Dow Jones VentureSource 4Q’14 U.S. Venture Capital Report

The following report presents Dow Jones VentureSource’s quarterly findings for U.S. venture capital fundraising, investment, valuation, and liquidity. Charts and graphs available here offer a comprehensive view of the trends currently affecting the venture capital market. 

Highlights for 4Q 2014 include: 

U.S. venture capital fundraising rose both in number of funds and amount invested;
Venture capital investment into U.S. companies experienced a quarter-over-quarter increase; Median pre-money valuation increased 30% from 3Q 2014 and more than doubled the 2013 value;
Amounts raised through both Initial public offerings (IPOs) and mergers and acquisitions (M&As) experienced an increase from the previous quarter.

FUNDRAISING 

Venture Fundraising Increases in U.S. during 4Q 2014 

85 funds garnered $8.1 billion in 4Q 2014, a 25% increase in the amount raised and also a 4% rise in number of funds from the prior quarter.
Venture capital funds have raised a total of almost $33 billion across 332 funds in 2014, up 62% from the total amount raised in 2013 and 27% in number of funds.
Tiger Global Private Investment Partners IX LP was the largest U.S. venture capital fund of 4Q 2014 raising $2.5 billion and accounting for 31% of the total amount raised during the quarter.
Median U.S. fund size was $110 million in 2014.

 

FINANCING 

U.S. Venture Investment on the Rise in 4Q 2014 

U.S.-based companies raised $13.8 billion from 814 venture capital deals in 4Q 2014, an increase in capital (24%) despite deal flow dropping 12% from the previous quarter.
Compared to the same period in 2013, number of deals decreased 20%, while amount invested registered a 44% increase.
In 2014, 3682 deals have been completed raising $52 billion, a respective 4% decrease and 47% increase on figures posted in 2013. 

Equity Financings into U.S.-based, VC-backed Companies, by Industry Group (4Q 2014) 

Consumer Services saw the largest investment allocation, with 159 deals garnering almost $3.8 billion and accounting for 27% of total equity investment.
Information Technology (IT) raised the second highest proportion of investment for 4Q’14. IT companies drew $3.3 billion across 245 deals, up 52% and 13% from respective 3Q’14 figures.
Business and Financial Services placed third with $3.2 billion in 206 deals, increasing 4% from the $3.1 billion accumulated in the previous quarter, despite a 23% drop in number of deals.
$2.5 billion were raised by the Healthcare sector in 143 deals, down both in capital invested and deal flow (8% and 23%, respectively).
In 2014 as a whole, Business and Financial Services took a 26% share of investment ($13.7 billion), IT a 24% ($12.3 billion), Consumer Services a 23% ($11.9 billion), and Healthcare a 21% ($11 billion).

LIQUIDITY 

Venture M&A and IPO Market Activity in the U.S. during 4Q 2014 

Mergers and acquisitions (M&As) of venture-backed companies increased by 60% from 3Q 2014, with 102 deals garnering $32 billion.
Initial public offering (IPO) activity increased in 4Q 2014 raising $3 billion, up 134% from the previous quarter.

U.S. VC-backed M&As (2011-2014) 

102 M&As raised $32 billion during 4Q 2014, a 60% increase in M&A valuations despite the number of deals decreasing 23% compared to the previous quarter, when 132 M&As garnered $20 billion.
The largest M&A of the quarter was WhatsApp Inc., which was acquired by Facebook (NASDAQ: FB) for $19 billion.
483 M&As were completed for venture-backed companies in the U.S. during 2014, up 8% from the 449 completed during 2013 and 2% from the 473 seen during 2012.

U.S. VC-backed IPOs (2011-2014) 

21 venture-backed companies raised $3 billion through public offerings in 4Q 2014. Number of listings decreased by 5%, while capital raised more than doubled the amount from the previous quarter.
The largest IPO of the quarter was LendingClub Corp. (NYSE: LC), which completed a $870 million IPO.
2014 saw the highest number of US VC-backed IPOs since 2000, when 210 were completed. During 2014,105 companies garnered a total of $9.2 billion, an increase of 42% and 12% from respective 2013 figures.

