Jason Calacanis and European Unicorns
I embarked on a 30 day blogging challenge to restore my passion for writing (more about it here http://www.vccafe.com/2017/07/24/blogging-nostalgia-and-my-30-day-challenge/) Please sign up to my newsletter to receive the latest updates. This was day Ten. I’m typing this on my phone so sorry for the brevity.
Today I started listening to “Angel” by Jason Calacanis on Audible.Now, I never met Jason, think he’s generally a smart guy and have a lot of respect for the journey he made. But basically according to the book, which aims to teach and inspire Angel investors, it’s Silicon Valley or bust.
I had to pause when Jason Calacanis said:
“You can largely forget Europe with its socialism and red tape and generally anti entrepreneurial policies. Except Sweden”
It goes on about the success of Sweden (which frankly, there are un proportionally many), but the sentiment is that if you want to succeed in finding unicorns, the only place is Silicon Valley.
And so, it inspired me to write my daily blog post on European Unicorns. My question is, was Jason right?
He’s right about Silicon Valley
In a recent CB Insights Research Brief which showed every US company worth $1B+ on a map, it’s clear that Silicon Valley has the lion share. The United States is home to 105 unicorn companies valued at $1B+. As of 7/25/2017, six private US companies are worth over $10B
California has the highest unicorn “population” of any US state by far, with 62 billion-dollar startups inside its borders. New York ranks second with 15, followed by Massachusetts and Illinois with five each.
I liked Jason’s point:
“The greatest product Silicon Valley built is Silicon Valley “ – Jason Calacanis
You build Google, Apple, Facebook, Uber etc 15 miles from one another, create a ton of wealth and re-invest in the next wave.
Fair enough, it’s a unique place.
What about Europe?
I recommend you take a look some of the decks normally presented by Saul Klein at events like Web Summit or Slush, filled with stats and plenty of examples of European Unicorns and many more who are on their way. Definitely a lot to be proud of! but to avoid bombarding you with facts you may already know I’ll just point you to this report on European Unicorns.
Instead, I asked my friends for their opinion in a Facebook post. Founders and European VCs responded and their posts are much more entertaining than what I was going to write here. It’s a public chat so I posted verbatim (no names, but you’re welcome to search for it).
- Founder: He’s probably right if the goal is to be the best angel investor in the world. But I’m sure that if you want to do well, and don’t *have* to be the best, then other places will do just fine..
- VC: Um… JustEat Supercell King liquidity events Spotify et al private funding. Sick of hearing this meme
- Contrarían VC: Sum up all the European public unicorns created this side of the century. Can you get to Snapchat and Twitter’s combined market cap? And those aren’t even the good ones in CA (one is in LA).
- Founder: “… socialism… Except Sweden”. Ok.(Sweden is one of the most socialist countries in the world).
- VC1: I’d so why how do you validate your thesis to LPs to bet on Europe?
- VC2: We don’t. We ask them to bet on us to back the exceptions.
- Founder: Erm… aren’t the best investments always “exceptions” , regardless of US / Europe / Asia etc.? :-)
- Founder: Anyone know when he last spent any time over here in “Socialist Europe?”
I hope the list continues to go on. Because we have a lot of building still to do.
Brexit (a real pity in my personal opinion), has a big chance of shrinking the market in the U.K.:
The UK has Europe’s biggest herd of unicorns – private companies that are valued at $1 billion or more. Part of how it got there was through funding from the European Investment Fund. But that source of EU venture capital could very well be cut off when Britain leaves the bloc.
And post Brexit it is safe to assume that there will continue to be heavy government involvement with headlines like: U.K. Proposes Post-Brexit Fund to Close Technology funding gap.
Many are bullish (my self included) and there are certainly some seeds of success: http://magazine.startus.cc/europe-breeding-unicorns/
Finally, Europe needs to get better at telling our story (collectively, not only country by country) if we want to attract (and retain) the best investors and entrepreneurs in the world.