I'm off to Europe today for a week of board meetings and vacation. It has become a bit of a tradition in our family to spend some time in europe every summer. Last summer we spent close to six weeks in europe in four countries. This summer it will be only one week in two countries.

USV now has a significant european portfolio. We have five companies in our portfolio that were started in europe and another four or five with significant operations in europe. Seven of our portfolio companies have job openings in London right now (a total of 20 job openings). There are fifteen job openings in Berlin (all with our portfolio company SoundCloud).

I've written about the Internet startup sector in Europe a fair bit. I'm bullish on the Internet startup sector all over the world but Europe is closer to NYC than most of the rest of the world, both in terms of how long it takes to get there and also in terms of culture, language, and a host of other things that matter in the relationship between entrepreneur and investor.

We don't have an office in Europe and we can't be on top of everything that is happening there. We are more reactive in our European investments than proactive. SoundCloud is a good example. I first met the team at LeWeb in 2008. We missed on the first VC round and didn't get involved until after we'd met with the team three or four times over a couple years.

Europe will likely never be a larger percentage of our portfolio than it is now (between 10-15% by names and dollars). But it is a place where interesting companies are getting started. And I'm eager to get over there and take the pulse of things.

I'll be blogging as usual. It might be lighter than usual. We'll see.

#Blogging On The Road#VC & Technology#Web/Tech

Comments (Archived):

  1. David No√ęl

    Looking forward to welcoming you at SoundCloud HQ! ūüôā

    1. paramendra

      Where do we have to go to see pictures? Your tumblog? 

  2. Tom Labus

    I’m really curious as to how their economies are doing and if regular people are hurting as much there as they are here.And most importantly, travel safe!!!

    1. Fernando Gutierrez

      It depends on the country, but leaving a small bunch of them aside (Germany and a few smaller ones), I’d say our economies are in worse shape than US’. And regular people are taking the worst part, although with different intensity, again depending on the country: high unemployment, raising taxes to the level of being confiscatory and no credit.

      1. Luis Correa d'Almeida

        Agreed. Although that doesn’t always speak to the vitality of the startup ecosystem in that area.¬†Access to credit is an issue though.

      2. Tom Labus

        Thanks, Fernando for your insight.What amazes me is how under reported this whole economic saga is here and I guess by you to.We get plenty of BS political/economic theater but very little, if any, hard core look at the harsh effects of this Depression on everyday life

  3. Dan Thornton

    As a European, hope you enjoy the trip! Obviously Silicon Roundabout has been getting a lot of coverage as a London hub, and there are some notable startups and hubs developing across Europe, but what I’d love to see is more attention paid to European businesses outside of the capital cities – I’ve started a small network of digital people in my local town, for example, which is just north of Cambridge, and we’re starting to see more and more people join who have their own businesses, and hopefully some small startups coming out of it.It’s probably a lot harder to be a non-London startup in the UK, compared to a non-Silicon Valley startup in the U.S, purely down to local population sizes (If 1% of people in a large U.S city are digitally minded, that’s a far bigger number than 1% of the average UK town), but it does mean we’ll have fought a lot harder by the time anyone pays any attention!

  4. Rahul Deodhar

    I sometimes wonder if the emphasis on english in the recent past (two decades I think) has helped new start-ups get global exposure. BTW enjoy the trip.

  5. Harry DeMott

    If you haven’t done it already – get to France and see at least one stage of the Tour de France – preferably a mountain stage. I can tell you firsthand that it was perhaps the most enjoyable sporting event I have ever been to (Olympics in Vancouver might have beaten it, and the PBR Finals in Vegas was close).¬†

  6. awaldstein

    Safe travels Fred.I would think that there is a type of start-up in Europe that needs the density and world stage of New York to create a platform for success. There’s cultural gravity between them and USV I bet.

  7. RichardF

    Timely as the start up scene is starting to gather momentum here and finally we see an agreement to standardise early stage term sheets.¬†…Enjoy – Take Gotham Gal to the Fat Duck if you get a chance!¬†

    1. Luis Correa d'Almeida

      This is very interesting. That you suggest the Fat Duck that is. ūüôā All kidding aside, have you had a chance to review the term sheet? Am curious about other people’s opinion on the matter.

      1. RichardF

        not yet Luis but will let you know what I think once I do

  8. Peter Sullivan

    Fred which 2 countries you heading to? Germany I’m assuming….

  9. LIAD

    feel free to bring over some peanut M&M’s for us downtrodden colonialists.

