Europan VC: a controversial asset class?

Venture Capital: Practicing Blind Faith. There is a huge difference between optimism and blind faith.

If you're an entrepreneur or in the VC space, you should know the difference. The performance and prospects of European VC. The good and bad news about the future of European VC. This is a guest post by Paul Jozefak of Neuhaus Partners, commenting on the release of a working paper put out by the European Investment Fund about the performance and prospects for European venture capital.

You can follow Paul at his blog or on Twitter. The European Investment Fund (EIF) put out a working paper recently that initially sounds like bad news. Fortunately, for those of us in the market long enough, it's actually good news. As a side note, I'm glad to see this paper come out from the EIF. For those of you not in the know, they are one of the largest limited partners (LP's: investors in venture capital funds) in Europe and are basically in almost all the funds throughout the market. European Venture Capital Activity Down 28% In The First Half Of 2011. If you needed more proof that the venture capital industry here in Europe is struggling to keep up, here are some new facts and figures from Dow Jones VentureSource to prove there’s most certainly no bubble in these parts.

According to DJV, European venture-backed companies have raised 2.2 billion euros through 447 deals in the first half of this year, a 28 percent decline in deal activity from the first half of 2010. Yes, that’s a drop of nearly a third. Dow Jones VentureSource reports both capital raised and the number of European venture-backed IPOs were up slightly compared to last year, reaching their highest six-month level since the first half of 2007.

However, the nine flotations – which raised a total of 611 million euros in the first half of 2011 – were still some way off the 27 IPOs that raised 723 million euros in the first six months of 2007. France came in at second place, yet it also witnessed a decline in investment and activity in the first half of this year. Jeff: Re the (irritating) US/Eur... Mikebutcher: @jeff No-one is whining he... Jeff: @mikebutcher sorry mate, i... Mikebutcher: @jeff Fair enough then, so... Jeff: @mikebutcher There is a to... Jeff: To be fair: a lot of Europ... Earlybird Hatches The Term “European Comeback” This guest post is by David Cowan.

Since 1992, Cowan has been a venture investor at Bessemer Venture Partners, where he funded Blue Nile, LinkedIn, Postini, VeriSign and over a dozen other startups that have since gone public. He blogs at Who Has Time For This? I just couldn’t keep my big Tweeter shut. Euro VC Scene: Be Careful What You Wish For. I'm on vacation and wasn't going to blog while away but one thing has been puzzling me and I thought a post was worth it.

Once again, and this is a trend as you'll by now have seen on my blog over the years, we're discussing Euro VC verses the Valley. European Venture Capitalists ‘Not Entrepreneur Friendly’ Says Founder - Tech Europe. DataSift Halstead: It is almost as if [European] VCs think of themselves as giving you loans European VCs are too risk averse, not entrepreneur friendly and under value companies, says the CEO of a U.K.

-based start up that announced its first funding. Astute readers will have noticed that yesterday’s announcement by DataSift of their $6 million funding round was all from U.S. venture capital firms. This was no coincidence. “What disappoints me the most is that I am a huge advocate of Europe, but as a businessman you are always going to go with the best valuation and the best partners,” says DataSift CEO Nick Halstead. In defence of European VCs. It is a shame to see Nick Halstead, founder of DataSift, make broad brush claims that European VCs are risk averse and not "entrepreneur friendly".

This week, UK-based tech firm DataSift received its first round of funding – all of which came from US venture capital firms GRP and IA Ventures. DataSift founder Halstead says that despite being a "huge advocate for Europe" (and spending two months pitching to European VCs), he was forced across the pond to find investment because American VCs are friendlier, have larger funds and take bigger risks. So, was he right? To say that there are more and bigger funds in the US is true. However, in a market chasing "the next big thing", more money isn’t always helpful. This can often lead to rather frenzied decision-making by the VCs. Dropbox recently announced an expected valuation of $5bn and it will have to execute flawlessly to live up to this. Jos White is the founding partner of Notion Capital and the co-founder of MessageLabs.

The Great European VC Debate – Timid, risk averse, bad? Or just misunderstood? Destin: European VC Needs Revolution, Not Evolution. European venture capital and a theory of evolution. DataSift – The little startup (from Europe) that could [TCTV] When I first met and interviewed Nick Halstead in a tiny, unassuming office an hour’s drive from central London in October 2008, I realised I was meeting someone who was passionate not just about startups, but had the kind of deep technical knowledge that would stand him in good stead.

Unlike some non-technical, paper-thin ‘MBA entrepreneurs’, Halstead could see what was happening with the underlying trends of the Internet ecology and its drift towards realtime. Long before Twitter’s firehose was released, Halstead was trying to fix the broken problem of RSS feeds and commenting systems with “Favorit”. But with with Twitter’s emergence he pivoted away from to create Tweetmeme, the consumer curated Twitter portal, which really took off and remains popular to this day. But that experience let to him building a team to deeply analyse Twitter’s underlying data, and not in Silicon Valley, but from Reading, in the UK county of Berkshire.

European VCs’ Risk Fight Back. Balderton Maloney: An investment is like a marriage with an entrepreneur Entrepreneurs need to pick the venture capitalist that will help them grow their business and scale globally, not just the one that writes the biggest check, said one of Europe’s leading VCs.

Barry Maloney, founder of Balderton Capital, was stepping up to the plate to defend, well, the entire European Venture Capital market after a leading U.K. entrepreneur essentially threw the industry under a bus. Now it's euro-entrepreneurs' fault! Charlotte Wiig Botteri: Europe still lacks entrepreneurial culture.

Why European VCs are lean, mean and more extreme. You’ve probably all heard the cliches about European startups and investors: venture money in Europe is more conservative, entrepreneurs are afraid of risk, the businesses are less ambitious and there are fewer blockbuster successes. These are trotted out all the time to explain why it’s better to start up or invest in America. Is it true? A new report suggests that the opposite may actually be the case — and that Europe’s venture capital industry may, in fact, be dramatically more successful than its American counterpart. The report, written by Hendrik Brandis and Jason Whitmire of German venture firm Earlybird, looks at the underlying data behind the two industries, and comes to the conclusion that while the European venture industry is significantly smaller (around a quarter of the size of the U.S. market) it punches well above its weight. This, they say, represents a real comeback for the continent’s investors.

Is European VC really out-performing the US, or is this wishful thinking? Top VC: We’ve got bigger problems than Europe vs USA. The recent report by German venture capital firm Earlybird suggesting that European investors were punching harder than their American counterparts certainly spurred plenty of opinion. The story got picked up around the industry, and we had some great comments that came in. Some took it as a rallying call for European entrepreneurs and investors to keep stepping up their game. “While European VCs are learning the game, the same can be said of entrepreneurs, who more often than not, have one or several start-ups under their belt now,” said Pamir Gelenbe of Dutch group Hummingbird Ventures. “These past experiences on both sides of the table are making the ecosystem more efficient and ultimately drive more value for all involved.” Others wondered whether it wasn’t all just a little too rosy to be real.