Another reason why most European VC’s are so dopey

I was reading a very interesting article in Redherring about a so-called venture capital firm, the London-based Tempo Capital Partners. I say so-called because of its business model. Instead of investing to capital-needy, high-growth potential start-ups, Tempo buys the leftovers from other venture firms. Tempo is not the only company in this space, rather it is indicative of the entire European VC market.

What is so interesting to me is that I see a business opportunity. My company, growthstrategies, may start brokering deals between Tempo and the Swedish venture capital players. I see it as easy money. Why? Because Swedish VC’s really don’t like the VC business anyway. They see investing in high-potential business much too risky and difficult for them, when they can invest in wide ranging businesses controlled by the Swedish Families.

Additionally, Swedish VC’s are already spending most of their time buying and selling investments and companies in their portfolio. Just read Dagens Industri basically any day.

This article was full of funny stuff. They quote the managing director of Munich-based vc consolidator, who talks about how bad the returns for European VC’s are because we don’t have the Googles and Yahoos here in Europe. Is he serious? You actually have to like start-up companies and you really want to find good start-up companies and you really have to invest in those companies, if you want to find the next Google or Yahoo.

There are hundreds of high potential growth firms all over Europe. Why don’t the Europeans see them? Why do the Americans and the British?

So Tempo may be very successful in this niche. With so many VC’s wanting to dump previously made investments, Tempo should be able to cherrypick the best companies. This is certainly a great way to add value for their partners, while getting those pesky entrepreneurs out of the hair of Swedish VC’s. 😉

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