Global Themes

On Globalization & Venture Capital

Entrepreneurship, Europe and anti-smoking laws…

Came across Dave Hornik’s post on Entrepreneurship in Europe this morning – and Fred Destin’s rebuttal

I am more on Fred’s side in this debate. Although European entrepreneurship does need a lot of support to realise its full potential, the industry is barely a decade old and a comparison with Silicon Valley, even in the best of times, is unfair and possibly off the mark. 

In his critique, Dave seems to have overlooked a thriving angel community in Cambridge, UK and a very substantive eco-system that is being built up – particularly in London, where several of the names that he has mentioned in his post are present in strength. 

That said, the ecosystem is not as robust as the Valley – but then Europe has not gone through the multiple cycles yet and the industry is still maturing. 

What does this mean for entrepreneurs in Europe? 

One, things are changing – and changing very rapidly – for the better. 

Two, there are sectors within technology where Europe has a pre-eminent position –such as wireless, mobile, broadband, smartcards and med-tech (and to some extent new materials).  If you are in any of these areas, you are probably better off being in Europe at the moment. 

Even if you are not, with the communication tools available today (and the falling cost of air travel), there is no reason for you not to consider Europe as the base for your company.  In truth, most successful companies of tomorrow will have to be multi-location…and Amsterdam, Paris or London are probably as good as (and culturally more richer than) Sunnyvale, San Jose or even San Francisco for your company’s headquarters. 

But then, I forget anti-smoking laws, which, in Robert Scoble’s opinion, will be the real reason that entrepreneurs move to San Francisco!     



August 3rd, 2006 Posted by | Entrepreneurship, Venture Capital in Europe | 4 comments


  1. I’ll agree, cambridge rocks but it’s not paris.
    We have to work out the first time team thing 😉 elsewhere.
    Fred’s examples are “top guns” ones.

    Comment by leafar | August 3, 2006

  2. Amongst factors that shape the environment are also societal attitude to risk and failure, and institutional frameworks that aid or deter innovation and entrepreneurship. In Europe, for instance, no equivalent of the Bayh-Dole Act of the US exists making it a bit cumbersome to ‘translate’ research into ‘enterprise’. Labour laws in Europe also play a role in hiring teams more thoughtfully and I would hypothesise hinder quick scaling up of businesses. Any other thoughts?

    Comment by S Y | August 4, 2006

  3. I agree with the point re. societal attitudes…but they are difficult to change. More can be done about institutional frameworks – I’m not sure governments really “get it” though. So, we are down to pure happenstance – which is difficult to plan for!

    Comment by Shantanu | August 6, 2006

  4. Much work in changing framework conditions in the UK and Europe has so far happened in driving individuals’ wealth, through instruments such as VCTs, as capital to VC firms so that they can invest further. There are some incentives for small firms and businesses in the form of tax but nothing like the Small Business Grants programme in the USA.

    It would be hard to argue conclusively whether societal attitudes are totally dissociated with framework conditions. If society was more accepting of failures, free markets, free movement of labour etc, there would be ample pressure on regulators to comply.

    Comment by S Y | August 8, 2006

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