Dow Jones VentureSource 4Q’14 Europe Venture Capital Report

The following report presents Dow Jones VentureSource’s quarterly findings for European venture capital fundraising, investment, valuation, and liquidity. Charts and graphs  available here offer a comprehensive view of the trends currently affecting the venture capital market. 

Highlights for 4Q 2014 include:
European venture capital fundraising experiences uptick from 3Q 2014, but suffers declines in both fund closings and euros raised for the 12 month period;
Venture capital investment into European companies falls from 3Q 2014, but improves by a quarter year over year;
Despite an overall fall in exit activity, the total amount raised through venture-backed Initial public offerings (IPOs) reached its highest point since 2Q 2000. 

FUNDRAISING 

European Venture Capital Fundraising Experiences Uptick in 4Q 2014 

18 European venture capital funds accumulated €927 million during 4Q 2014, an increase of 33% in euros raised and 20% in the number of funds with closings from 3Q 2014.
Despite the uptick in fundraising from 3Q 2014, the number of funds with closings during 4Q 2014 fell by 51% compared with the same period last year, while euros raised fell by 49%.
The largest fund of the quarter was Principia SGR’s Fund III which raised €160 million, accounting for 17% of the total amount raised for 4Q 2014.
Overall, the number of fund closings in 2014 was down by 4% to 76 from the year prior, while the total amount raised by venture funds fell by 18% from 2013 to €3.4 billion. 

FINANCING 

Investment into European Venture-backed Companies Falls in 4Q 2014 

Equity Financings into Europe – based, VC-backed Companies (2011 – 2014)

European companies raised €1.8 billion for 332 deals during 4Q 2014, a fall of 24% in the amount raised from 3Q 2014 despite just five fewer deals being completed.
In contrast with the year ago period, investment improved by 1% despite a 28% reduction in the number of completed deals.
In 2014 as a whole, European venture-backed companies attracted €7.9 billion across 1460 deals, a decline of 11% in deals completed from 2013 but an improvement of 25% in euros invested.

Equity Financings into Europe-based, VC-backed Companies, by Industry Group (4Q 2014) 

Business and Financial Services received the largest allocation of investment during 4Q 2014 (32%), accumulating €557 million through 80 deals. The sector remained the most attractive sector despite investment dropping by 41% from 3Q 2014. Deal flow remained flat.
Healthcare rose to second in terms of equity financing, taking a 30% share of all 4Q 2014 investment. The sector raised €535 million across 60 deals, an increase of 64% in capital raised and 25% in deals completed from the previous quarter.
Consumer Services was pushed down to third, with companies in the sector gathering 18% of the total amount invested for the quarter. The sector received €327 million across 96 deals; a fall of 53% and 3% from 3Q 2014 in capital invested and deal flow respectively.

Equity Financings into Europe-based, VC-backed Companies, by Country (4Q 2014)
The United Kingdom was the most favoured destination for equity financing during 4Q 2014, receiving €524 million across 69 deals. The country took in 30% of all investment into European VC-backed companies for the quarter.
Germany placed second, capturing 18% of European investment. Investment fell by 73% from the prior quarter to total €322 million. Deal flow remained relatively stable, however, with 66 completed.
The Netherlands rose to third position raising €243 million, a 14% share of investment. France placed in fourth position with a 12% share, raising €218 million during 3Q 2014.

