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STARTUP CHALLENGES INEUROPE
At the Harvard Business School European Business Conference held in November 2003,
some European executives opined that it was harder for the European entrepreneurs to
obtain seedmoney fromtheVenture Capitalists (VC) because theVCs “want to see customers
and revenue before they fund.” Nigel Drummond, CEO of UK-based Internet Incubator,
believed that since VC investing was in a nascent stage, the VC activity “resembles a
classic new market – a lot of entrants, and very fragmented. And because many people
don’t have good research and experience, it’s still very trend-driven.”...
THE GERMANCASE
Germany, the world’s third biggest economy, also considered the powerhouse of Europe,
grewby 0.2%in 2002 and its unemployment reached 11%in 2003 (Exhibit IV). Germany’s
FinanceMinister, Hans Eichel, admitted that for the second year running, Germany would
fail to keep its budget deficit below the 3% threshold required for the Euro and that he
wouldn’t be able to balance the budget by 2006, as promised....
CORPORATE VENTURE CAPITAL
Corporate private equity investments have been witnessing an all-time high in Europe,
since 2002. Some observers believed that this might just provide the much-needed fillip to
Europe’s entrepreneurial activity. In Europe, corporate venture capital investments totalled
to almost €2 billion in 2000. TheUS firms invested $7.4 billion in the first-half of 2000 alone.
Companies like Alcatel, Intel, Reuters, Ericcson, Bayer, Nokia and Siemens have either
“established or revamped their venturing units.”...
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