In this episode of the EUVC podcast, Andreas talks with Massimiliano Magrini, Co-Founder and Managing Partner at United Ventures.
Andreas and Massimiliano delve into the intricacies of scaling startups, the European venture ecosystem, and the challenges of attracting growth capital. They also touch on lessons from managing funds across different stages and sectors, and the unique dynamics of Italy’s growing role in venture capital.
At United Ventures, Massimiliano oversees the firm’s third early-stage fund (UV3) of €150M and a later-stage fund (UVTG), managing approximately €500M in assets under management. Based in Italy, United Ventures targets Series A investments across Europe, with a focus on enabling technologies for sustainable digitization. Their portfolio spans enterprise software, deeptech, and fintech.
Over the past decade, Massimiliano has backed notable startups including Moneyfarm, FaceIT, MusixMatch, Fiscozen, xFarm Technologies, and Exein, supporting founders from seed through early growth as they scale their companies into market leaders.
Watch it here or add it to your episodes on Apple or Spotify 🎧 chapters for easy navigation available on the Spotify/Apple episode.
Zero One Hundred Conferences organizes LP-GP networking events for PE & VC players in various European regions with a global outreach. In the last 8 years, they have hosted 50 events with 1700+ speakers, 6500+ investors, and 12000+ attendees.
The upcoming 0100 Conference Mediterranean presents a unique opportunity for private equity and venture capital LPs and GPs to meet and develop meaningful relationships.
Attendees will include major industry firms such as the European Investment Fund (EIF), Tikehau Capital, Vencap, Arcano Partners, Amundi-Alpha Associates, P101, United Ventures, Merseyside Pension Fund, and many more.
✍️ Guest show notes:
We believe in giving you our guests' thinking directly and unaltered. Therefore, no changes, no AI, no nothing has been done to the following sections.
Deep Dive: Attracting growth capital and generating DPI in European Venture
The US/Europe consolidation comparison
US consolidation model: The US benefits from large corporations, particularly in Big Tech, which have effectively digitized significant sectors of the economy. These companies attract both talent and smaller innovative firms, becoming consolidators through acquisitions. Other markets, including Europe, primarily export their technology to these US-based consolidators.
The US benefits from large tech corporations that act as consolidators by acquiring smaller firms, driving innovation and digitization. Massimiliano notes that European companies often end up exporting their technology, stating “a couple of companies we sold, we sold to institutional investors in the U.S.”. This dynamic highlights the gap between the US and Europe in terms of having large-scale consolidators.
European challenges: Europe lacks these large-scale consolidators. Traditional European corporations often struggle to acquire and integrate startups due to cultural disparities and differing business models. Startups acquired by larger European firms often find their innovative spirit stifled.
Europe struggles with building these large-scale consolidators, as traditional corporations often face difficulties in acquiring and integrating startups. Massimiliano mentions that “the European market is not yet capitalized in a way that has its own full set of players”, pointing to the challenge of startups losing their innovative edge when acquired by larger European firms.
Building European consolidators: Developing European consolidators requires time and a robust ecosystem of aligned early-stage and growth investors focused on fostering and empowering innovation. Europe appears to be at an inflection point, with a positive outlook for the future.
Developing strong European consolidators requires a long-term approach and a well-rounded ecosystem of early-stage and growth investors. Massimiliano reflects on this need for time and structure, noting “we are still lacking some components in Europe, but the ecosystem is getting there”. He sees Europe at an inflection point, with optimism about the future of its innovation ecosystem.
IPO limitations in Europe: Going public in Europe, particularly at an early stage, often generates a different level of capital than in the US. This limits a company's ability to attract talent and secure further funding, hindering its potential to become a consolidator.
Massimiliano highlights how going public in Europe often generates less capital compared to the US, limiting the ability of companies to scale and attract talent. He explains that “Europe is still lacking the same level of infrastructure and financial muscle”, which affects startups' potential to grow into major consolidators.
Positive outlook: Despite the challenges, the European venture capital landscape has significantly progressed over the past decade.
Despite these challenges, Massimiliano believes the European venture capital landscape has made significant progress, remarking that “the industry has grown big times”. He is optimistic about Europe's potential to overcome current obstacles and foster a thriving tech ecosystem.
Late-stage funding and the European venture capital landscape
Shortage of growth-oriented venture capital: While private equity firms active in growth-stage investing exist in Europe, they often prioritize profitability, unlike their venture capital counterparts. This is a critical difference, as venture capital plays a distinct role in supporting high-growth companies, even those that are not yet profitable.
Massimiliano highlights a key distinction between private equity and venture capital in Europe, explaining that “most of them, they come from private equity and keep on promoting that kind of mindset”. Growth-oriented VCs support high-growth companies, even those not yet profitable, whereas private equity often focuses more on profitability, which can limit risk-taking and growth potential.
