The State of European Venture Capital

The State of European Venture Capital

          
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The State of European Venture Capital

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  • Toward a More Investor-Friendly European VC Market

    How can European entrepreneurs attract European private investors? It’s a steep challenge. Several conditions are necessary to draw in private capital. Most important, investors must be confident that they can earn competitive returns. Investment structures have to aim for returns on equity of at least 20 percent. However, performance will depend on further development of the European VC ecosystem. The following few points are mission critical:

    • To attract institutional investors accustomed to writing tickets of €50 million or more, the market has to feature investment opportunities with a pan-European focus.
    • There must be funds that are large enough—potentially with capitalizations of €350 million or more—to invest in startups at all stages of development, especially the late and growth stages.
    • VC funds and managers need transatlantic expertise and networking to support the growth of ventures in the U.S.
    • Governments can act as catalysts and be the first movers, but they cannot lead private investors in new fund vehicles.
    • Market performance must be sufficiently transparent, trustworthy, and timely to enable efficient investment decisions.