LIQUIDITY 

Europe Sees Overall Decrease in 4Q 2014 Venture Exit Activity 

Exit Opportunities for European VC – backed Companies
(2011 – 2014)

42 venture-backed M&As took place in Europe during 4Q 2014, down 9% from 3Q 2014 but one up on the figure for 4Q 2013.
The largest M&A for 4Q 2014 was Belgium’s Clear2Pay NV, an e-payment solutions provider, which was acquired by Fidelity National Information Services for €375 million.
55 venture-backed IPOs took place during 2014, tripling the number of listings seen across Europe in 2013. 201 M&As were completed during the course of 2014, a 21% increase on the 166 that took place during 2013.

European VC-backed IPOs (2011-2014) 

10 IPOs were completed during 4Q 2014, a decline of 38% from the previous quarter’s total but an increase of one on those completed during 4Q 2013.
IPOs raised €2.3 billion during 4Q 2014, more than six times the figure seen in 4Q 2013 and the highest sum since 2Q 2000 when 71 IPOs raised a total of € 3.8 billion.
The largest European VC-backed IPO of 4Q 2014 was Rocket Internet AG’s October listing on the Frankfurt Stock Exchange. The company raised a total of €1.4 billion, accounting for 62% of the total amount raised through European venture-backed company IPOs for the quarter.

Dow Jones VentureSource China | 4Q | 2014 Venture Capital Report

The following report presents Dow Jones VentureSource’s quarterly findings for Chinese venture capital fundraising, investment, valuation, and liquidity. Charts and graphs available here offer a comprehensive view of the trends currently affecting the venture capital market.

Highlights for 4Q 2014 include: 

Chinese venture capital fundraising fails to improve on previous quarter, however, total fundraising for year more than doubles that of 2013; 

Venture capital investment into Chinese companies more than doubles 3Q 2014 total 

Overall exit activity improves from 3Q 2014 despite fall in mergers and acquisitions (M&As) as Initial public offerings (IPOs) rally in both number of offerings and dollars raised.

FUNDRAISING 

Chinese Venture Capital Fundraising Fails to Improve in 4Q 2014 

Chinese venture fundraising declined to $339 million across 9 funds during 4Q 2014. The quarter represents the lowest fundraising accumulation since 2Q 2013 when six funds raised just $140 million.
In comparison with the same period last year, dollars raised fell by 57% while the number of venture funds completing closings declined by 25%.
Le Fund’s II fund and Arbor Ventures’ fund I were the joint largest of 4Q 2014, raising $100 million apiece, accounting for 59% of the total amount for the quarter combined.
Looking at the year as a whole, however, 2014 has surpassed the previous year both in terms of dollars raised and the number of completed closings, improving by 131% and 8% respectively.

Chinese VC Fundraising 30 (2011 – 2014)

FINANCING 

Venture Capital Investment in China - 4Q 2014 

Equity Financings into China– based, VC-backed Companies (2011 – 2014)

Chinese venture-backed companies raised close to $6.8 billion in 243 deals during 4Q 2014, an increase of 128% in capital invested from 3Q 2014 with a 17% rise in the number of deals completed.
Compared with 4Q 2013, dollars invested more than quadrupled while deal flow increased by 79%.
Investment in venture backed companies in 2014 dwarfs that of 2013, with $15.5 billion raised compared with $4.8 billion. Similarly, deal flow has also increased significantly, from 439 to 740, equating to an increase of 69%.

Equity Financings into China-based, VC-backed Companies, by Industry Group (4Q 2014) 

Consumer Services companies took $3.7 billion through 110 deals during 4Q 2014, a rise of 91% in dollars invested from 3Q 2014 with a 10% increase in deals completed. The sector attracted 46% of all deals completed for the quarter and a 55% share of total amount invested.
The Information Technology sector placed second for investment, receiving $2.3 billion across 76 deals. Sector investment quintupled from 3Q 2014 as deal flow improved by 55% to a total of 32% of all deals completed for the quarter. The investment figure represents a 34% share of total equity financing into China-based VC- backed companies for 4Q 2014.
Business and Financial Services companies raised the third highest proportion of investment during 4Q 2014. The sector garnered $469 million across 38 deals, generating 16% of all deals for 4Q 2014; a 23% rise in dollars invested from 3Q 2014 despite deal flow remaining flat .