European conservatism and traditional business practices: Europe's longer history with private equity compared to venture capital contributes to a more conservative investment approach. This can hinder the understanding and adoption of the venture capital model, which inherently embraces higher risk for the potential of higher returns.
The longer history of private equity in Europe has fostered a more conservative approach to investment. Massimiliano acknowledges this challenge, noting that “the mindset of venture capital is very different from the private equity style”. This conservatism can slow the adoption of the venture capital model, which thrives on higher risk and the potential for outsized returns.
Regulatory hurdles: Legislation can inadvertently create funding gaps at earlier stages. This highlights a potential disconnect between policy and the practical needs of the venture ecosystem.
Massimiliano identifies regulatory challenges that can create funding gaps at earlier stages, particularly due to “different country regulations and a lack of a single market” in Europe. This disconnect between policy and the needs of the venture ecosystem can stifle growth and innovation at critical early stages.
Systemic disconnects: A potential mismatch exists between policy and private capital in Europe. A lack of understanding of the venture capital model at the governmental level can create challenges throughout the entire investment landscape.
Massimiliano also highlights a broader issue with policy alignment, stating that “there has not been yet enough successful stories built from early stage to the growth stage to the IPO”. A lack of understanding of the venture capital model at the governmental level can hinder the development of a fully realized, self-sustaining venture ecosystem in Europe.
Innovation, legislation, and venture capital as an asset class
Contrasting regulatory approaches: Europe tends to proactively regulate emerging technologies like AI and data, while the US favors a more permissive approach, allowing for experimentation and development before implementing regulations. A hybrid approach is considered ideal but challenging to implement.
Massimiliano discusses the difference between Europe’s proactive regulation and the US’s more permissive approach, noting that “we still don't have a real single market in Europe”. While a hybrid model that balances innovation and oversight would be ideal, it remains difficult to implement due to cultural and regulatory differences across regions.
Venture capital's suitability for institutional investors: Venture capital is a well-suited asset class for institutional investors such as pension funds, given its long-term investment horizon aligns with their long-term liabilities.
Massimiliano emphasizes that venture capital aligns well with institutional investors like pension funds, given its long-term horizon. He notes that “if you start showing DPI, showing that you are in the top quartile of returns, you can have different kinds of conversations”, reflecting the potential of venture capital to meet institutional goals.
Evolving global investment landscape: American investment has shifted away from China and India, with some capital being redeployed to Europe. This shift, coupled with geopolitical factors like the reshoring of supply chains, is reshaping the technology landscape in both the US and Europe.
The global investment landscape is shifting as geopolitical factors reshape the focus of capital. Massimiliano points out that “geopolitics kicks in very, very hard”, leading American investors to reduce exposure to China and India, and redeploy some capital to Europe. This shift is altering the dynamics of the tech and venture capital landscape.
Importance of transatlantic collaboration: Stronger collaboration between the US and European tech ecosystems is crucial, including harmonized regulations, shared best practices, and a more unified approach to fostering innovation.
Massimiliano advocates for greater collaboration between the US and Europe, suggesting that “we need to have the right set of growth investors who can bridge that gap”. Harmonized regulations, shared best practices, and stronger collaboration between the ecosystems could foster innovation on both sides of the Atlantic.
Untapped potential of European pension funds: European pension funds remain significantly underinvested in venture capital despite its suitability for their long-term investment strategies. Legislative action could be key in encouraging greater allocation to this asset class.
European pension funds remain significantly underinvested in venture capital. Massimiliano argues that “it’s not linked to the typical private equity investment style”, stressing the need for legislative changes to encourage greater pension fund allocations to venture capital, which aligns with their long-term strategies.
A look at the person behind.
My career has always been at the nexus of business and technology. I was involved in the search engine space from its early days, serving as the founding country manager for Italy at both AltaVista and, later, Google. I led teams and organizations across various regions, driving their growth and development. I oversaw Southern Europe for Google until 2009, when I transitioned from the corporate world to venture capital.
Massimiliano reflects on his early career, sharing that “I started working for search engines… AltaVista first and Google afterwards.” He led these pioneering companies through their growth phases in Southern Europe, ultimately transitioning from the corporate world to venture capital in 2009.
United Ventures represents the partnership between my co-founder, Paolo Gesess, and myself. We had each previously managed separate venture capital funds, but joined forces to create United Ventures, driven by a shared vision of Europe as a global hub for successful tech companies. Over the past decade, we've become a leading venture capital firm in Italy, with a team of 15 experienced investment professionals, each bringing unique skills and perspectives.
Massimiliano and his co-founder, Paolo Gesess, combined their separate funds to create United Ventures, driven by the belief that Europe could become a center for global tech success. He says, “we came together to build something that was bigger and stronger.”, and over the past decade, they’ve built a leading VC firm in Italy with a team of 15 professionals.
