Star investor Albert Wenger explains why VCs are looking into European startups & how founders can benefit from the hype
Meet a Nuremberger in New York.
From his office on the 19th floor venture capitalist Albert Wenger has a clear view of the Empire State Building. Not many Bavarians rise up the ranks of tech like he has.
Today, Wenger acts as managing partner at Union Square Ventures, one of the top returning venture capital funds in the world, with $1 billion under management. He was an early investor in several EU and US companies, including Twitter, Tumblr and Etsy.
The German-American has high expectations for Europe, the old continent where he grew up. "With every big exit in Europe, with every big funding that perception that there is not enough there in Europe is breaking down", he shares in conversation with Britta Weddeling.
"Today companies are solving difficult problems everywhere. It doesn't matter where they are based."
Fundraising is all about the right story. And for a while these stories were all happening in Silicon Valley. But now, things are starting to shift into Europes favor. The rise of VC capital in European startups tripled within the last 4 years according to Atomico's "2019 State of the European Tech Report".
That's good news for Europe – if only Europe wouldn't suffer from self-inflicted mistakes on regulation, Wenger criticizes, pointing specifically to the disputed General Data Protection Regulation (GDPR), a privacy law that was implemented in May 2018. While big tech companies can easily hire lawyers to deal with complicated privacy restrictions, it's much harder for smaller ones.
"Many people, myself included, predicted that GDPR was going to help Google and Facebook and hurt startups. And it did."
The experienced venture capitalist also shares best practices of how a startup should enter the US market. "If you are European based and you want to expand in the US, you really need to feel like your European business is doing very well and you understand what you are doing and how you want to grow", he says. Companies should make a "concerted effort" and hire people that are locally from the US. And one manager of the co-founding team has to move to the US, he thinks.
After all, European startups could benefit from coming from a continent with strong data and privacy restrictions, in times when data abuse and privacy intrusions are kind of a sad new norm in tech, according to Wenger.
"If you can build a trusted brand, that can become a longterm competitive advantage. If you abuse your users then over time you will have trouble with your brand."
Wenger graduated from Havard and earned his PhD in Information Technology from the MIT in 1999. In 2006 he joined Union Square Ventures (USV) as a venture partner following the sale of Delicious to Yahoo in 2005 where he had been the president. He became a General Partner in 2008 and a Managing Partner in 2017. His investments include Series A rounds in Etsy (IPO 2015), Twilio (IPO 2016), MongoDB (IPO 2017), Behance (acquired by Adobe) and Firebase (acquired by Google).
03:16 Why others copy Europe now
07:00 Storytelling eats location
11:48 Why Albert invests in EU founders
16:19 Trust as competitive advantage
20:58 Learning from unicorn mistakes
29:28 A Nuremberger in New York
32:56 A fan of Austin Powers
34:52 Europe's self-inflicted mistakes
39:40 “Hotel California” for data
44:56 The fight for digital supremacy
48:54 The amazing food of moms
53:41 How to bridge social divide
Production & Editing: Regina Körner, Migo Fricke, Hubert Honold. Design: Christian Lohmeier. With help of Janek Postpischiel.