My VC and your VC sitting by the fire….

For exits over US$100m in market cap, more than one in four of the winners are European. For those US$100m-plus exits where the exit market cap is better than five times the capital invested (aka home runs), which are meant to be the attractive feature of the US VC industry, over one in three are European. The most compelling statistic is the capital efficiency with which European VCs operate. Of the US$100m-plus exits, the average exit is US$251m both in the US and Europe – so there seems to be no discount for European companies. However, the average European exit has taken US$40m of VC backing – almost half the average US$70m that US VCs have invested to build the same value companies. These figures are very interesting because the idea of a cheaper single home market advantage in the US is an excuse often given by institutional investors who want to dismiss the European VC market. The truth is that the home market advantage simply doesn’t exist because European VCs are building companies into winners with half the capital outlay.

For more on this topic see “European VCs emerge from the shadows” in the analysis section.