Perhaps surprisingly, the experiences that most helped me cultivate the venture capital mindset were competing in endurance cycling and managing an agricultural estate with my wife.
Surprisingly, Massimiliano reveals that endurance cycling and managing a vineyard with his wife helped cultivate his venture capital approach. He compares cycling to “some sort of meditation in movement”, emphasizing how perseverance, long-term thinking, and resilience have parallels in venture capital.
The three biggest learnings in venture.
VCs must balance deep knowledge with openness to new discoveries.
VCs must develop robust and adaptive investment theses within their chosen expertise domains while remaining open to serendipitous discoveries that may challenge existing boundaries. The key is to strike a balance between deep knowledge, curiosity, and rigor in our approach to investment. This allows us to identify and support the most innovative companies operating at the intersections of technologies and industries. Currently, my primary area of interest lies in initiatives aimed at solving bottlenecks to AI adoption and mitigating any potential side effects.
While having a strong investment thesis is crucial, VCs should remain open to unexpected opportunities that challenge their assumptions. Massimiliano highlights the importance of flexibility, noting that “you need to have a vibrant discussion within the partnership... reality is always richer than you are and your capability of understanding”
Investing is a responsibility toward society.
As investors, we carry great responsibility not only towards our team and limited partners but also towards society as a whole. We should always ask ourselves whether our activities align with the idea of positively impacting society. And keep in mind that there's no limit to what a small community of motivated people can achieve.
VCs bear a responsibility not only to their LPs and teams but also to society at large. Massimiliano emphasizes the need for venture capital to positively impact society, stating that “venture capital is important because it’s building the company of the future”
Timing is part of your journey to success.
Timing is everything: It's essential for a successful initiative to capture the Zeitgeist—the spirit of the times—and resonate with its target market.
Massimiliano’s focus on aligning with market needs reflects this, as he notes that certain opportunities require the right moment to flourish. VCs must be able to recognize when an initiative is in sync with market dynamics to maximize its potential
Strongly held belief you’ve recently had to change your mind on.
Overcoming bias is an ongoing process.
I used to believe I was mostly bias-free, but I've realized that overcoming bias is a constant and ongoing struggle. It's a process of continually addressing both recognized and emerging biases.
Massimiliano emphasizes that overcoming bias is a continuous effort, as “you need to maintain this flexibility… reality is always richer than you are and your capability of understanding”
Success can emerge from seemingly boring initiatives.
I've learned that success can emerge from seemingly boring initiatives. Excitement doesn't always go hand in hand with results.
Massimiliano points out that some of the most successful investments come from long-term, strategic initiatives that don’t always seem exciting at first. He mentions how “the thesis you think is more important than people” but learned that focusing on people and execution, even when less thrilling, often leads to substantial results
Investors need to know when to step in.
While investors need a high tolerance for failure and imperfection in the companies they support, there are times when you need to step in. Being a facilitator isn't always enough.
While investors should usually act as facilitators, Massimiliano acknowledges that “it’s not up to you to fix things directly, but it’s up to you to make sure that you are relevant to people who can fix it.” This means knowing when to step in during critical moments, ensuring the company stays on track without overstepping the founder's role.
Top tips for VCs fundraising.
Authenticity is key. There's no substitute for being yourself.
Massimiliano underscores the importance of being genuine, noting that “venture capital is important because it’s building the company of the future.” Staying true to your values helps foster trust and meaningful relationships, which are crucial for long-term success in venture capital.
Identify and cultivate relationships with LPs who align with your values, strategy, and stage of development.
Massimiliano stresses the need to find LPs who share your vision, explaining that “you need to find the right set of people that have a mindset which is in line with yours.” Building strong relationships with LPs who understand your approach and goals is essential for effective collaboration and growth.
Tailor your communication to your audience.
Refrain from assuming everyone speaks your language. Speak in terms of numbers with data-driven LPs and discuss investment theses with those who appreciate strategic conversations.
Massimiliano highlights the importance of understanding your LPs’ perspectives, saying “you need to find people who try to understand what's the end game.” For data-driven LPs, focus on metrics and returns, while others may appreciate discussions on long-term strategy and vision. Communicating in a way that resonates with each LP is key to fostering productive partnerships.
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🗓️ The VC Conferences You Can’t Miss
There are some events that just have to be on the calendar. Here’s our list, hit us up if you’re going, we’d love to meet!
0100 Conference Mediterranean | 📆 28 - 30 October | Milano, Italy
culttech summit | 📆 5-6 November | Vienna, Austria
GoWest | 📆 28 - 30 January 2025 | 🌍 Gothenburg, Sweden
GITEX Europe 2025 | 📆 23 - 25 May 2025 | 🌍 Berlin, Germany
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