Doubling down on European Venture Capital

MAY 19, 2016

Share

Why I decided to take on the role of Managing Partner at Balderton Capital

Bernard Liautaud, Managing Partner, Balderton Capital

I joined Balderton Capital’s partnership in the summer of 2008, excited to help European entrepreneurs build original, profitable, world-beating businesses.For the previous eighteen years, I had been based in California and Paris (and in many places between!) building my own company, Business Objects. The business started as two friends in a small office in Paris, and became the world-leading provider of business intelligence, employing over 6700 people, serving 45,000 customers, and making $1.5bn of revenue in 2007. Early 2008, we announced that SAP had acquired Business Objects for $6.8bn.When I first became a European VC, I did not receive the accolades I was hoping for. While my friends and colleagues shook my hand and wished me good luck, they were keen to remind me that I was “an entrepreneur, not an investor”, and that I had “gone to the dark side!” Most pertinently, perhaps, was the common reaction that “Venture Capital in Europe simply does not work.” A forthright and damning indictment of the industry I was soon to join.To be honest, I had my own doubts. Could I be any good at this? Were my peers right – was there a real opportunity in Europe?But I was convinced that the Europe to which I returned was full of potential. Although the general feeling was that the continent’s technology industry was under-invested, I felt that this meant the opportunity for technology venture capitalists was substantial. I believed that we could inspire European entrepreneurs to have global ambitions, and that we could create a method of supporting companies in Europe that was inspired by first-hand experience in Silicon Valley. In turn, I believed we could create a high return venture capital firm in Europe, and that Balderton was the right place to make this happen.Even though I knew Europe was the smart place to be, it is true that it was not yet brimming with the entrepreneurial energy with which the continent’s capital cities are now familiar. The average European entrepreneur was happy to exit their business for a figure around $100m, rather than to push towards a billion dollar valuation. The idea of building a billion dollar business was, for most, incomprehensible. The idea of taking a company public was a further step removed from reality. To me, it seemed like it wasn’t in the DNA of European entrepreneurs to challenge the upper-echelons of the status quo.Returns from in European venture were notoriously bad. There were few entrepreneurs, no IPO market of any significance, and no large European tech companies to act as acquirers of fast-growing, innovative startups.Eight years on, the change is remarkable. The ambition of European entrepreneurs has evolved beyond recognition. They want to build large and sustainable businesses. They think globally. They don’t want to sell out early.

Eight years on, the change is remarkable. The ambition of European entrepreneurs has evolved beyond recognition. They want to build large and sustainable businesses. They think globally. They don’t want to sell out early.