VNTR Capital News September 3, 2023 – News, Events, VC Reads
Venture Capital, Web3, and Private Equity – September 3 News, Events, and VC Reads
Hello friends,
Happy Sunday!
VNTR Capital Newsletter is delivered to 45k+ investors weekly to share the latest news, events, and articles from the global VC and startup ecosystem.
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Scroll down for VNTR Capital Community News, Upcoming Events, and VC News/Reads.
VNTR CAPITAL COMMUNITY NEWS
Spotlight
Davos WEF 2024 — We have an opportunity to operate the Investors Hub/House in Davos, where we will provide a meeting place for active investment decision-makers to connect and host side events (panel discussions, debates, keynotes, roundtables, and parties). We are looking for Title and event sponsors so we can produce this 5-day experience. Please reach out to Yuri to discuss the collaboration options.
Flagship events — Join us at our flagship events, where we gather many investors, host a keynote speaker, and up to 5 partner/sponsor presentations during Token2049, GITEX Global, Money20/20, and Web Summit. Companies can join to connect with investors.
VNTR Platform — We launched a Venture Capital news feed on the VNTR Platform that will serve our members as a daily source to read and learn from curated articles from the VC ecosystem.
We are hiring:
Sponsorships Sales Manager in Portugal or remote to secure sponsorships & strategic partnerships. Apply here
Chapter Director in Riyadh, Singapore, and Berlin to help us launch and grow the VNTR Capital community and serve as a gateway for the Venture Capital global community. Apply here
VNTR 1-on-1 Speed Networking Event — Grow your co-investors network at the VNTR Investors Speed Networking event on Sep 6, where you can build valuable new connections. To participate, apply on the VNTR Platform.
Peer-to-Peer Support — The VNTR Platform now offers a space for our members to seek assistance and receive support from VNTR peers. Submit a request, and fellow VNTR peers will promptly provide their insights and responses to assist you.
Create your VNTR Investor Account
This week
New partnership — We partnered with Liquid Crypto, a next-generation DeFi platform.
London — We hosted a private VNTR Investors dinner on Aug 29, where London chapter members met with our visiting VNTR PRO member Victor Baron from Riga (view photos).
Upcoming
Seoul — This week, we will host the first VNTR Investors Roundtable on September 6th to kickstart VNTR Chapter Seoul events as a side event to Korea Blockchain Week.
Singapore — Our flagship event in South East Asia is on Sep 14 in Singapore (official side event to Token2049, 10% Off with VNTRCAPITAL). We will host James Tan, Managing Partner at Quest Ventures, as a keynote speaker and 5 presenting partner companies. One slot is still available; apply to present.
Zug — The first Venture Capital Investors Roundtable in Zug is on Sep 15 during the Crypto Valley and Crypto Oasis Swiss Web3 Festival.
San Francisco — Our second Investors Roundtable in Silicon Valley will take place on Sep 20 during TechCrunch Disrupt 2023.
Barcelona — Join us for the VNTR Barcelona Chapter launch on Sep 21, where Jordi Bosch will gather the VC community for an interactive roundtable.
Munich — The first VNTR Investors Roundtable in Munich will take place on Sep 25 as a side event to Bitz & Pretzels and Octoberfest 2023.
London — The next VNTR Investors Roundtable London will be on Oct 5 as a side event to Sifted Summit and Zebu Live.
Tbilisi — Our 4th VNTR Investors Roundtable Tbilisi Oct 8 will gather visiting and local investors during the DeGameFi Web3 annual conference.
Thank you to our Partners:
Stellar is a decentralized, fast, scalable, and uniquely sustainable network for financial products and services. It is both a cross-currency transaction system and a platform for digital asset issuance, designed to connect the world’s financial infrastructure. Financial institutions worldwide issue assets and settle payments on the Stellar network, which has grown to over 7 million accounts. The Stellar Development Foundation (SDF) is a non-profit organization that supports the development and growth of Stellar, an open-source network that connects the world’s financial infrastructure. Founded in 2014, the Foundation helps maintain Stellar’s codebase, supports the technical and business communities building on the network, and serves as a voice to regulators and institutions. The Foundation seeks to create equitable access to the global financial system, using the Stellar network to unlock the world’s economic potential through blockchain technology.