LIQUIDITY 

Chinese VC-backed IPOs (2011-2014) 

14 VC-backed companies went public during 4Q 2014 in China, an increase of 56% on 3Q 2014 and 17% on 4Q 2013.
HuaDian Heavy Industries had the largest IPO of the quarter, raising $245 million for its December listing on the Shanghai Stock Exchange. The material handling equipment provider’s IPO represents 19% of the total raised through VC-backed IPOs in China during 4Q 2014.
A total of $1.31 billion were raised through Chinese VC-backed IPOs in 4Q 2014, a rise of 24% from the previous quarter. A total of $7.2 billion has been raised through listings during 2014, dwarfing the $2 billion raised in 2013 and the most since 2011 when $15.7 billion were raised through 100 IPOs.

Dow Jones VentureSource 3Q’14 U.S. Venture Capital Report

The following report presents Dow Jones VentureSource’s quarterly findings for U.S. venture capital fundraising, investment, valuation, and liquidity. The included charts and graphs offer a comprehensive view of the trends currently affecting the venture capital market.

Highlights for 3Q 2014 include:

U.S. venture capital fundraising amount raised on decline from 2Q 2014;
Venture capital investment on decline in 3Q 2014;

Median pre-money valuation totaled $30M, a 42% decrease from the valuation figure for 2Q 2014;

While venture-backed mergers and acquisitions (M&As) amount raised and transactions experienced an increase, initial public offerings (IPOs) still on decline.

FUNDRAISING

Venture Fundraising in U.S. on decline from 2Q 2014

81 funds garnered $6.5 billion in 3Q 2014, down 16% from the amount raised in the previous quarter, while
number of funds stayed flat.

JP Morgan Digital Growth Fund II LP was the largest U.S. venture capital fund of 3Q 2014, raising $996 million and accounting for 15% of the total amount raised during the quarter.

Median U.S. fund size was $119 million in the three quarters of 2014.

FINANCING

U.S. Venture Investment on Decline in 3Q 2014

U.S.-based companies raised $11 billion from 899 venture capital deals during 3Q 2014, a 24% and 7% decrease in capital and deal count, respectively, from the previous quarter.

Compared to the same period in 2013, amount invested registered a 16% increase, while number of deals dipped 5%.
Business and Financial Services and Healthcare were the strongest sectors, respectively with 27% and 25% share of total amount invested.

FINANCING

Equity Financings into U.S.-based, VC-backed Companies, by Industry Group (3Q 2014)

The Business and Financial Services sector saw the largest investment allocation, with 247 deals garnering $3 billion and accounting for 27% of total equity investment.

Healthcare raised the second highest proportion of investment for 3Q’14 - $2.7 billion into 182 deals, down 17% and 15% in dollars and deals, respectively, from 2Q’14 figures.

Consumer Services occupies third position. Amount raised decreased 41% quarter over quarter, with $2.3 billion invested in 173 deals, a 3% drop also for the number of deals. The sector’s investment figure represents a 21% share of total equity investment into U.S. VC-backed companies for the quarter.

IT companies raised $2.1 billion across 221 deals, a 31% and 9% decrease compared to the previous quarter.

LIQUIDITY

Venture M&A and IPO Market Activity in the U.S. during 3Q 2014

Mergers and acquisitions (M&As) of venture-backed companies in 3Q 2014 increased by 73% in value from those completed in 2Q 2014, with 127 deals garnering $20 billion.

22 venture-backed IPOs took place during 3Q 2014, a 12% decrease from the previous quarter.

U.S. VC-backed M&As (2011-2014)

127 M&As of venture-backed companies in U.S. garnered $20 billion during 3Q 2014.

In contrast with 2Q 2014, when a total of 119 transactions accumulated almost $12 billion, both number of M&As and amount raised increased by 7% and 73% respectively.

