Tech Execs Hide IDs to Avoid Getting Mobbed at Summitby
Lack of venture capital leaves startups desperate for cash
An hour to cross the room: `There’s too much hustling'
European startups are so hungry for cash that executives and would-be investors at this week’s Dublin Web Summit are concealing their ID badges and even taking refuge with reporters to avoid being accosted by desperate entrepreneurs.
“It’s really crazy. You get people walking alongside you through the conference, pitching their company,” said Patrick Alberts, head of corporate development at Xing AG, Germany’s answer to LinkedIn, wearing a red “Investor” lanyard. “No matter how much you tell them you’re not interested.”
Peter Smith, founder of bitcoin trading hub Blockchain Ltd., isn’t looking to invest in startups, but that hasn’t seemed to matter to the 40,000 or so attendees, about twice last year’s figure. “If I don’t flip my name tag around and hide who I am, it’ll take me an hour to get from one side of the room to the other,” he said. “There’s too much hustling.”
The crush is a function of early-stage European startups struggling to find investment on an undercapitalized continent. European venture funds raised 4.1 billion euros ($4.5 billion) last year, compared with about 20 billion euros in the U.S., according to Invest in Europe, a venture-capital lobbying group. It often takes a large U.S. investor to provide the cash needed to propel startups on the continent into global enterprises.
“If you look at the Series A and B, where people raise a few million dollars, tens of millions, you can do that in Europe,” Nicolas Brusson, co-founder and chief operating officer of ride-sharing company BlaBlaCar, said in an interview with Bloomberg Television. “When you need the scale to do $100 million to $200 million, you can’t do that here yet.”
Philippe Botteri of Accel Partners said he is meeting with reporters and people he knows in the industry at the conference.
“The number one issue for a venture capital firm that covers Europe is to find the needle in the haystack and not get drowned by noise,” said his Accel colleague Fred Destin. Governments should encourage tech investment by offering tax incentives to insurance companies and retirement funds to redeploy their cash, he said.
‘Country of Savers’
That would require not just legal but cultural change as well, said French Minister for Digital Affairs Axelle Lemaire. “France is a country of savers -- companies and individuals like to save their money. We are looking at changing legislation to encourage savers to place their money in technology.”
Meanwhile, market conditions are making it harder for investors to reap gains. Shares of SRP Groupe SA, the parent of French online retailer Showroomprive, fell 9.6 percent on their first day of trading last week. Music-streaming startup Deezer SA recently postponed its planned initial public offering, citing a weak stock market.
John Collison is a European Web entrepreneur -- sort of -- who has received needed capital. Stripe Inc., the online payments processor that the Irishman co-founded, was valued at $5 billion in July after such investors as Visa Inc. joined a $100 million funding round. Stripe, however, is based in San Francisco.
“The EU, if it was a country, would have the largest economy in the world,” he said in an interview on Bloomberg Television. “We should hold ourselves to a standard that the next Facebooks and Ubers and world-leading tech companies should be coming out of Europe -- and that’s what I want to see.”