Leila Abboud is a Bloomberg Gadfly columnist covering technology. She previously worked for Reuters and the Wall Street Journal.

Venture capitalists have to have a strong stomach for risk since fewer than one in a hundred of the start-ups they back ever turn into the next Uber or Facebook.

By that measure at least, the partners at Draper Esprit are no slouches. In the face of Brexit-related market turmoil, the London-based venture capital firm raised 69 million pounds ($98 million) in an initial public offering on Wednesday. The fund's investments include Graze, which delivers healthy snacks, and Movidius, a chipmaker. 

Along for the Ride
Draper Esprit has secured backing from some well-known institutional investors
Source: Company data
Figures represent stakes held by various insitutions and company executives as a percent of share capital

Now comes the hard part: bucking the checkered history of publicly traded venture and private equity investment funds.

There's a reason why such funds don't often go public: they strain the patience of stockholders. Funds can only make a profit when they dispose of their investments through a sale or IPO, something that takes years. In the meantime, young companies, which may be years away from a workable business model or profitability, are subject to the glare of quarterly earnings reports.

Another problem: listed investment funds often end up trading at a discount to the net value of their assets. Just look at Rocket Internet, which is basically another publicly traded venture fund.

Investors have criticized Rocket for being opaque and hard to value: the stock has fallen 60 percent since its IPO in September 2014 and trades for about a third less than the reported value of its portfolio.

Draper Esprit is hoping to avoid that fate by coming to market at an undemanding valuation -- the fund's eight biggest holdings are valued at about twice their revenue. It should also provide detailed information about how its biggest holdings are doing, in addition to the performance of the company as a whole.

The track record of Europe's publicly traded VC funds isn't entirely dismal, either. Draper Esprit CEO Simon Cook points to the examples of IP Group and Imperial Innovations, two companies that help U.K. universities turn their research into start-ups. IP Group shares have climbed almost threefold since their IPO, while Imperial Innovations is up 40 percent. Both trade at a premium to their net asset value.

Europe sorely needs a venture capital success of its own. U.S. giants like Facebook and Google command huge market share here, and yet entrepreneurs haven't been able to create European rivals on anywhere near the same scale -- and policy makers are concerned about that lack of innovation and job creation.

Track Record
U.S. based venture capital funds have historically outperformed their European peers
Source: 2014 Pan-European Private Equity Performance Benchmarks Study

Returns from European venture funds have lagged the U.S. and the pool of capital available here remains smaller. European venture funds raised 2.9 billion euros in the first quarter, while U.S firms raised $13 billion, according to Dow Jones Venture Source.

Venturing Out
North America leads other regions in terms of venture capital investments in start-ups
Source: KPMG and CB Insights Venture Pulse report Q1 2016

That lack of money has stopped the region's entrepreneurs from thinking big. Many of Europe's best start-ups end up selling to overseas buyers rather than remaining private or going public. Look how Skype sold itself to eBay, and watch what happens to Sweden's Spotify: will it go public or be acquired by a Silicon Valley giant?

Draper Esprit deserves credit for trying, in a small way, to throw off that malaise. Cook says the fund will focus on helping European start-ups expand internationally so as to stay independent for longer. It's a laudable aim -- but shareholders will need to share the partners' strong stomach for risk.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Leila Abboud in Paris at labboud@bloomberg.net

To contact the editor responsible for this story:
Edward Evans at eevans3@bloomberg.net