European VC Firms Investing in U.S.
If you're expanding your business to European markets, you might consider looking overseas for the capital you need. Many European VC firms are funding U.S.-based companies: A 2007 Deloitte survey found that 58 percent of the non-U.S. VC firms surveyed reported they were investing abroad.
European VC investment stayed relatively strong in the economic downturn. Foreign VC firms invested more than $682 million in new venture deals in the second quarter of 2008, down just 15 percent from the same quarter in 2007, according to a European Venture Capital Association study.
While the EVCA estimates that the European VC community is only about one-fifth the size of the U.S. scene, it can be a good place to find funding. So how can you tap European venture capitalists? A few pointers:
- Tech is hot. The vast majority of European investment is in the technology sector, with clean tech and green tech companies being particularly popular, says David Ward, co-managing partner of London-based MTI Partners Limited. "Venture capital has moved on from being regional," Ward explains. "It's a global business, and we need to be on the ground to support our companies, wherever they are."
- Network with U.S. venture capitalists to connect. That's how Chelmsford, Massachusetts-based virtual-meeting company Dimdim hooked up with leading European VC Index Ventures, says Dimdim CEO and founder DD Ganguly, 41. After connecting with VC group Nexus India, 2-year-old Dimdim got referred to Index Ventures by Nexus execs. Index Ventures was a lead investor in a $6 million round of funding Dimdim closed last July.
- Have a strong European story. European venture capitalists want to invest in U.S. companies that are already on their turf or planning to expand there, says Anne Glover, co-founder and CEO of Amadeus Capital Partners in London. They want companies that can benefit from their home-market expertise.