  10. Luis Correa d'Almeida

    It’s harder in Europe. At least it feels harder in Europe.There is often times a lack of openness across the board. The markets are more segmented, people and companies are risk-averse. Money doesn’t flow as easily – access to capital seems to involve a disproportionate amount of energy. And then there are structural issues. Fiscal policy, labor laws, scale.I’ve lived in London for 8 years, worked for both a VC-backed company and a multi-billion corporate. As a consequence I’ve spent significant time in the US – am on average once a quarter in NYC. Just came back from Boston, and spent over a week in Boulder, CO last year during StartupWeek, put together by Andrew Hyde and TechStars. The energy is incredible – people believe they can change the world. They’ll work their asses off making things happen. They want to get involved. They’ll help. And they – like you – believe that quitting your high-paying corporate job to make a difference through your startup is the best thing you could ever do.Unfortunately, I don’t feel the same energy across the pond – not all the time at least. There are great startups, great people, and talent as good as anywhere else in the world. There are just fewer than in the US, and that makes a huge difference, because scale matters.Things are slowly changing though. We see more and more people getting involved – new office space dedicated to startups are popping over the city, incubators and seed money are more abundant. And having US investors – as we’ve had for several years – definitely helps improve the landscape.

    1. Carl J. Mistlebauer

      Luis,I am not in the start up industry, but I do find the issue of “energy” remarkable.When you said, “The energy is incredible – people believe they can change the world. They’ll work their asses off making things happen. They want to get involved. They’ll help. And they – like you – believe that quitting your high-paying corporate job to make a difference through your startup is the best thing you could ever do.”¬†I couldn’t help but nod¬†my head in total agreement, but not inregards to the start up environment in Europe but rather about most industries in the US!¬†¬†The collaboration is fascinating…in most industries it is¬†hard to get individuals to collaborate within a company let alone among companies and yet in the start up industry people collaborate with total strangers!I think the risk of knowing that a third of the companies you invest in will not pan out is¬†strange, but at the same time I come from an¬†environment where a sure thing is risky if it involves change….Personally, I can’t decide if I want to continue trying to¬†bring the energy and innovation¬†of start ups to non tech industries or just throw my hands up in the air and¬†pack up and join the revolution.¬†I marvel at the growth and innovation in China, the buildings, the infrastructure, and around here they call that “unAmerican”¬† I am sure that we look much more appealing if you only visit,¬†Boston, NYC, or Silicon Valley, but the reality is there is a bigger ‘divide’ within the US than the “big¬†pond’ represents between¬†the east coast and europe in regards to start ups.Just try explaining to community leaders that the internet is a public utility. like electricity, water, and or sewage, and that it should be provided to everyone….community wifi….that public access to the internet will improve communities as much as clean water did in the 20th century, or electricity.¬†¬†¬†

      1. Luis Correa d'Almeida

        Carl –¬†Absolutely agree with your view on established industries’ and corporate environments’ inability to deal with – or understand – change. It seems to me that there are two important factors in equal measure: fear of uncertainty and lack of ambition.For many people – and companies alike – the goal isn’t to make a radical difference, but rather to exist with the sole purpose of feeding on the status quo – literally. This applies to both people and institutions. It isn’t a bad thing necessarily, simply a choice, sometimes due to circumstance, but still a choice.Fear – across the board – is a powerful deterrent. Specifically the fear of loss. Some may truly want to change the world. This is not the most important thing for them though. The perceived cost of opportunity is too great. They will do it only if their livelihood is not compromised.Some established companies do invest in innovation. They provide the resources and the safety needed for people to try and fail. At the same time, ‘corporate entrepreneurs’ try to make a difference from within, often times unaware of how difficult it is to make change happen, not for any particular technical reason, but due to people and culture.Completely agree with your view on Internet as public utility. As long as it doesn’t become too regulated like some of the¬†utility¬†industries ūüôā

        1. Carl J. Mistlebauer

          I have always believed that you have an entrepreneur mindset and a careerist mindset….entrepreneurs understand failure as a learning experience and thus have a totally different method for calculating risk from those with the careerist mindset; thus I really cannot see how you can teach entrepreneurship in colleges where the vast majority of students are out to begin careers; I cannot help but believe that the true classroom for entrepreneurship is a frat house, a dorm, or a bar…not the classroom.It is really hard to get people to step out on the limb in an organization, the hardest thing to get people to grasp is the concept that making mistakes is actually better than not doing anything.¬† I have told lots of young people that the best way to get fired is to not make any mistakes…because that means you aren’t doing anything; they look at me really weird and then I remind them that their is no gain without risk.What I find interesting is on one hand we have the desire “to change the world” and on the other hand we see the emergence of libertarianism and renewed interest in Ayn Rand, or in the south the popularity of prosperity theology….I think if you study the Quora and or Stack Exchange Community you will realize that there is a divide developing….to change the world involves collaboration and that is a concept that has not been absorbed all that deeply in our society.Inregards to the internet, I was referring to access not content.¬† I saw the other day where South Korea is going to give every student an IPAD or Kindle or something of that nature….and I know locally we have a large porportion of our local students who do not have access to the internet…go to the local library and its standing room only to access the public computers.¬† That is what concerns me the most is that we are developing into the “haves” and the “have nots” inregards to technology.¬†