EHP is the only three-phase heat transfer technology that contains nanoparticles and a miraculous way to reduce energy consumption. EHP Technology (watch video) is the world's first and only known 5th-generation heat transfer technology, the world's fastest, most affordable, and most efficient heat transfer technology. EHP is the first recycling technology that can reduce up to 70% of our world's global waste heat to go to the air, saving up to 40% of the world's global energy problem. You can contact Anil to learn more.
Liquid Crypto is leading the way for the next generation of DeFi. Users can effortlessly complete all of their transactions within one platform with confidence, knowing they will always be offered the lowest possible rate in the market. Liquid Crypto’s AI enables projects, traders and investors to effortlessly realize outsized returns in an omnichain reality by bridging the gap between CeFi, DeFi, Money Managers and Market Makers. You can contact Choua Lee to learn more.
Upcoming VNTR Capital events:
Sep 6 VNTR Speed Networking (Online)
Oct 17 VNTR Investors Roundtable Dubai (During GITEX Global and Expand North Star)
Oct 18 VNTR Investors Roundtable New York (During NY Tech Week)
Oct 19 VNTR Investors Roundtable Lisbon (During Block3000)
Oct 23 VNTR Investors Roundtable Las Vegas (During Money20/20)
Oct 25 VNTR Investors Roundtable Barcelona (During European Blockchain Week)
Nov 1 VNTR Investors Roundtable Hong Kong (During Hong Kong FinTech Week)
Nov 3 VNTR Investors Roundtable Istanbul (During Istanbul Tech Week)
Nov 9 VNTR Investors Roundtable Singapore (During Bloomberg New Economy Forum)
Nov 14 VNTR Investors Roundtable Lisbon (During Web Summit)
Dec 1 VNTR Investors Roundtable Helsinki (During SLUSH)
Dec 10 VNTR Investors Roundtable Miami (During Art Basel Miami)
RSVP to Upcoming VNTR Capital Events
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UPCOMING VC EVENTS
Sep 4-5 Seamless, Riyadh, Saudi Arabia
Sep 6-7 DLD, Munich, Germany
Sep 11-13 Permissionless II, Austin, Texas
Sep 12-14 Dreamforce, San Francisco, USA
Sep 12-17 Berlin Blockchain Week, Berlin, Germany
Sep 12-13 MoneyLive Asia, Singapore
Sep 12-14 Glendale Tech Week, LA, USA
Sep 13-14 Token2049 Asia, Singapore (10% off with VNTRCAPITAL)
Sep 18-19 IPEM Paris, France
Sep 19-21 TechCrunch Disrupt 2023
Sep 19-22 Super Return Asia, Singapore
Sep 20-21 DMEXCO, Cologne, Germany
Sep 21-22 Metaverse Summit, Paris, France
Sep 21-23 TechSparks 2023, Bengaluru, India
Sep 24-26 Bits and Pretzels, Munich, Germany
Sep 26-28 Meridian by Stellar, Madrid, Spain
Sep 26-28 Mobile World Congress, Las Vegas, USA
Sep 27-30 Monaco Yacht Show, Monaco
Oct 3-4 CV Summit, Zug, Switzerland
Oct 4-5 Sifted Summit, London, UK
Oct 5-6 Zebu Live, London, UK
Oct 7-8 DeGameFi, Tbilisi, Georgia (10% off VIP passes with VNTRVIP10)
Oct 8-9 Wow Summit, Dubai, UAE
Oct 12 LetsIgnite, Bengaluru, India
Oct 15-18 Expand North Star Dubai Harbour, UAE
Oct 16-20 GITEX Global, Dubai, UAE (free for qualified investors)
Oct 16-22 NY Tech Week, New York, USA
Oct 19-21 VC Weekend, Dubai, UAE
Oct 20-23 Plan B Forum, Lugano, Switzerland
Oct 22-24 Money 20/20, Las Vegas, USA
Oct 24-26 Digital Nigeria, Abuja, Nigeria
Oct 24-25 Blockchain Life 2023, Dubai, UAE
Oct 30-Nov 3 Solana Breakpoint, Amsterdam, Netherlands
Oct 30-Nov 5 Hong Kong FinTech Week, Hong Kong
Nov 7-10 Nearcon, Lisbon, Portugal
Nov 11-12 Australian Crypto Convention, Melbourne, Australia
Nov 13-16 Web Summit, Lisbon, Portugal
Nov 13 Europas, Lisbon, Portugal
Nov 13-17 AIBC Europe, Malta
Nov 14-16 SALT iConnections Asia, Singapore
Nov 15-17 Singapore Fintech Festival, Singapore
Nov 30-Dec1 SLUSH, Helsinki, Finland
Dec 4-5 Next Block Expo, Berlin, Germany
Dec 4-8 West Tech Fest, Perth, Australia
Dec 8-10 Art Basel, Miami, USA
If you would like to submit VC-related events, please respond to this email or Telegram @byuric
Follow us on Social media: Instagram, LinkedIn, Facebook, Flickr, and Twitter.
