Focus on larger deals to set ‘venture ambition higher’
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Go4Venture, the London-based venture capital firm, has called on the technology industry to focus on larger transactions as ‘one way to set European venture ambition higher’.
Go4Venture, the venture capital firm, has called on the technology industry to focus on larger transactions as ‘one way to set European venture ambition higher’.
In its European technology venture capital bulletin for April, released this week, the London-based firm says rather than ‘obsessing’ about the lack of early-stage funding now being experienced, the industry should focus on building large, valuable companies.
Go4Venture admits the firm is more ‘bullish’ than others, however, the bulletin, which outlines its Headline Transaction Index, points out that in the first quarter of this year there were 88 transactions worth €683 million (£600 million).
The index is complied on a monthly basis and tracks technology private financing deals as reported in the press. It excludes most of the life sciences drug-related deals, which the statement says has ‘suffered badly in the recent past'.
‘The European venture market does not suffer from a lack of start-up financing so much as immaturity when it comes to building substantial companies,’ it says.
‘Success in building large, valuable companies (rather than obsessing about the lack of early-stage funding) will yield more confident managers and a new generation of business angels to take care of early-stage investment.
‘This is exactly what is happening in Europe today, with a new generation of so-called super angel funds. Beyond investment amounts, this new generation of investors is the key structural reason to be optimistic about European venture financing.
‘Interestingly, US VCs have taken notice and are leading the charge, with funds such as Accel, Bessemer, Fidelity, Greylock, Highland, Insight, Oak, Polaris, Redpoint, Sequoia and Summit all active in some of the larger deals in Europe. A few European funds are also following with home grown US-style investors such as Balderton, DFJ Esprit, Index and Wellington.
‘This in turn is encouraging established national players to react with initiatives of their own such as the European Venture Club, which encourages more cross-border and larger syndications.’
The statement continues to demonstrate its point by highlighting Greylock Partners’ recent close of its $160 million European and Israeli fund at a time ‘when so many European VCs are struggling to get their next fund off the ground’.
Created in 2000 and lead by managing partner Jean-Michel Deligny, Go4Venture is an investment bank specialising in structuring and executing growth strategies for fast-growing innovative companies.