EUVC Newsletter | 08.07.2024
Welcome to our community-sourced newsletter featuring the latest submissions to the eu.vc insights platform β the platform that collects & amplifies the best long-form pieces from the EUVC community.
This week, we feature submissions from Elaia, Foundamental, Notion Capital, byFounders, Antler, Revent VC, and many more legendary European firms.
Click here to submit your own articles, events or projects π₯
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Venture Capital is a MEAN business
by Martin Krag, Partner at byFounders. | Originally published on Inverted J Curves.
Why it matters: Venture Capital (VC) can outperform other asset classes, boasting returns up to 80% IRR over a 10+ year cycle. Yet, its dispersion is vast, making manager selection crucial. Half of all VC funds beat the stock market, but bottom quartile funds often lose money.
While average VC funds offer mediocre returns, top-tier funds show substantial performance gaps. Patience is vital, as compounding significantly boosts returns over time. Ultimately, VC's power law distribution emphasizes the importance of capturing outliers for extraordinary returns, highlighting a mean world where only the best truly thrive.
The founder's guide to understanding investors
by Chris Tottman, Partner at Notion Capital. | Originally published on Linkedin.
Why it matters: Navigating investor relationships is a key challenge for startup founders. Chris Tottman, having conversed with thousands of founders, offers a comprehensive guide covering types of investors, their true desires, red flags, and effective communication strategies.
This guide is a good resource for founders aiming to align with investors, avoiding common pitfalls and fostering successful partnerships. Understanding these dynamics can streamline the fundraising process, enhancing founders' chances of securing the right investment to scale their ventures.
π¦ Cash is king β turning unicorns into realized gains
By Edouard Lingjaerde, Manager at Reference Capital | Originally published on π₯ Reference Newsflash.
Why it matters: Despite backing the next tech unicorn, VCs and LPs are increasingly focused on liquidity, measured by Distributions to Paid-In Capital (DPI). The influx of capital into venture capital from 2018-2023, driven by low interest rates, has shifted preferences towards funds demonstrating both performance and liquidity.
With IPO windows closed and M&A muted, GPs face pressure to create liquidity, often opting for strategies like secondary markets, continuation funds, and private equity buyouts. This trend affects fund strategy, deployment pace, and the overall venture capital landscape, pushing funds to navigate tough market conditions and deliver returns efficiently.
My #1 advice to Limited Partners.
by Benedikt Langer, General Manager at The Sutton Firm. Originally published on Embracing Emergence.
Why it matters: For Limited Partners (LPs), developing a keen taste for identifying quality Emerging Managers is crucial. Benedikt Langer emphasizes the importance of honing this skill through extensive and varied exposure, akin to wine tasting. LPs must engage with a wide spectrum of Emerging Managers to understand their landscape and develop an intuitive sense for quality.
This process involves dedication, numerous calls, and reflection. While access to Emerging Managers is abundant, mastering the underwriting process is the real challenge. By cultivating this craft, LPs can swiftly recognize top-tier managers, ensuring they back the best opportunities in the market.
The rise of the European technical founder
by Jack Davies, Communications Director at Antler. | Originally published on Antler.
Why it matters: Antler's latest report unveils Europe's secret sauce for building tech giants: technical founders. With a 300% rise in tech-savvy applicants since 2021, Europe is finally catching up with the US, where 100% of top tech giants' founders have technical backgrounds.
The data shows an 825% increase in technical talent becoming founders post-layoffs, particularly from big names like Deliveroo and Klarna. This surge is a game-changer, setting the stage for Europe to finally birth its own global tech titan.
Will EU corporate venture capitals thrive? A look into the crystal ball
by Jeppe HΓΈier, Venture Partner at Antler | Originally published on Linkedin.
Why it matters: European Corporate Venture Capital (CVC) faces a critical juncture similar to the skepticism European Venture Capital (VC) encountered two decades ago. Despite initial doubts, European VC thrived, becoming a dynamic force in global innovation. For European CVCs to succeed, senior leaders must be educated on venture norms, with institutions like Stanford, INSEAD, and Columbia offering valuable courses.
Additionally, market analysts need to recognize and value CVC efforts. By addressing these gaps, European CVCs can adapt, innovate, and continue driving entrepreneurship and economic growth across the continent. The past's lessons illuminate a promising path forward for corporate venturing in Europe.
Investing for impact in braintech, interview w. Anne-Sophie Saint-Martin (Newfund) π§
by August Soliv, Author of Impact Supporters. | Originally published on Impact Supporters.
Why it matters: Braintech is emerging as a crucial impact area due to an aging population and a surge in chronic and neurological diseases. Anne-Sophie Saint-Martin of Newfund highlights that braintech startups in Europe rival those in the USA in quality but face monetization challenges. FDA approval remains a significant hurdle, yet partnerships, like Newfundβs with FondaMental Foundation, help mitigate these risks.
The largest trend in braintech is techbio, which accelerates drug discovery and patient care. Understanding these dynamics can guide VCs and LPs in supporting impactful braintech ventures, driving advancements in diagnosing and treating neurological diseases.