Check out VNTR Capital upcoming events
VC Reads
Are There Too Many VCs: Why 98% Are Average Or Mediocre?
The prevailing wisdom is that there is a shortage of venture capital (VC). Is this “wisdom” true? It depends on how you measure the shortage. If the “shortage” is measured based on entrepreneurs seeking capital, then yes. There is a shortage.
Entrepreneurial hopes always exceed the capital available. Entrepreneurs want growth. Growth requires skills or capital or both. Instead of skills, most entrepreneurs seek capital. Specifically, they seek early VC, which, unfortunately, is the wrong strategy:
Early VC is scarce and has been used by only 6% of billion-dollar entrepreneurs. Entrepreneurs should be using the vast array of potential financing sources that are more readily available.
94% of billion-dollar entrepreneurs took off without VC by using finance-smart skills. Business schools and all the assorted venture experts should focus on this method.
Fund performance data unhelpful for LPs when it counts
If an alternative asset manager delivers strong returns for investors with one fund, is that any indication they can do it again? Sometimes, but that information is of little value to LPs as they make decisions on where to invest their capital, PitchBook's quantitative analysts share in a new report. The performance of a general partner's previous private investment funds can predict future fund performance to a degree, but that's only with at least eight years of hindsight, according to PitchBook's latest Allocator Solutions report. In reality, LPs typically make decisions about where to commit fresh capital about three and a half years, on average, after a fund's predecessor has closed—making it too soon to know exactly how the GP's latest investments will pay out to existing LPs.
Are YC Valuations Really Too High?
With each cohort that graduates from Y Combinator, the same debate emerges: How can such early-stage startups justify such high valuations?
According to YC President Garry Tan, 75% of the current summer cohort is pre-revenue and 81% are looking at raising their first external capital. Many of the founders will have entered the accelerator without much more than an idea. Despite this, YC has developed a reputation for launching startups into the investment market at eye-watering prices. This is particularly striking in H2 2023, coming off a real downturn for startup fundraising. Investor Erik Bruckner has reported $15 million post-money caps as the most common terms among the sample of startups he’s met from this batch, at a time when the median U.S. pre-seed valuation is closer to $8.7 million.
15.2% of rounds completed in q2/23 were down rounds
Firstly, the median time between vc rounds increased by almost 30% over the past 12 months. Secondly, the early-stage demand-to-supply ratio hit an all-time low and rose by 85% over the past 12 months. Thirdly, VCs are applying more protective terms, such as liquidation multiples, cumulative dividends, and other structural terms that are more heavily dilutive for founders and existing investors. Lastly, 15.2% of the rounds completed in q2/23 were down rounds, an increase of 300% over the past 12 months.
But why, what are the drivers?
Private fund managers report feeling a squeeze on fees
Private fund managers have reported feeling pressure to reduce their fees in order to secure LP commitments amid a competitive fundraising environment.
Industry participants say private fund managers have had to offer larger-than-normal fee discounts over the first half of 2023 in order to secure commitments in a timely first or second close. "In the first half of this year, LPs seem to have had more leverage on fees," said Allan Majotra, the founder and managing partner at 5Capital Fund Placements. "We saw these GPs offer up to 25% discounts on both management fees and carried interest to select investors writing large checks to their funds—typically at a ticket size of 10% or more of the fund's target—before the first close."
VCs Who Wait Too Long For A Market Rebound Risk Losing Out On The Best Deals
The ongoing downward trend in venture funding has many founders desperately trying to secure their next round. Runways are running out, and many great startups with strong businesses and future prospects are willing to take a hit on valuations, and even take a downround, in order to continue operating. Venture funds, however, are waiting for the directional resolution needed to not only feel confident in the market rebound but also to provide their limited partners with a sense that deploying fresh capital into venture is the right move. Currently, everyone seems to be in a holding pattern waiting for this resolution.