          1. Guest

            Carl,Interesting thoughts RE: Ayn Rand related comments.I did a blog post yesterday regarding Ayn Rand.¬†…I have been thinking a lot of Ayn Rand lately both because I have noticed the same thing you mention above and, to be honest, because I recently saw the RUSH documentary and I always think of Ayn Rand when I really think about RUSH songs.¬†

          2. Carl J. Mistlebauer

            I went through an Ayn Rand phase in college and then a Karl Marx phase….read everything and applied their logic to everything….in the late 70’s Karl Marx could make you much more popular with the chicks…I think that Ayn Rand has been totally mis understood…and I say that because I have three nephews in college right now and they love to lecture me on Rand….I think the true essence of her philosophy is about not succumbing to social standards and achieving your best, and recognizing achievements of others.¬† I think its absurd that a whole bunch of people who haven’t done a damn thing in life are going around demanding that they not be made to “share”¬† Ayn Rand did not talk money…she spoke of creativity, innovation, new ideas…..being “selfish” is not the opposite of “selflessness”¬† No one what has even changed the world with an invention or with innovation ever did so because they wanted to get rich….wealth is a result of innovation not the cause.¬† I get out of bed in the morning because I have things I want to do, things I want to accomplish….the big fat financial reward does not get me out of bed.When my nieces ask me what they should major in to make lots of money…I always tell them you cannot major in “wealth accumulation” if making lots of money in a short period of time is important to you, then forget college and go into internet porn….I had/have a business partner….he is so arrogant and its getting worse….he let success get to his ego…and no one believes as deeply as he does that without him our employees would not have jobs…to which I respond, yeah, and without them you would be one damn poor stupid hillbilly….he is always looking for a kickback for being a job creator….I told him he has been rewarded, look at your wealth.Ayn Rand represents a point of view, a way of looking at the world, to create, to achieve, to be and do your best, to have standards and expectations…”Sanuk” is a Thai word which translates into “fun” but more as an attitude you take to what you do….if you can’t have ‘fun’ then don’t do it….I think the whole issue of “altruism” is wrong to….I don’t see Mother Thersea as a saint as someone who sacrificed herself for others, but rather as someone who saw a problem and then went on and attempted to solve it.¬†I can’t help but believe that the motivation for Fred isn’t the big financial reward but rather the fact that he picks winners more times than he picks losers…..its the process of picking and developing that motivates him more than the fat pay out….You can’t get the fat payout without the process…thats called a lottery….

          3. Guest

            Carl,This is Geoffrey had to reply to my own post as thread stopped. Also posting from phone so am not logged into Disqus. Really enjoyed your comments. I share some of your thoughts on Rand. I too believe there is some misunderstanding. I am just getting back into rediscovering Objectivism because there does seem to be a new wave of Randians out there. I was so pleased to see some shared kindred spirit in your reply. I am sorry to hear about the stress in your biz relationship at present. I also apologize for any typos … typing on a phone keypad while roaming around Costco is a recipe for grammatical fail I fear. Would you mind if I reached out to you via your blog a little later today? Is there contact information for you there?Thanks again for a reply that made me nod my head and smile.{UPDATED 3pm Central}

          4. Luis Correa d'Almeida

            Interesting take on what makes an entrepreneur.”entrepreneurs understand failure as a learning experience and thus have a totally different method for calculating risk from those with the careerist mindset; thus I really cannot see how you can teach entrepreneurship in colleges where the vast majority of students are out to begin careers”Very interesting point. Why are most people out to start careers? It seems to me that many people look at careerism as a means to an end – the financial vehicle that will help them achieve their personal goals, which are, in turn, orthogonal to whatever they do professionally. What they may fail to understand is that the journey is often times a more meaningful experience than the goals they set for themselves.On the topic of Objectivism, there is probably a discussion to be had that I am objectively not prepared for. But it is an interesting point. Also, I wouldn’t assume that the desire to change the world is always an exercise in altruism.

