The article discusses a conversation between two venture capital (VC) experts, Connie Loizos and her guest speakers, about the European VC market. They highlight several key points:
- Late-stage funding gap: The European VC market is struggling to fund companies beyond the early stages. They are only funding a quarter of Series B and C deals compared to Silicon Valley.
- Comparison with Silicon Valley: Loizos notes that the European ecosystem is about 20 years old, whereas Silicon Valley is 53 years old. This means Europe is still catching up in terms of dealmaking.
- Benefits of smaller market: The lack of late-stage funding forces European companies to be leaner and more efficient, resulting in lower volatility and a more symmetric market.
- Less money wasted on overvalued startups: Loizos suggests that the smaller market may actually be beneficial as it prevents the wasteful deployment of capital into overpriced startups.
Some other points mentioned in the article:
- The European VC market is focused on policy solutions to address the funding gap, but ultimately, great companies will drive investment.
- Silicon Valley’s expertise lies in writing off late-stage investments that don’t pan out, as long as they have winners that compound at scale and provide significant returns.
Overall, the conversation highlights the challenges facing the European VC market, particularly when it comes to funding larger deals. However, it also suggests that these limitations may ultimately lead to a more sustainable and efficient market.