New IPOs offer a true reflection of late-stage VC valuations
After about a year-and-a-half without liquidity prospects, investors and employees of some of the largest unicorns may see a glimpse of light at the end of the tunnel. Last week's IPO filings of Instacart and marketing automation company Klaviyo mean that once they debut, various types of investment activity—from new late-stage rounds and secondaries trading to other public offerings—are likely to see a pickup. That is in large part because there will finally be more clarity about what private companies are worth.
Since the tech downturn started in early 2022, buyers and sellers of private companies have been at loggerheads, each unwilling to accept the other's price. Venture investors have been pointing to valuations of previously VC-backed public companies, but they also want to see how newer IPOs price.
Zero-Billion Dollar Markets
In HBO’s Silicon Valley the obnoxious investor Russ Hanneman talks about the “Three Comma Club” in reference to the number of commas in a billion. In a recent Category Design workshop we held with Peter Goldie and Deborah Kattler Kupetz for our portfolio companies, we were introduced to the concept of the zero comma club, or the “Zero-Billion Dollar Market,” a concept they’d explored over past years that was popularized by Steve Vassallo of Foundation Capital, as well as endorsed by leading investors at Floodgate and Sequoia.
The notion of a Zero-Billion Dollar Market is that it’s something that you can see as an entrepreneur, but no one else believes. It's counterintuitive, and it's true. As we’ve talked about before, being both consensus and correct is wonderful in many parts of life, but not in entrepreneurship. If you’re trying to create something new and valuable then it’s generally down the less traveled path, against the grain, and certainly not wildly obvious to others. Value is located at the intersection of being both non-consensus, or contrarian, and also being correct.
As a founder, how do you address climate change?
It’s sometimes hard to remember that, as a startup founder, you have influence over aspects of your business that you wouldn’t have if you were a cog in a giant machine somewhere. In one of my past companies, we went very far out of our way to ensure that our packaging was fully biodegradable, but still a lot of fun. In another, we ensured that all our server use was carbon-offset. In a third, we had regular standups and brainstorms to figure out how we could have less of an impact on our planet. All of which is to say: As a startup founder, you have a beautiful luxury. You are the master of your destiny, and your passions and interests get to be those of your startup.
Raise Less, Build More
The conventional venture capital funding path – from raising an institutional Seed, Series A, B, C, D, E, etc, all the way to exit via IPO – has long been treated as gospel. Its verses are most heavily preached by VC board members, whose business model it also supports.
But there is an influential tide of founders on the rise that is opting out of this path and quietly plotting a new one that leads to building generational companies.
It’s a hybrid path, combining the growth of targeted venture funding with the durability found in bootstrapping (i.e. profitability). It’s a path with less venture capital and more self-reliance.
Most Active Venture Debt Funds For Indian Startups
As the Indian startup ecosystem continues to face a funding winter, the number of equity deals has significantly declined since last year. Consequently, many entrepreneurs are compelled to turn to debt as an alternative funding option. According to Inc42’s Startup Investor Landscape Report 2023, debt funding investment deals grew by 16% between 2017 and 2022. Today, there are over 50 venture debt funds in India, and more than 200 startups have raised debt funding since 2015. In addition, Inc42’s H1 2023 Startup Funding Report found that between January and June 2023, Indian startups raised a total of $260.7 Mn in debt funding.
AI could revolutionize human resources, but there are risks
As businesses globally grapple with the challenges of talent acquisition, employee retention and optimizing workplace dynamics, the potential of artificial intelligence (AI) to offer innovative solutions has become a focal point of discussion among human resources (HR) professionals. For many industry insiders and observers, AI’s integration into HR represents a promising fusion of data-driven efficiency and enhanced decision-making. Organizations increasingly turn to AI-driven tools to streamline processes that were once time-consuming and reliant on human intuition. For instance, sophisticated AI algorithms can sift through vast pools of job applications, identifying candidates whose profiles best match the job description. This has the potential to speed up the recruitment process and ensure that the shortlisted candidates are a closer fit to the company’s requirements.
The Trillion Dollar Crypto Opportunity: Real World Asset Tokenization
At what we hope is the end of a bitter crypto winter, history offers foresight that good times will return. According to the eminent professor Carlota Perez, technology is adopted in predictable waves — exuberant bubbles are followed by seemingly existential crashes prior to long "golden ages" of growth. We saw such a pattern back in 2001 when the so-called dot-com bubble burst and The New York Times declared that “Dot-com Is Dot-Gone and the Dream With It”. Fast forward to today and we have witnessed over two decades and trillions of dollars of sustained growth, together with the transformation of the old economy. This growth was punctuated, as Perez predicted, by bubbles and crashes approximately every 20 years.