          5. Guest

            Good point.¬†RE: “Also, I wouldn’t assume that the desire to change the world is always an exercise in altruism.”

          6. Luis Correa d'Almeida

            In regards to the Internet, I was talking about access too. In several countries – either due to local law or oligopolies – utilities have been ‘forced’ into a corner. They are not required to innovate because there is no competition.¬†They are state owned companies that went private.¬†They built their infrastructure on state budgets – and lease it to the competition. ¬†In some cases markets are too small to justify an alternative.At the same time, private institutions like¬†universities now understand the importance of access, and provide it free of charge.In some countries, education is a constitutional right, and therefore said state is required to provide education to everyone. Several countries have state-owned TV stations whose role is to serve the community. The infrastructure – and the service – is paid for by tax payers. When will access to the Internet be deemed a fundamental right? Tricky.

          7. Dave W Baldwin

            Would be so much easier to help the world if the the world didn’t make it so damn hard—–Collaboration will take hold this decade.¬† At this point, we have a more open relationship in cancer research.¬† At the same time, the collaboration mantra from Cisco didn’t seem to take off.For the next 2 years, the competition in the delivery system will be all about ‘all us or no go’… so it is a matter of not playing by their rules.Over the next 18 months a few surprises will creep up and be more fashioned to the end run users, no matter where they are… and that will begin to flip the board.

          8. JLM

            Wealth is now defined, in part, by access to technology and parental oversight.The poorest parts of any city have virtually no home technology and Internet access as well as having insufficient parental supervision.The “richest” parts of town have almost unlimited, multi-machine technology and Internet access — desktops, laptops, iPads and smart phones.In addition, they have parents (sometimes two sets because of divorce) and multiple sets of grandparents who are smart, wealthy and involved.We should tax these blokes out of existence. ¬†Ooops, sorry, wrong blog. Smiling.

      2. Guest

        Carl,You are not alone. Do not give up on the old tech companies.

  11. Fernando Gutierrez

    As someone who travels from Spain to the US every month I can only agree in how easy is to “commute” between the East Coast and Europe. If it not were for the immigration laws on both sides, I think that we could see many examples of people working on both continents and creating really interesting opportunities.

  12. William Mougayar

    It would be great to hear your perspective on how the European start-up environment has changed since your last visit.

  13. JimHirshfield

    Picking up one of your recent post about globalization, I think there’s incredible value when U.S. start-ups work with European development teams. Sure, European start-up centers need to grow stronger, but given the engineering talent shortages in parts of the U.S., it just makes sense to have teams abroad. There are challenges, but I’ve seen it work first-hand at Zemanta and ShoutEm…and it’s a trend with many cool entrepreneurs coming out of Seedcamp.Bon voyage!

    1. Luis Correa d'Almeida

      Any idea of where these resources are typically based? Are they typically lone developers or organized teams around a small consultancy?

      1. JimHirshfield

        Slovenia has great/experienced web engineering talent. Ljubljana.Zagreb, Croatia also has a strong engineering talent pool. I know of a few outsourced dev shops there. 

      2. Julian Sametinger

        From our experience, most of them work in coworking spaces / innovation labs in fluid teams. If you need any info on the European startup / web / dev scene (especially in the CEE countries), feel free to get in touch with us at¬†@starteurope:twitter¬†¬†or just shoot me a mail to [email protected] and we are happy to give you a lead.

      3. Viktor Marohnic

        Ljubljana, Zagreb, Split are the biggest hubs.Jim thanks for the kind words.

        1. Julian Sametinger

          Don’t forget about Kiev and Budapest! Great stuff happening there!

          1. Carl J. Mistlebauer

            I hired two great programmers from Budapest…in fact they worked with quite a few of my folks and no one knew they were in Budapest.When we were running our ecommerce site we had 24/7 customer service chat and they ended up handling that for us…just awesome and fun to work with!I always accused them of being from New Jersey (don’t ask me why I picked New Jersey!)¬† I have never met a team so wanting to learn and share….¬†¬†I promised to visit and I need to do that….

  14. ŤŅěšĻĒ

    why I can not delete test message

  15. Marco Montemagno

    Hi Fred do you come also in Italy?

  16. Marv

    21 European investors agree on standard term sheet for startups you’ve written about this before and will be interesting on your thoughts after your vacation.

  17. Jeffrey C

    Fred, AVC readers.  I wanted to highlight the superb startup scene in Dublin.many really good companies, an abundance of talent, particularly for more mature companies looking to take their enterprise Pan-euro.Check out Dublin Web Summit.  This kid Paddy Cosgrove has set up quite a cool event.

