Last month, at the same time as London-based venture capital firm Felix Capital announced it was closing its fourth and newest fund of $600 million in capital commitments, we had a separate conversation with Felix founder Frederic Kurt about how competition in Europe has changed, given the Several US venture capital firms have opened offices on the continent, including Sequoia Capital, Lightspeed Venture Partners, Bessemer Venture Partners, and General Catalyst.
Unsurprisingly, Kurt says the expanded range of options is great for founders. He also told us that most European investors would rather stay with European companies or start their own stores where they can have a greater impact. We thought it was an interesting part of longest discussion; The excerpts below have been edited for length.
TC: A lot of the big US companies have set up stores in Europe over the past 18 months or so. How is all this interest affecting your business locally?
FC: Many of these companies we already know very well. They hire people who are already more invested in Europe [venture] platforms. All in all, it’s great for entrepreneurs in Europe [and] A reflection of the evolution of the market.
Here, we’ve seen more ambition, more talent and obviously more capital in the last few years as Europe has started to build not just local champions but global champions like Spotify, Adyen and Farfetch, which I’ve been fortunate to participate in from day one as an investor. So, yes, there is more competition, but there is also more choice for founders.
I mentioned these companies hiring from other platforms, although I read somewhere that they had some problems with hiring due to not enough general experienced investors at partner level in Europe and also because the mentality is different from venture capitalists in the States The United States has – even more recently – focused on growth, while European venture capital has been more focused on de-risking. Is any of this resonance true for you?
I think a lot of this is true. The truth is that we are in an industry where it takes time to measure success. I mean, I’ve been in venture capital for over 20 years. There are not many of us. There is unique [Destin] Who started Stride.VC and [investors at] Accel and Index who have been in the field for over 20 years and have a proven track record, but it is a very small community. So there is a lot of great emerging talent but with less data for success, and as a result, yes, it may have been difficult for people to hire.
I think it is also likely that there will be sentiment from many investors in Europe [that] They don’t necessarily just wait until they are hired by US companies. They desperately want to build local businesses. When we released Felix [in 2015] We have found tremendous support from friends in the US who connect us with them [limited partners] Because when I started, I had no LP connections. But we also found a lot of local support from people willing to sponsor local co-investors that they can work with well. So it is not necessarily obvious that a European investor suddenly joins a new team and where decisions are made, for the most part, in the US [compared with the opportunity they have to] To be part of the European platforms and have a greater impact.
I have no doubt that many people on our team are getting calls. We talk quite frankly about it. Honestly, the hardest thing about running a project company is team building. [But] We have a certain way of doing things; We are very much a “us” versus “me” culture. We’ve had a few great people who came and joined our company, and then moved on with great success, but the people who stayed and the people who joined recently are very drawn to this team culture. We choose our battles together, we win them together and we lose them together. This is a culture I wanted from the start. Even our fundraising is done in a very open manner, with a list of all our investors available for [entire] Team. We don’t feel like we need to be secretive out there.
You say there is complete transparency in your LP base across the company. Are you trying to make the point that other companies might be more cautious about this, since a lot of people are going to start their own companies?
LP relationships are usually completely protected from the rest of the team [but] We have been very open with our investors in connecting them with the different team members in order to get to know them and also to validate what I just described to you – that we operate in a transparent manner and make decisions together.
Also, personally, it’s a bit of a job that I’ve been through quite a bit lately, and I wish I could [been exposed] earlier. It’s a very important part [of being a VC] It is not discussed much. If you are joining some of the big companies I mentioned, not many partners or investors will be involved in fundraising right away because these companies are like machines in terms of fundraising. [based on] Strong performance in the past. When you’re starting from scratch, the first six months to one to two years often focus on fundraising, so it’s an essential skill set, and we want our fellow professionals to know the team and vice versa. It is an option to do it this way.