Sustainable Seafood Startups Are The Catch Of The Day
If you want a delicious, affordable meal of fresh seafood that’s also humanely and sustainably procured these days, you’re kind of out of luck. The combination of overfishing and climactic upheaval have decimated populations of fish and other sea creatures worldwide. And while farm-raised seafood might look like a more sustainable alternative, there are big concerns around overcrowding and disease. Cell-based seafood, meanwhile, still looks years away from mass-market readiness. And vegan alternatives — fishy-tasting, textured plant products — don’t carry the same nutritional punch or broad consumer appeal as the real thing. The troubled state of the seafood industry today may help explain why we’ve seen quite a bit of capital flowing to startups aiming to improve on the status quo.
Future Fund was meant to save British startups. Now it risks bankrupting them
The UK government’s £1.14bn Future Fund was a lifeline created for British startups during the coronavirus pandemic. But what was supposed to help these fledgling businesses might now spell the demise of some. The programme was a flagship policy of now prime minister Rishi Sunak, then the country’s finance chief, and offered over a thousand startups cash through convertible loans. This kind of financing usually converts to equity at the next funding round — in the case of the Future Fund it should happen within three years. As private funding has become scarcer for startups, the three-year conversion deadline is now looming for hundreds of Future Fund-backed businesses. The terms of the Future Fund agreement say that if a startup fails to raise a priced round before that date, it must repay the full amount, plus a 100% “redemption premium”. Struggling companies either pay a bill double that which they borrowed — or face bankruptcy.
Bitcoin ETF Applications Are Bitcoin's Best Marketing Strategy
The biggest financial houses in the U.S. are peddling Bitcoin's message and don’t even know it. You see, modern-day marketing isn't confined to catchy ads or snappy slogans. It's about how a concept is presented, the narrative that's woven and the influence it exerts on decision-making. Today, bitcoin (BTC) is more than just “magic internet money” or lines of code — it's actually reshaping the way we think about finance across the board. At first, it might not seem like it but the recent buzz about bitcoin spot market exchange-traded fund (ETF) applications by heavyweight financial players like BlackRock, Fidelity Investments and VanEck is more than just noise — it's a strategic marketing move that's subtly rewriting the Bitcoin narrative.
IBM offers guidance for successful implementation of digital euro
IBM has some ideas about what it will take to make the digital euro a success, which it shared in a recent blog post. It suggested five items for designers to help the European Central Bank (ECB) digital currency “enter the highly competitive, multifaceted, and heterogeneous payments landscape in the Eurozone.” Some of IBM's points are already found in the European Commission (EC) legislative proposal. “Build on existing rails,” the first point, is already foreseen in the EC plan, although it can be extended, the five authors said. Simplicity will be key to initial adoption, they reasoned, and familiarity reinforces that. Intermediaries will also have a role to play in digital euro acceptance, and the digital currency should be designed to accommodate their needs.
Will the power of data in the AI era leave startups at a disadvantage?
If you read any news about business, technology or startups today, you’re almost certain to find at least one mention of AI. And with good reason: Tech is on the hunt for its next growth vector. Over the years, we’ve seen lots of interesting technologies strive for that mantle. From blockchain-based technology, to AR and VR for both consumer and enterprise applications, to creator-focused platforms, the list is long indeed. Most of those technologies, however, lost much of their luster when it became clear that it would take much longer than many expected for them to reach mass adoption. In some cases, the technology was not ready for everyday use, or it wasn’t as applicable for corporate or consumer usage as everyone thought. In many cases, they were simply too unwieldy to implement.
SEC gives GPs disclosure options for continuation funds
New SEC rules on GP-led secondary deals arms managers with disclosure options in addressing conflict of interest concerns. The SEC voted Aug. 23 to adopt new rules and amendments under the Investment Advisers Act of 1940, which regulates the private fund industry. Included in the new requirements is a mandate for private fund managers to obtain a fairness or valuation opinion when conducting a GP-led secondary transaction. In an attempt to provide more transparency to LPs without placing too heavy a burden on GPs operating in the burgeoning secondary market, the new regulation offers a looser standard than was initially proposed. In private equity, about 75% of GP-led secondary transactions in 2022 were structured as continuation vehicles, whereby the GP sets up a new fund to retain existing assets of a fund that is nearing the end of its lifespan.
