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Top U.S. VC firms are struggling to find the right staff in Europe

Sequoia Capital Global Managing Partner Doug Leone speaks onstage throughout Day 2 of TechCrunch Disrupt SF 2018 at Moscone Center on September 6, 2018 in San Francisco, California.

Steve Jennings | Getty Images

LONDON — Some of America’s most profitable enterprise capital firms have been discovering it troublesome to recruit folks to lead their new European outposts, a number of trade sources have advised CNBC.

U.S. VC heavyweights together with Sequoia Capital, Bessemer Venture Partners, Lightspeed Venture Partners and General Atlantic have all both opened new European workplaces or began notable expansions in the final 12 months.

Hussein Kanji, co-founder of U.Ok. enterprise capital agency Hoxton Ventures, advised CNBC that the massive U.S. VC firms are discovering it “super, super hard” to rent the right folks in Europe, including that there have solely been a handful of notable appointments.

“There are few trained general partners in Europe,” he mentioned. A key distinction, Kanji mentioned, was U.S. VCs tended to give attention to development whereas European VCs have been extra probably to prioritize decreasing or eradicating threat.

To some extent, the U.S. VCs are additionally competing with the likes of SoftBank, which has its Vision Fund headquartered in London. Elsewhere, hedge funds like Tiger Global and Coatue are additionally increasing in London.

U.S. VC firms need to rent tech buyers that they’ve labored with earlier than on start-up boards they usually usually do not like hiring strangers, Kanji mentioned.

Another enterprise capitalist, who requested to stay nameless as a result of they work for considered one of the U.S. funds that has just lately expanded to Europe, advised CNBC that the “profile of VC” that a lot of the U.S. funds like is much less generally discovered inside the European house

“It’s not that the talent doesn’t exist, because it clearly does, it’s that the pool of candidates folks are targeting is just more narrow,” they added.

The supply mentioned high buyers do not “just tick the box and spend two years at a start-up after the pre-MBA program at McKinsey or Goldman before getting their MBA at Harvard and becoming a VC.”

Recent hires

Last March, Menlo Park-headquartered Sequoia employed Luciana Lixandru from Accel to be its first associate in Europe. Accel, which has an workplace in Palo Alto, has backed a number of firms in Sequoia’s portfolio together with Dropbox and Qualtrics.

“I think Sequoia did an incredible job of hiring Luciana,” Blossom Capital co-founder Ophelia Brown advised CNBC, including that there aren’t many VCs in Europe with a “growth-oriented mindset.”

“It’s not easy to find that talent in Europe,” she added. “That’s what the U.S. funds are realizing.”

Elsewhere, Menlo Park-headquartered Lightspeed employed Paul Murphy from early-stage VC agency Northzone to lead its European outpost in London. Murphy led Northzone’s funding in digital occasion start-up Hopin, which was most just lately valued at $7.75 billion regardless of being lower than two years outdated.

Lixandru and Murphy are the solely two notable hires in Europe by U.S. VC firms, in accordance to Alex Lim, who left San Francisco VC agency IVP this summer season to be part of London-based Blossom Capital as a managing associate earlier this yr.

When the right candidate does come alongside in Europe, U.S. VCs are prepared to pay massive premiums, Kanji added. A tech investor at a U.S. VC agency with a London outpost might be on round $1.5 million a yr, one other CNBC supply claimed, asking to stay nameless due to the non-public nature of the dialogue.

Nascent trade

The enterprise capital trade is comparatively new in Europe in contrast to the U.S., the place the scene has developed since the early days of the web.

That mentioned, Europe’s VC trade has grown considerably in latest years. A decade in the past, there have been solely a handful of enterprise capital funds in Europe and round 100 tech buyers. Fast ahead to at the moment and there are 1000’s of VC professionals in Europe however numerous these have solely been VCs for just a few years.

“The European VC ecosystem 10 years ago was very small, so there are relatively few VCs with more than, say, five years’ experience,” Harry Briggs, a enterprise capitalist at Omers Ventures, advised CNBC.

“However, thanks to successes such as Spotify, Adyen, Just Eat and Revolut, there are now far more operators who have experience scaling businesses to thousands of people.”

One such operator is Jambu Palaniappan, who led UberEats internationally earlier than becoming a member of Omers Ventures as a managing associate this month.

But individuals who come from working roles will want some coaching, Lim mentioned, and lots of of the U.S. VC firms can be on the lookout for individuals who will be “instantly successful.”


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