The largest M&A of the quarter was Beats Electronics LLC, which was acquired by Apple Inc. (Nasdaq: AAPL) for $2.5 billion.

U.S. VC-backed IPOs (2011-2014)

22 venture-backed companies raised $1.3 billion through public offerings in 3Q 2014. Number of deals decreased by 12% and capital raised also registered a 40% decrease from the previous quarter.

The largest IPO of the quarter was HealthEquity Inc. (NASDAQ: HQY), which completed a $127 million IPO. 

Dow Jones VentureSource 3Q’14 Europe Venture Capital Report

The following report presents Dow Jones VentureSource’s quarterly findings for European venture capital fundraising, investment, and liquidity. The included charts and graphs offer a comprehensive view of the trends currently affecting the venture capital market.

Highlights for 3Q 2014 include:

European venture capital fundraising declined from 2Q 2014 but managed to exceed 3Q 2013 levels;

Venture capital investment into European companies improved for the second consecutive quarter to reach highest quarterly investment figure since 3Q 2001;

As merger and acquisition (M&A) activity stayed flat, exits via initial public offerings (IPOs) fell short of 2Q 2014 levels but remained comfortably above those of 3Q 2013.

FUNDRAISING

European Venture Capital Fundraising Declines in 3Q 2014

A total of 15 European venture capital funds accumulated €600 million during 3Q 2014, a decrease of 42% in euros raised and 25% in the number of funds with closings from 2Q 2014.

Despite a decline in fundraising from 2Q 2014 levels, the number of funds with closings during 3Q 2014 increased by 50% compared with the same period last year while euros raised increased by 20%.

The largest fund of the quarter was Advent Venture Partners’ Life Sciences II LP fund, which raised €114.6 million, accounting for 19% of the total amount raised for 3Q 2014.

FINANCING

Investment into European Venture-backed Companies Improves in 3Q 2014

European companies raised €2.3 billion for 323 deals during 3Q 2014, an increase of 3% in the amount raised, despite a 17% fall in the number of deals completed from the previous quarter. 3Q 2014 saw the highest quarterly investment figure since 3Q 2001 when €2.7 billion were raised.

In contrast with 3Q 2013 figures, despite deal flow decreasing by 15%, investment improved by 36%.

So far in 2014, European venture-backed companies have attracted €6.1 billion across 1089 deals, a decline of 6% in deals completed from the first nine months of 2013, but a rise of 38% in euros invested.

Equity Financings into Europe-based, VC-backed Companies, by Industry Group (3Q 2014)

The Business and Financial Services sector received the largest allocation of investment during 3Q 2014 (40%), accumulating €927 million through 76 deals. Despite deal flow dropping by 36% from 2Q 2014, sector investment rose by 68%.

Consumer Services placed second in terms of equity financing, taking a 30% share of all 3Q 2014 investment. The sector raised €680 million across 98 deals, a decline of 12% in capital raised and 13% in deals completed from the previous quarter.

Healthcare remained third, with companies in the sector gathering 15% of the total amount invested during the quarter. The sector received €351 million across 48 deals, representing a 20% drop in deal flow and a 26% fall in capital invested from 2Q 2014.

Equity Financings into Europe-based, VC-backed Companies, by Country (3Q 2014)

Germany became the most favoured destination for equity financing during 3Q 2014, receiving €1.2 billion across 60 deals. The country took in 53% of all investment into European VC-backed companies for the quarter.

The United Kingdom placed second, capturing a 23% share of European investment. Deal flow declined by 9% from 2Q 2014 with 90 completed, while investment fell by 11% from the prior quarter to total €526 million.

Switzerland occupies third spot raising €136 million, a 6% share of investment. France placed in fourth position with a 5% share, raising €113 million during 3Q 2014.

