I've covered this topic before, obviously, but this seemed like an excellent article, worth linking to.
In short, things haven't changed much since I posted those articles 4 years ago: European VCs are still slow to respond, slow to make decisions, risk-averse, overly focused on formalities like business plans, etc.
But that doesn't deter European investors from requesting a full deck, including a three-year business plan as a prerequisite to any form of conversation. If your path to profitability is not already proven, you will have a hard time getting as much as a phone call. From what I saw, in the US, the focus is on the potential market, the team, and the product. The rest will be sorted out at the series A/B stage. I tried the European way before getting into Y Combinator, with the business plans and absurd forecasts.
What I can tell you is this: when you have no idea whether you're building something people want yet, trying to paint your startup as a Fortune 500 company feels very wrong.
Perhaps the most telling part of the article is implicit, though: the article talks about early-stage capital, and throws around the figure of $3.1m. By UK standards, certainly, that's a Series A, not early stage capital. Early is up to maybe Â£500k (that'd be a large seed round).
The UK has largely solved it's early seed stage funding gap, thanks to SEIS, an incredible investor tax break that has basically flushed the UK early seed market with money (my thoughts on it, as an investor, are here.
However, later stage funding is still a problem. Personally, when considering whether to invest in a business, part of my decision process is to think whether this startup would really be better off being in the US. This is not true for every business. Investing in a competitor to, say, tomorrow's Dropbox, based in the UK, seems like a losing proposition to me: in that space, there will already be half a dozen competing companies based in Silicon Valley, and all of them will have the significant advantage of much better access to funding, in a business which is likely to swallow mountains of cash because it has strong network effects and so rapid growth is favoured.
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