  18. ShanaC

    A) Enjoy EuropeB) why do you think your perception of the market there is still reactive rather than proactive (besides the distance)

  19. Boris Fowler

    Arent energy startups doing well in Europe? From what I know, Europeans know a lot more than we do when it comes to solar energy, and the Middle-Eastern part of the world knows even more.¬†Why is the US so far behind in terms of alternative energy? This really fascinates me and it is exciting to see what will happen across the world as we move away from oil.Unlike these business, I bet there are quite a few people willing to invest in alternative energy.¬†…

    1. Fernando Gutierrez

      Most of the so called energy startups in Europe create nothing new. They just install and exploit already well known technologies. We have deep subsidies for solar and wind, so most companies build big parks and sell the energy to utilities at a price that the legislator has fixed previously. No research. No new discoveries. It’s almost like buying a bond. Just expensive energy paid by a consumer who can’t chose.Obviously, there are exceptions, but they are few. I understand that new technologies may need some help to take off, but I think that if subsidies can’t be avoided (that’s another discussion), they should go to researchers, not to big companies who can access credit to install a huge park and milk it for 20 years.

  20. Roseann Chase

    I paid $32.67 for a XBOX 360 and my mom got a 17 inch Toshiba laptop for $94.83 being delivered to our house tomorrow by FedEX. I will never again pay expensive retail prices at stores. I even sold a 46 inch HDTV to my boss for $650 and it only cost me $52.78 to get. Here is the website we using to get all this stuff,

  21. Berislav Lopac

    Fred, are you coming to mentor at Seedcamp Ljubljana, by any chance?

  22. Bala

    Fred you should stop by in Iceland

    1. JLM

      Do you live in Iceland?  That is very cool.

      1. Bala

        Yep, been living there since 2006…¬†more interestingly¬†saw the whole build up of the financials crisis and the blow up as I used to work for one of the Icelandic Banks, had the experience of starting our banking operations and shutting it down in 2 months in India ūüôā

  23. paramendra

    The entire world is asizzle, why only Europe! 

  24. Daniel Stachowiak

    If you are in London and would have time for a quick coffee with a group of Polish entrepreneurs and angel investors, I would be more than happy to organize.

  25. whatafy

    I dont know why, but it’s harder in Europe.¬†

  26. ei_dscanlon

    Safe travels Fred – maybe we’ll see you in Ireland some day?For our population size we punch way above our weight in terms of innovation and start-ups: a recent study showed that 3 of the top 8 European Accelerator’s are located here¬†http://bestconnected.enterp…

  27. Niamh Bushnell

    Have a great time Fred and thank you for this wonderful and wise blog every day. Niamh

  28. nikolas woischnik

    Are you coming to Berlin, too? As you know, Berlin is where it is happening :-).  Check out interviews with Berlin based founders at An interview with the Soundcloud founder will be posted in coming days. 

  29. Ferentz

    Fred,You speak of Europe as if it’s a country and not a continent. The landscape across the continent and often very vexing for young entrepreneurs. Too many of he continents governments are still very meddlesome when it comes to entrepreneurial liberty, or young companies find it virtually impossible to get a foothold alongside older companies that are sometimes defacto government operations.

  30. Ferentz

    Fred,You speak of Europe as if it’s a country and not a continent. The landscape across the continent and often very vexing for young entrepreneurs. Too many of he continents governments are still very meddlesome when it comes to entrepreneurial liberty, or young companies find it virtually impossible to get a foothold alongside older companies that are sometimes defacto government operations.

  31. Donna Brewington White

  32. Toby Beresford

    Have a great time. Looking forward to your perspectives. for me some blog advice on whether European startups should even try to access north American markets would be useful.

  33. Daniel M

    Fred,May I recommend that your embedded links open up new browser tabs as opposed to navigating to that page in the same tab that the AVC Blog is open.Dan

  34. Bryan J Wilson

    As someone trying to break into the startup world, this got me to thinking – as the product of a half-euro, half-american upbringing, I’ve never quite seen a way to exploit my culture/languages knowledge in a meaningful way. Fred (or anyone else) – any ideas on how to do that? Is there opportunity for someone to help draw a closer bridge, so to speak, between the US and European startup communities?

  35. Jean-Claude Thil

    Hello, Sir!Do you know Estonia?I’d be glad to receive your feedback on jctATjmc.eeJean-Claude Thil(reading Jarvis’s WWGD?)