LIQUIDITY

Europe Sees Overall Decrease in 3Q 2014 Venture Exit Activity

A total of 41 venture-backed M&As took place in Europe during 3Q 2014, down one from 2Q 2014 and level with 3Q 2013.

The largest M&A of 3Q 2014 was VK.Com Holdings Ltd., a Russian social network provider, which was acquired by Mail.ru Group Ltd. for €1.1 billion.

Sixteen venture-backed IPOs took place during 3Q 2014, five fewer than in 2Q 2014 but a significant increase on the three completed during 3Q 2013.. Companies raised €447 million for their listings during 3Q 2014, a decline of 15% from the €530 million raised in 2Q 2014. The figure, however, dwarfs the €26 million raised through public offerings during 3Q 2013.

The largest European VC-backed IPO of 3Q 2014 was ProQR Therapeutics BV’s September listing on the NASDAQ. The company raised a total of €72 million, equating to 16% of the total amount raised through European venture-backed company IPOs for the quarter. 

Dow Jones VentureSource 3Q’14 China Venture Capital Report

The following report presents Dow Jones VentureSource’s quarterly findings for Chinese venture capital fundraising, investment, and liquidity. The included charts and graphs offer a comprehensive view of the trends currently affecting the venture capital market.

Highlights for 3Q 2014 include:

Chinese venture capital fundraising sees substantial decline, falling to its lowest dollars raised level since 2Q 2013;

Quarterly venture investment takes dip from 2Q 2014; however, deal flow continues upward trend to reach record high;

Venture exit activity declines as number of mergers and acquisitions (M&As) and initial public offerings (IPOs) fall from 2Q 2014. Exit activity still surpasses that of the year-ago period, however.

FUNDRAISING

Chinese Venture Capital Fundraising Experiences Substantial Decline in 3Q 2014

Chinese venture fundraising declined significantly to $403 million across 9 funds during 3Q 2014. The quarter represents the lowest fundraising accumulation since 2Q 2013 when six funds raised just $136 million.

In comparison with the same period last year, dollars raised fell by 54% while the number of venture funds completing closings declined by 18%.

Olympus Capital Holding Asia’s Environmental Partners II fund was the largest of 3Q 2014, raising $152.85 million, accounting for 38% of the total amount for the quarter.

FINANCING

Venture Capital Investment in China - 3Q 2014

Chinese venture-backed companies raised $2.8 billion in 195 deals during 3Q 2014, a 5% decline in capital invested from 2Q 2014 despite a 50% increase in the number of deals completed.

Compared with 3Q 2013, however, dollars invested rose by 88% while deal flow increased by 61%.

Investment for the nine-month period dwarfs that of the equivalent 2013 timeframe, with $8.1 billion raised compared with $3.2 billion. Similarly, deal flow has also risen, from 282 to 442, equating to an increase of 57%.

Equity Financings into China-based, VC-backed Companies, by Industry Group (3Q 2014)

Consumer Services companies took $1.8 billion through 91 deals during 3Q 2014, an increase of 40% in deal flow but a dip of 1% in dollars invested from 2Q 2014. The sector attracted 48% of all deals completed for the quarter and a 66% share of total amount invested.

The Business and Financial Services sector placed second for investment, receiving $414 million across 35 deals. Sector investment declined by 18% compared with 2Q 2014 despite deal flow improving by 46%. The investment figure represents a 15% share of total equity financing into China-based VC-backed companies for 3Q 2014.

The Information Technology sector raised the third highest proportion of investment during 3Q 2014. IT companies garnered $377 million across 48 deals; a 9% rise in dollars invested from the prior quarter and a 66% increase in the number of deals completed.

LIQUIDITY

Venture M&A and IPO Market Activity in China (3Q 2014)

M&A activity for venture-backed companies in China fell in 3Q 2014 to six from seven completed during the previous quarter, but stayed flat compared with 3Q 2013. A total of 17 M&As have been completed in the first nine months of 2014, one up from the equivalent 2013 period.

