Lack of investors. Simple as that. Companies that run on deficit for 5-10 years can not survive in Europe. Facebook, twitter, etc. Wouldn't be able to survive in Europe, simple as that.
ps. I hate the word 'unicorn'.
ps. I hate the word 'unicorn'.
With regards to lack of investors I don't think it's as simple as that. If it was only a matter of investments then surely US investors or Asian investors could just come in with the money. There is something that makes European VCs risk averse and keep american investors out of Europe IMO.
> I hate the word unicorn too, but it's shorter than private market companies with a valuation of more than $1 billion :)
Ah, is 1 billion the limit for the 'unicorn' definition? In what amount of time? :-) We have 7-year old companies, with 50+ employees posing around as startups everywhere these days. It's not related, but you know... Everyone is playing with words here :-P
> With regards to lack of investors I don't think it's as simple as that.
Of course you don't, otherwise you wouldn't have written a blog post... You could tweet! But, unfortunately, as most social phenomena is not that complex :-)
The reason we can't have a "unicorn" in Europe is that no one is going to support a company that it's expenses outsize it's turn-over even if this is because of extremely high growth rate.
If you're lucky enough, you might land some millions from some startup event. But even they, ask to see growth (in terms of users) and (hehe) immediate ROI.
In startup Istanbul 2014 the no1 startup which received investment was the only company who didn't actually need it... It was already generating way more than it could burn. So it was a very easy bet.
Small-cap companies is shorter than that too and it actually means something. Don't give excuses for using stupid terminology.
It's an annoying term, but it works (unfortunately)
One of the differences is European investors tend to think on the basis that if it walks like a horse, neighs like a horse and only actually does the same job as a horse ....
You're both right.
Apparently US investors don't even like going out of Silicon Valley, why would they go all the way to Europe?
Or investors in Europe have enough opportunities to generate more than the typical return on investment of VC? The average VC ROI is really low, it gets outperformed even by passive index funds IIRC.
Edit: Found the source.
"Yet 2013 annual industry performance data from Cambridge Associates shows that venture capital continues to underperform the S&P 500, NASDAQ and Russell 2000."
https://hbr.org/2014/08/venture-capitalists-get-paid-well-to...
The top companies only want to go with the top investors and vice versa. I wish they'd publish data. I'd love to see Benchmarks ROI on their recent fund, it's likely going to be the best performing fund of all time.