The State Of Investments In Europe: A Review Of The Last 5 Years | Hacker News Reader

The State Of Investments In Europe: A Review Of The Last 5 Years

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23 pointsAndriusWSR8 comments

> At first glance, the increase in speed from seed to Series A in Europe from 424 to 205 days appears to be a good sign. However, remember that the average seed investment in Europe in 2013 was $150,000 compared with $500,000 in the U.S.

> We suspect that the reduced time between rounds in Europe unfortunately signals that entrepreneurs are being forced to refocus on fundraising more quickly at the expense of building and scaling a product and the business.

I believe this is true, my own anecdotal experience backs it up. We're a London based startup ( https://microco.sm/ ) and we raised our initial £150k for our friends and family round which enabled us to build the platform and get to 43,500 users.

But... we're now in a tough spot with the runway end looming, and have to return to fundraising. I'd much rather carry on focusing on the product development and improving awareness of our offering. But instead it's a drop-everything and go focus on raising money... which in-turn kills a little of our momentum.

It feels like the European adversity to risk manifests as smaller investments that result in the startups not having as much time to mature their offering and build that momentum before constantly going back for more investment.

Unrelated, but your site displays an SSL warning, because you have mixed content. Might want to fix that.

The site does not include mixed-content.

However the page does have a form for a mailing list via MailChimp, and that form submits over http:// which triggers Chrome to state that give the mixed-content indicator.

The detail of the error is that the form itself should be submitted via https:// (I agree), but to my knowledge Mailchimp only takes http:// and the destination page itself would submit over http:// and show real mixed-content if you tried to POST via https://

Ah .. that's why I couldn't spot it at a glance. It works fine with mailchimp, if you just replace http with https. I just tried it.

What would you say needs to change? Would you say if were in the US you'd have had a chance to work on the product longer and spend less time on fundraising?

Maybe not in the US generally, but in Silicon Valley yes. For the same amount of effort in fundraising, companies raise a greater amount.

If they're smart about spending this (not all in San Francisco at those wages and rental prices) then you can buy far greater resource (either pure headcount, or more time for the headcount you have).

Either of those scenarios would have enabled us to bring a better product to market sooner, and to have raised awareness with more of the market... without already being on the fundraising treadmill.

I'm not sure how that helps.

If you are in Silicon Valley (or NYC), then yes, you can fund raise easily and at high valuations, but you are stuck paying Silicon Valley wages.

If you are in the US, but outside Silicon Valley (or NYC), then you cannot raise nearly as easily as in Silicon Valley. So while you are not paying Silicon Valley wages and rental prices, your valuations are lower as well.

The last option is to have headquarters in Silicon Valley and have all your developers be remote - but that option seems frowned upon as seems awfully close to the outsourcing development.

The cliche "there is no country called Europe" very much applies in this case. Seed investment happens almost exclusively on the national level, with local investors and start-ups who's initial target is the local market, regardless of how big their long term ambitions are.

The local investment and startup scenes vary wildly across Europe. Not to mention the wildly different states of the various economies.

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