Why European angel investing still is local-it shouldn’t.
European angel syndicates are still hyper-local. It doesn’t cross borders. The vast majority of German angel investors will invest in german startup’s, and their French counterparts will invest in…
The majority of European angel syndicates are even more local and clustered around their ecosystems. Think Porto/Lissabon, Munich/Berlin, Amsterdam/Rotterdam, Ghent/ Brussels, Tallinn/Helsinki etc.
No, nothing wrong with that. Because yes, local ecosystems are beneficial for the invested startup’s enhancing angel investor local syndicate chances. Accelerators/coding schools (pool of talent) / density of available VC’s/infrastructure and last but not least a cluster of local startup maffia’s as jet 🚀 fuel of the local investment scene. Think Baltic startup maffia in “Tallifornia”-“Estonia with it’s five soon to be six/seven unicorns…”, Showpad & co in Ghent-Belgium, the Game scene maffia in Helsinki-Finland…
As a distant memory in Covid times, juice it up with local conference strong holders. North European readers: Slush in Finland & Latitude59 in Tallinn as strongholds. South Europeans readers: we all miss Websummit and sunny Lissabon, same for 4YFN Barcelonian’s. And many others.
It’s only natural that hyperlocal, local city-based angel syndicates fuels our European ecosystem works the way it works… After all, trust and personal connection and a local basis DO matter. People cluster with groups and persons they trust. In pre-covid times this is about literally taking your car and the typical one hour, no longer, drive away from its startup and its local city angel syndicate. Connections, sources and focus in your local ecosystem/neighbourhood.
Something is missing.
Enter the USA: one big market, one language and its huge superclusters: Silicon Valley, New York, Houston etc…
It contrasts with our European DNA. In my opinion, it mirrors through our local angel syndicates and startups.
Something is missing…in European angel investing. It shouldn’t.
Because how is it that so easily, in contrast, almost with one mouse click, one national USA angel syndicate (from NY city till Silicon Valley) is almost immediately formed (with and even without an http://angel.co/ Angel List).
Indeed Newyorker-, Texas-, Houston business angels are all, instantly, mixed up within the same angel syndicate in deep contrast with the local (European) one ecosystem “city only” syndicate.
Yes, we European angel investors can and must be proud of our newly formed European startup ecosystems (Amsterdam, Paris, London, Tallinn, Lissabon, Berlin, Helsinki and even Ghent 😉 *)
But again, something is missing. We under exploit all our strengths as in contrast with our international counterparts.
Example. Imagine you are a business angel living in Berlin and you find a great Berliner founder. Naturally, a local Berlin syndicate with Berlin angel co-investors is formed. Logical: you know & trust them and everybody is close. This will be reflected in the cap table: a 100% local Berlin syndicate.
But the point is…Could one even imagine, the situation in Europe March 2021, the same Berlin start-up cap table “naturally !?” beefed up with a few “European/international” angel of Amsterdam, Tallinn, Lissabon, London all in one cap table ?!? In deep contrast with the USA example above…where this seems to be only “natural”…
Which start-up, all things equal, would benefit most from day one? The 100% Berliner or the mixed (say 75% Berlin, 25% filled up with other European cities)?
Put your self in the shoes of the Berlin founder… he gets instant access to other eco-systems/commercial/investment connections…
The answer seems obvious, yet the European angel investing reality in 2021 tells differently. It shouldn’t.
Thankfully through new initiatives, the European system is slowly and steadily changing. First crowdfunding (Seedrs, Funderbeam, Leapfunder, …) then pan European VS seed funds (Mangrove, Point9,…), bigger region VC’s (Peak Capital in Benelux, Change Ventures in Baltics -just to name a few) however truly European international angel investment syndicates seems in 2021 still to be lacking.
New initiatives as https://www.globalsuperangels.club/
and http://siliconvikings.com/#about-us (fantastic name!)
start however to emerge. Other intra-country clustering initiatives (just to name a few): Core Angels group (Brazil/Portugal/Spain). https://www.coreangels.com/our-angel-groups
, Nordic Angel Program (a cross border investment and training program between Nordic Countries inclusive Denmark) https://www.nordicangelprogram.com/ as well as the specialized UK/Dutch madtech accelerator/investor www.collider.io Collider.io
Last but not least let’s not forget an intra-region connector/pioneer/accelerator: Startup Wiseguy https://startupwiseguys.com/
and it’s vast angel and VC network behind it.
Still, it’s a fact that exchanging deal flow and something as an ‘international European’ angel is still the exception behind the rule.
European angel investing is still local, but it shouldn’t.
It’s the authors’ opinion, however, that this will change in the next few years. I think it will grow organically.
What do you think? Please leave some comments and/or get in touch with me via Linkedin/medium.
*- Author is a Belgian citizen & but truly European angel investor believer. More one me: linkedin.com/in/thdesimpel