 4y agoSkype, Spotify. But both grew with SV venture. EU venture is not as good for early companies because they are much more conservative.
- scarface74 4y agoAnd Spotify is a piss poor business, has never been profitable and its costs scale directly with its revenue. It’s contractually obligated to give its suppliers 70% of its revenue and its major competitors consider its whole reason for being just a tiny feature. Streaming music is a “feature not a product”
- ivalm 4y agoA feature that IPOed and is currently with a market cap of $24B. Please let me know where I can invest in more of such features, because the ROI is huge.
- scarface74 4y agoSo now the idea of a successful company is “what it IPOd for” not “whether it makes a profit”? Spotify had a market cap of $26 billion at IPO. It’s now worth $24.2 billion. If you had bought the stock at IPO and held onto it your ROI would have been negative. The VCs and investment bankers would have counted you as one of “the greater fools” (https://www.investopedia.com/terms/g/greaterfooltheory.asp https://www.investopedia.com/terms/g/greaterfooltheory.asp). By comparison, the S&P 500 is up 50% since Spotify’s IPO
- ivalm 4y agoThis is a discussion on VC investment strategy. So the question is more like: if you invested in Spotify series A or B and exited at IPO did you have a good RoI? The answer is yes, you had an extremely good ROI.
- scarface74 4y agoThis article is about just the opposite. > My bootstrapped mobile gaming company achieved success… He was specifically talking about a company not getting VC funding and “growing profitably”. In the last decade or so, I can’t think of one tech company that was profitable before it IPOd.