Europe's Untapped Venture Capital Potential, with Nathaniel Gunn Arnold and Jan-Martin Frie from the IMF
10/29/24 • 33 min
Over the past decade, American VCs have outraised their European counterparts by hundreds of billions of dollars. But why?
Nathaniel Arnold and Jan-Martin Frie say several factors are at play, including fragmented markets, a disparity in private capital, and Europe's comparative absence of institutional investors. The result has been a "scale-up gap" pushing promising EU startups to seek foreign funding.
In this episode of Capital Conversations, Arnold and Frie explore the challenges and opportunities in the European VC landscape, and discuss how the "brain drain" effect is hampering the growth of startups on the continent.
Nate Arnold is the IMF’s Deputy Resident Representative to the EU in Brussels. Before that he worked on the euro area team, Nordic countries, and in the Fiscal Affairs department at the IMF headquarters in Washington. Jan Frie is an economist in the IMF’s Brussels office. He has also worked at the European Commission and the think tank, CEPS. Their paper 'Stepping up Venture Capital to Finance Innovation in Europe' can be found here, or through their blog.
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Through our research, thought leadership, and annual program, IMD’s Venture Asset Management Initiative aims to demystify venture asset management in Switzerland and across Europe.
To find out more about IMD visit imd.org
For more information about our Venture Capital Asset Management program visit: imd.org/finance/vam/
Over the past decade, American VCs have outraised their European counterparts by hundreds of billions of dollars. But why?
Nathaniel Arnold and Jan-Martin Frie say several factors are at play, including fragmented markets, a disparity in private capital, and Europe's comparative absence of institutional investors. The result has been a "scale-up gap" pushing promising EU startups to seek foreign funding.
In this episode of Capital Conversations, Arnold and Frie explore the challenges and opportunities in the European VC landscape, and discuss how the "brain drain" effect is hampering the growth of startups on the continent.
Nate Arnold is the IMF’s Deputy Resident Representative to the EU in Brussels. Before that he worked on the euro area team, Nordic countries, and in the Fiscal Affairs department at the IMF headquarters in Washington. Jan Frie is an economist in the IMF’s Brussels office. He has also worked at the European Commission and the think tank, CEPS. Their paper 'Stepping up Venture Capital to Finance Innovation in Europe' can be found here, or through their blog.
****
Through our research, thought leadership, and annual program, IMD’s Venture Asset Management Initiative aims to demystify venture asset management in Switzerland and across Europe.
To find out more about IMD visit imd.org
For more information about our Venture Capital Asset Management program visit: imd.org/finance/vam/
Previous Episode
Part 2: Exploring the craft of fund sizing and modelling, with Daniel Keiper-Knorr
How do investors strike the delicate balance between fund size, investment strategy, and portfolio construction to maximize returns?
In today's markets, that's a tricky question. VCs need to keep one eye on waning IPO activity and intensifying competition while also grappling with unpredictable market dynamics.
One firm that has done this successfully is Speedinvest – much to the credit of its co-founding partner Daniel Keiper-Knorr. The firm focuses on early-stage investments and has offices in Berlin, London, Munich, Paris, and Vienna, and total assets under management exceeding €1bn.
In this episode of Capital Conversations, Keiper-Knorr discusses the story behind Speedinvest and the complex craft of fund sizing and modeling.
****
Through our research, thought leadership, and annual program, IMD’s Venture Asset Management Initiative aims to demystify venture asset management in Switzerland and across Europe.
To find out more about IMD visit imd.org
For more information about our Venture Capital Asset Management program click here
Next Episode
Bpifrance: How a government initiative can support domestic venture capital
France's national investment bank, led by Nicolas Dufourc, finances businesses at every stage of development through loans, guarantees, and equity investments.
In this week's episode, we explore its pivotal role in fostering entrepreneurship through a grassroots approach to innovation and commitment to supporting diverse communities.
Dufourc discusses why Bpifrance emphasizes the importance of perseverance and risk-taking among entrepreneurs, and how he works to create a holistic ecosystem of support for them. He promotes accessibility and inclusivity at every stage, and Bpifrance may well serve as a model for other countries that want to drive innovation and economic resilience.
Details on the 2023 results of Bpifrance can be found here.
****
Through our research, thought leadership, and annual program, IMD’s Venture Asset Management Initiative aims to demystify venture asset management in Switzerland and across Europe.
To find out more about IMD visit imd.org
For more information about our Venture Capital Asset Management program visit: imd.org/finance/vam/
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