Venture To Defense Tech Startups Still Lags, But Experts Say Interest Is Growing
Late last year, software and hardware tech startup Anduril made headlines when it closed a massive $1.5 billion Series E. While the raise was noteworthy for its size alone — it was the fourth-largest round raised by a U.S.-based startup last year — it also was eye-catching because it went to a defense and security firm. Defense tech as a sector historically has not drawn in the venture capital associated with many other tech industries. Crunchbase data shows that last year, U.S.-based defense tech startups saw only $2.1 billion invested in 53 total deals — and that includes Anduril’s $1.5 billion. For comparison’s sake, U.S.-based cybersecurity startups saw more than $10 billion invested last year. This year so far seems to paint an even bleaker picture, with less than $200 million going to defense tech startups domestically in 26 deals.
Many Boom-Era Startups Will Face A Fundraising Cliff In 2025
You can tell a lot about investors’ enthusiasm for a startup by the pace of its fundraising. A company that takes just months to go from one round to the next looks like a hot property. One that takes a couple of years is probably well-regarded, albeit maybe less buzzy. Once a few years pass with no new round raised, however, a startup’s shine has likely faded. If four or more years go by, the probability of ever raising a subsequent venture funding round falls precipitously. Eventually, you hit a cliff. That, at least, was the broad finding from a Crunchbase analysis of the time interval between Series A and Series B rounds for U.S. startups funded over the past 10-plus years. We found that the average time lapse between rounds was around 27 months and rarely extended far beyond 38 months.
The Week’s 10 Biggest Funding Rounds: Energy-Related Startups Spark Huge Rounds
This week didn’t see quite as many $100 million-plus rounds as the previous, but it somewhat made up for that with some huge ones. The two biggest this week totaled $1.7 billion. Not bad for what is usually a quiet, unofficial last week of summer.
Family Offices and Venture Capital - Market Pulse
I’ve spoken to 30 family offices over the past six weeks about their venture capital portfolio allocation.
Here are the 7 most controversial (and surprising) things I learned: venture capital landscape evolution, recent market volatility concerns, portfolio optimisation, liquidity needs, risk mitigation, portfolio rebalancing alignment with the investment mandate.
The Next Great SaaS IPO is Officially Coming: Klaviyo
So we’ve been saying for a while that the back half of 2024 could be good for SaaS IPOs, we just needed a few of the break-out winners to IPO to get the engine rolling again. The SaaS IPO window really closed in late 2021 with HashiCorp as the last great one to IPO in December 2021.
And now we have that first great IPO filing since 2021 — Klaviyo.
Who are the best seed investors in today's market?
First some definitions:
- Best: % of seed rounds converted to Series A ("getting on base")
- Seed investors: 20+ seed rounds in today's market
- Today's market: seed round announced since Nov 19 2021 (peak of Nasdaq QQQ) to today. ie in a post-correction world
Some global market data on seed rounds in today's market (from Crunchbase):
- # of seed rounds: 20k since Nov 2021
- # of seed rounds converted to Series A: 939 (5%)
- Average seed round size: $3.5m
- Median seed round size: $2.0m
Europe’s top 10 most active angel networks
Angel investing doesn’t have to be a lonely sport.
More and more solo investors are forming angel networks: groups that give their members access to more deals and the ability to write bigger cheques as a collective. Some of these groups are syndicates where angels can pool cheques on a deal-by-deal basis, whereas others take angel cash to set up official funds, which investors can then have a say in.
Some of the most sophisticated networks often also have in-house employees to take over the “boring” bits of admin — like due diligence or sifting through the sea of startups to find potential gems — leaving angels more time to give portfolio founders advice and intros.
How To Fill The European Funding Gap And Put Europe Back On The Map
Over the past 18 months, a significant portion of national economies within the European Union have encountered challenges. It is thus more relevant than ever to discuss the future value creation within our economies and how to safeguard the prosperity of our continent.
Undoubtedly, small and medium-sized enterprises (SMEs) serve as the backbone of Europe's prosperity. They contribute to nearly two-thirds of European jobs and play a profound role in driving economic growth and fostering innovation. Similar to the 1950s-1960s when SMEs relied heavily on external financing, mainly from banks, to fuel innovation, present-day SMEs and startups require funding to effectively commercialize and scale their innovation. Unfortunately, the existing regulatory framework hinders European institutional investors from participating in financing this growth. For Germany alone, this has led to a staggering €2 trillion SME financing gap projected until 2040 according to a study published by Lakestar last year.