According to a recent survey by CNBC, American venture capital firms that set up in Europe struggle to recruit the right people. Industry heavyweights, including Sequoia Capital, Bessemer Venture Partners, Lightspeed Venture Partners and General Catalyst, have all opened offices in Europe.
Venture capital firms are not finding the right candidates in the European area
According to Hussein Kanji, co-founder of UK venture capital firm Hoxton Ventures, says large US venture capital firms are finding it is “Extremely difficult to recruit the right people in Europe”. The point is that American and European venture capital firms don’t work the same.
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Americans tend to focus on growth, while European venture capitalists prioritize reducing or even eliminating risks. A difference that seems to be important for professionals in the sector.
US venture capital firms also compete with firms like SoftBank, whose Vision Fund is headquartered in London. In addition, other hedge funds such as Tiger Global and Coatue are also developing in London.
According to several sources, the “Profile of the professional in venture capital” is less common in Europe. It is probably not a question of talent, but rather a question of much narrower pool of candidates.
Venture capital, a “nascent” sector for Europe
This market tension necessarily implies exorbitant wages. Indeed, when the right candidate comes to Europe, US venture capital firms are ready to pay very large premiums, according to Hussein Kanji.
This is because the venture capital industry is relatively new in Europe compared to the United States. In Uncle Sam’s country, the Venture Capital (VC) system has been around since the beginnings of the internet. In Europe, the venture capital industry has grown in recent years.
We are thinking in particular of the launch of Open VC, the platform for easily finding venture capital funds, recently launched by the French Stéphane Nasser and Lucas Roquilly. Ten years ago there were only a handful of venture capital funds in Europe. Today we count several thousand venture capital professionals in Europe, but many of them have only been for a few years.
There are few professionals in the sector with more than five years of experience in Europe. With the recent successes of Spotify, Adyen, Just Eat or Revolut, venture capital firms have gained experience. Anyway, there you go a sector that recruits in Europe.