Earlier this week, I chaired the World Financial Symposiums Growth & Exit Strategies conference in London. We had over 100 registrants from 16 countries. The 20 speakers were the best in European tech: investors, sellers, strategic and financial buyers, bankers and advisors, as well as the CEOs and entrepreneurs building the industry.
There were many interesting topics covered, but one that struck me was in the discussion about the differences in the goals entrepreneurs and investors strive to achieve in Europe versus in the US. I had challenged the panelists with questions regarding my hope to see more big software companies locally. To put this in context, as per the Truffle 100 ranking of Europes largest vendors, there are only four software companies on this side of the ocean with revenues over $1b (for those wondering: SAP, Dassault, Sage and Software AG).
Interestingly, the local experts see no real competition for American software behemoths coming from Europe anytime soon.
Some of the reasons stated:
- lack of a dense ecosystem with both venture investors willing to invest big dollars in big ideas and serial entrepreneurs with the big ideas
- related to the first point, insufficient experience for all but a small number of European VCs taking an investment through to a home run
- practical challenges of building a scalable business in a multinational environment versus one very large homogenous market such as in the US