In the Bits & Pretzels Podcast Albert Wenger, one of tech's top VCs, talks about why investors are increasingly striking off Silicon Valley from their travel plans.
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, Etsy and Twillio.
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 data and privacy restrictions, it's much harder for smaller companies.
"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 to 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 "really 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 recommends.
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's something 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: US startups are copying Europe’s ideas
07:00: Storytelling eats location for breakfast
11:48: Why Albert Wenger invests in European founders
16:19: Building a trusted brand is a competitive advantage
20:58: Uber, WeWork: learning from unicorn mistakes
29:28: “I was born in Nuremberg”
32:56: A fan of Austin Powers
34:52: Europe has self-inflicted mistakes on regulation
39:40: “Hotel California” for data: You can never leave
44:56: US & China: Two digital superpowers fighting
48:54: “The amazing food my mom makes!”
53:41: How to bridge social divide
The Bits & Pretzels Podcast is produced by Regina Körner, Migo Fricke and Hubert Honold with the help of Janek Postpischiel.