Global Themes

On Globalization & Venture Capital

20-minute rule & the Global Entrepreneur

Richard Wallace, Chief Editor of EE Times Europe penned a great Op-Ed in last month’s issue (Nov 6 – 19) on “Doing better than the 20-minute rule”

Richard was referring to the well-known aversion of VCs to invest in regions and geographies that are not in close proximity to their base (see e.g. “It’s Not the People You Know. It’s Where You Are” and “The VC Stampede to Asia”)

Richard writes,

“Call me naïve but isn’t there more to capital’s role in the economic system that merely cloning Silicon Valley start-ups and creating safe harbors? Isn’t venture capital about risk, and the rewards that can accrue to risk takers across the full spectrum of the global economic system?”

He further says that Europe has been following the California model of VC investing for a much shorter time and therefore has less to feel defensive about. But,

“…in Europe the problem is exacerbated by the fact that technology-experienced entrepreneurs are only just starting to become high net-worth individuals,  potential VCs”

If you agree with Richard’s observation that “like capital, technology has no nationality, is constrained by no borders, and entrepreneurial-driven ‘ecosystems’ can thrive almost anywhere…”, the lack of attention to Asia amongst European VCs is puzzling.

Amongst “European” VC firms*, I know of only ourselves, Quester and 3i as firms that have been devoting time and resources to Asia over the past few years.

Richard’s conclusion is sobering:

“In the world of global technology story telling, there are a lot of great places to hunt.

Is the VC industry really that different, or is it just out of touch with the global entrepreneur?

Any remaining followers of the 20-minute rule – in Silicon Valley or elsewhere – beware”

P.S. I must mention here the work that Alpesh and Sheetal, both good friends, have been involved with for some time now. This is the Global Entrepreneur Programme of the UKTI. Its primary purpose is to help entrepreneurs choose UK as the base for their new venture and provide support & facilitation along the way…A rare example of bureaucratic foresight.

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* I am aware that Joe Golden at Accel and Gerard Montanus at Atlas have been travelling to China a lot and George at Benchmark + Sonali at Atlas are both well familiar with India…but Accel, Atlas and Benchmark all came to Europe from US and I assume (therefore) are more plugged into “globalization” and what it means for venture firms than their counterparts in Europe.

January 6th, 2007 Posted by | Entrepreneurship, Globalization | no comments

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