European Venture Capital: Myths and Facts

The British Private Equity and Venture Capital Association (BVCA) has published a report dispelling many of the stereotypes and myths about the performance of Europe’s VCs.  

Myth #1:  “The likelihood of a successful VC exit is lower in Europe than in the US”

the timing and year of the investments, industry, and life-cycle stage of the company.  When these factors are controlled for, the probability of success, particularly when looking at IPO exits, is virtually the same in the US and Europe.

Myth #2:  “Some vaguely understood determinants of success are tilted in favor of the US and against Europe” 

Thus, the difference in performance results between Europe and the US is essentially due to the fact that Europe’s venture sector developed later than the US’s and Europe’s smaller pool of repeat entrepreneurs.  As the report’s conclusions highlight, this is something Europe’s venture and entrepreneurial community have been actively working to resolve in recent years.

Myth #3:  “There is a chronic stigma around failure which harms European entrepreneurs.”

This report, originally covered in the Financial Times, is really interesting and extensive, with lots of stats for those of you who love digging into the numbers.