Where are Europeβs digital care unicorns?
by Sharon Chen, Head of Research & Impact at Revent. | Originally published on Revent Newsletter.
Why it matters: Europe's digital chronic care landscape lags behind the US, with fewer unicorns and slower growth. The disparity stems from structural differences in healthcare systems and slower digital adoption.
However, emerging trends, including GenAI breakthroughs and increasing openness to digital health, signal potential for growth. Europe's startups must focus on the "Four Eβs" (Enrollment, Engagement, Efficacy, Economics), hack distribution channels, and leverage AI to drive down costs. Understanding these dynamics can help VCs and LPs spot and support the next wave of digital health innovators.
Dual use and defense tech: what's the difference?
by Nicola Sinclair, Founder and General Partner at Twin Track Ventures. | Originally published on Medium.
Why it matters: Understanding the nuances between deeptech, defence tech, and dual use is crucial for founder-investor fit and efficient communication. Early Silicon Valley startups with defence links highlight the historical significance of dual use.
Today, some argue VCs hide behind dual use, avoiding offensive tech funding. However, many dual use investors leverage sector expertise to balance returns and national security. Deeptech encompasses high technical risk tech, dual use serves both commercial and national security sectors, and defence tech spans consumer to deeptech with military applications. Clarity in these terms helps VCs and LPs align on impactful investments.
Your sales process runs on science and data
by Bogdan Iordache, solo GP at Underline Ventures. | Originally published on Underline Ventures.
Why it matters: Bogdan Iordache, in conversation with Giorgio Pontillo, former VP of Revenue at IP Fabric, highlights the importance of building robust sales processes for tech startups. Emphasizing the shift from selling features to selling value, he underscores the criticality of identifying the Ideal Customer Profile (ICP).
Giorgio's approach involves a data-driven sales process, aligning sales and tech teams, and prioritizing retention over accidental sales. His insights are invaluable for tech founders aiming to scale effectively, ensuring their products meet market needs and sustain long-term customer relationships. These lessons are key for VCs and LPs looking to back startups with solid sales foundations.
Alexandre Margoline and Anna Vershebeniuk to build Lazard Elaia Capital alongside Xavier Lazarus, with the ambition to launch its 1st European growth tech fund
by Xavier Lazarus, co-founder & Managing Partner at Elaia. | Originally published on Elaia.
Why it matters: Alexandre Margoline and Anna Vershebeniuk are joining Lazard Elaia Capital (LEC) as Partners. With their extensive backgrounds in venture capital, growth, and buyouts, they will work alongside Xavier Lazarus to launch LEC's first growth equity fund by 2025.
This fund aims to invest in B2B European tech, targeting late-stage ventures and small- to mid-market buyouts. Margoline's experience with Permira and Vershebeniuk's work with Headline and Thrive Capital will drive LEC's mission to support tech leaders across Europe, enhancing the continent's position in the global tech landscape.
Algorithm G Announces GAIAΒ© Certification as a Globally Recognized Software
by Gonçalo Perdigão, Managing Director at Algorithm G. | Originally published on GAIA.
Why it matters: GAIAΒ©, the latest AI wizardry from Algorithm G, just got a global gold star with certification from WIPO in 164 countries. It's a big deal for VCs and LPs hunting for next-gen AI tools to turbocharge their portfolio companies.
With its ability to slash costs and fast-track deployment, GAIAΒ© promises a revolution in AI-driven business solutionsβfrom SEO to customer service. Plus, powered by OpenAI and backed by Microsoft for Startups, itβs like having a magic wand for business transformation.
Navigating Corporate Venture Capital in 2024
by Jonathan Hollis, Managing Partner at Mountside Ventures. | Originally published on Medium.
Why it matters: Mountside Ventures & Love Ventures' report dives into Corporate Venture Capital (CVC), surveying over 100 global CVC investors with Β£20 billion in AUM. The report highlights the increasing role of CVCs in deals, from 1 in 10 in 2010 to 1 in 4 in 2024.
Founders gain market validation, strategic resources, and exit opportunities from CVCs, but must be cautious of misalignment and longer investment timelines. CVCs, in turn, leverage startups for competitive edges and market insights. The report underscores the strategic and financial impacts of CVCs in today's venture landscape.
Mastering International Go-to-Market (GTM) Strategies: Insights for SME Tech Startups
by Δltitude | Originally published here.
Why it matters: B2B startup founders and marketing whizzes, this one's for you! Dive into the nitty-gritty of international Go-to-Market (GTM) strategies with Hans-Peter Frank, a GTM maestro from Fleet.
Get the lowdown on crafting GTM plans, smashing through common barriers, and those revenue goals with real-world case studies from Fleet and Pliant. If you're aiming to go global and boost your market footprint, this webinar is your golden ticket.
Read more and book your ticket here.
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Brilliant collection of very intriguing pieces as always! I think my favorite has to be the brief on differentiating between defense and dual-use! Looking forward for more.