A lack of venture capital investment to European startups in mid-stage growth has led many to seek capital in the U.S., particularly in the tech and entrepreneurial hub of the world: California.
According to the European Private Equity and Venture Capital Association and Dow Jones VentureSource, there has been a significant disparity between the amount of later stage deals signed in Europe compared to the amount signed in the U.S. Consequently, startups such as LeWeb are looking to incorporate in California.
"I think that a lot of entrepreneurs in Europe sell out too early," Davor Hebel, principal of Fidelity Growth Partners, told the Wall Street Journal. "And we, as venture capitalists, are partly guilty of that as well because maybe we don't encourage them to really go for that billion dollar exit, which is really what this business is about, building billion dollar companies."
Nowhere is this more evident than in American web startup circles, where Facebook founder and CEO Mark Zuckerberg famously turned down a $3 billion buyout offer from Microsoft, and, more recently, Groupon founder Andrew Mason turned down a $6 billion bid from Google.
But Hebel also told the Journal that it may not be so much a cultural difference as it is an age gap between the two markets. Over the past half-century, U.S. venture capitalists have learned to be more patient with returns on investment - a trend that has been reinforced through the internet and tech booms of the past couple decades.
Tags : ca, ny, small business management
Posted: Dec 9th, 2010