The largest M&A of the quarter was Chinese Universe Publishing & Media’s acquisition of mobile games platform developer Beijing Elex Technology Co. Ltd. in July for $429 billion.

Nine VC-backed companies went public during 3Q 2014 in China, a decline of 18% from the previous quarter. Total dollars raised in VC-backed IPOs fell substantially from 2Q 2014, by 61% to $1.06 billion.

Nine VC-backed companies went public during 3Q 2014 in China, two fewer than in 2Q 2014 but eight more than the single listing completed during the third quarter of 2013.

A total of $1.06 billion were raised through Chinese VC-backed IPOs in 3Q 2014, representing a decrease of 61% from the previous quarter. A total of $5.9 billion have been raised in IPOs during the first nine months of this year, the most since the equivalent period of 2011 when $13.9 billion were raised.

Guangdong Ellington Electronics Technology Co. Ltd. had the largest IPO of the quarter, raising $222 million for its July listing on the Shanghai Stock Exchange. The printed circuit board manufacturer’s IPO represents 21% of the total raised through VC-backed IPOs in China during 3Q 2014.

EUROPEAN VENTURE CAPITAL: MYTHS AND FACTS

The British Private Equity & Venture Capital Association (BVCA), in association with Dow Jones, has published a report which takes aim at some of the most common misperceptions of the European venture capital market.

There is a widely held view among institutional investors and policy-makers that Europe is lagging behind the US in respect to the financing of entrepreneurship. Many of these attitudes were formed in the immediate aftermath of the dot.com bubble but have persisted over the course of a decade despite significant changes and performance improvements within the European venture capital and entrepreneurial communities.

This new study - written by Dr. Ulf Axelson and Milan Martinovic of London School of Economics and utilising data provided by Dow Jones VentureSource, the leading global venture capital research database, uses empirical evidence to challenge some of the more enduring myths and illustrates that European venture capital and entrepreneurship is in far ruder health than often portrayed.

Myth 1

US venture capital firms are more likely to hold successful exits than European VC houses.

Myth 2

US VC success is down to insurmountable differences between the US and Europe.

Myth 3

There exists a stigma surrounding business failure in Europe, which harms entrepreneurship and the ability of start-ups to raise funding.

Reality 1

US and European VC houses have roughly the same likelihood of an IPO exit (though Europe underperforms the US in trade sales).

Reality 2

Venture success has the same determinants in both Europe and the US, with experience of both venture capitalists and entrepreneurs a key factor. The larger pool of repeat entrepreneurs in the US, combined with the relative immaturity of the European VC sector, explains the difference in performance between the US and Europe.

Reality 3

There is no evidence of a stigma surrounding failure. A previously unsuccessful entrepreneur has at least as high a chance of getting financing for a new venture in Europe as in the US.

Richard Anton, a partner at Amadeus Capital Partners and BVCA Chairman 2011/12, said: “The European venture capital industry has changed dramatically over the last decade yet unfavourable perceptions, formed in the fallout of the dot.com bubble, continue to influence opinions within the investment community and beyond. Such attitudes have unfairly hampered European high-growth companies which in turn poses a serious threat to the future of both entrepreneurship and the economy across the Continent. This report explodes some of these myths and is an extremely welcome and robust contribution to the debate over the financing of European start-ups. The sooner we can dispel the myths that unnecessarily hinder venture capital, the sooner venture capital can help power the next generation of world-beating companies.”

Scott Button, CEO of UK tech-start-up Unruly Media, said: “The European start-up ecosystem is a weird place. You’re always hearing how much more difficult it is to find co-founders, get funded, or exit successfully than it is in the valley. For sure, none of this is easy, but it’s never struck me that it’s really any harder in, say, Shoreditch than it is in Mountain View. This research explains why. It’s not. Much of the received wisdom about entrepreneurial success and the conditions for that success is unfounded myth”

The full report can be found here.