VC per capita, Europe: $7, U.S.: $72, Israel: $144.

http://blogs.wsj.com/tech-europe/2011/06/14/technology-is-cheap-as-chips-but-venture-capitalists-fail-to-cash-in/

by friism • 15 years ago

58 46 15 years ago

blogs.wsj.com

ajju4• 15 years ago

I want to see this number for just Silicon Valley.

pchristensen2• 15 years ago

Well, the SF bay area 2.5% of the country's population (7.5M/300M) and ~50% of the VC, so 25x$72 ~= $1800/person.

ajju4• 15 years ago

Thanks, an order of magnitude larger per capita than Israel, as expected. I wasn't aware of the 50% number and too lazy to Google it!

Tyrant505• 15 years ago

Do you happen to know how NYC compares?

ansy• 15 years ago

I wonder how much of Israel's VC money is domestic and how much pours in from the US.

nandemo• 15 years ago

There's some info here but the relevant part seems garbled.

http://en.wikipedia.org/wiki/Venture_capital_in_Israel#Chara...

Israel’s venture capital industry has about 70 active venture capital funds, of which 14 international VCs with Israeli offices. Additionally, there are some 220 international funds, including Polaris Venture Partners, Accel Partners and Greylock Partners, that do not have branches in Israel, but actively invest in Israel through an in-house specialist.

In 2009, the Life Sciences Sector led the market with $272 million or 24% of total capital raised, followed by the Software Sector with $258 million or 23%, the Communications sector with $219 million or 20%, and the Internet sector with 13% of capital raised in 2009. [6]

roughly 78%-88% of investments that reached Israeli high-tech companies in 2001-2008 were done either by Israeli VC firms (the 38%-49% above) or by foreign or other entities in syndication with Israeli VC firms: 37%-50%.

beagle32• 15 years ago

> Greylock Partners, that do not have branches in Israel

I'm not sure when that was last updated, but Greylock has had an active Israeli office for more than two years now.

thelonecabbage2• 15 years ago

For what it's worth, I've personally met with 3 European angel funds in the past 2 weeks. One of which was actually government backed corporation (that had been given explicit permission to enter Israel)

imjustatechguy5• 15 years ago

Annual US Aid to Israel is $382.97 per Israeli and going up.

tkahn65• 15 years ago

I'm not sure where you're getting your numbers from. At $30 billion over the next 10 years, per year, US aid to Israel is $412 per Israeli [1]. And of course, that will go down with population increases.

And another thing to note is that that money is in the form of military contracts with American companies. It is not used to pay for Israeli infrastructure or social services AFAIK beyond a separate chunk of money ~$40 million to help pay for Israel's immigration problem [2].

1. http://www.wolframalpha.com/input/?i=3+billion%24+%2F+popula...

2. http://en.wikipedia.org/wiki/File:US_aid_to_Israel.gif (note that economic aid to Israel was stopped in 2007)

imjustatechguy5• 15 years ago

I got my numbers from the bottom of this page which shows that US Aid to Israel is increasing through til 2013:

http://www.jewishvirtuallibrary.org/jsource/US-Israel/foreig...

I got my population number of Wikipedia:

http://en.wikipedia.org/wiki/Demographics_of_Israel

So to sum up... my comment above is correct.

maayank• 15 years ago

"And another thing to note is that that money is in the form of military contracts with American companies"

This.

People are usually oblivious that it's another way of transferring money from the government to the military industrial complex, not just supporting the single democracy in the middle east.

leyfa• 15 years ago

I have no doubt that VC money is the lowest in Europe of those three. I wonder though how significant this metric really is, especially if the large developping countries of eastern Europe are included. Wouldn't a VC money per startup/founder be more interesting?

imjustatechguy5• 15 years ago

Depending on definition Europe can have more than 700 million people and it often includes Turkey and Russia:

http://en.wikipedia.org/wiki/Demographics_of_Europe

But I would think that they are referring to European Union nations???

http://en.wikipedia.org/wiki/File:Europe,_EU,_candidates,.pn...

Also does the VC numbers for Israel include the population of the Israeli occupied territories or just those who have full Israeli citizenship?

ig13• 15 years ago

What the article misses is that London with roughly 1% of Europe's population get's 30-40% of the VC financing in Europe.

So based on those figures London's VC per capita is in the region of $200-$300 (London has a similar population size to Israel).

enjo• 15 years ago

What does that look like if we just do the valley?

ig13• 15 years ago

Can't find the data for the valley but I imagine it would be in the $1500-$2000 range.

sien• 15 years ago

The flipside of this is that Europe should probably not be compared to single countries like the US or Israel.

The comparable entities are North America, the Middle East and Europe. Then things would change.

Individual countries in Europe, particularly the Scandanavians, have loads of small IT companies funded from VC capital and as others have said government grants. The Dutch, the UK and Germany would probably also do reasonalbly well.

thom• 15 years ago

So what you're saying is that for the majority of cities in the UK the situation is even worse.

Well, that makes me feel better.

themal• 15 years ago

London's the heart of the UK's economy. That's why businesses put their sales offices in London, while the real work is done cheaply elsewhere in the country.

JohnsonB• 15 years ago

I assume VC per capita is a used as a metric because it's a useful way of assessing how much economic value the whole country can extract from the startup scene, in the same way that GDP per capita is a more useful measurement than total GDP at assessing a country's quality of life. Israel may have a similar concentration of startup companies in a city (like Tel-Aviv) and the math would then work out to a higher per capita VC investment than London.

radagaisus• 15 years ago

Actually the start ups in Israel are pretty spread out, the consequence of Tel Aviv's rent being high. Really high.

thelonecabbage2• 15 years ago

In that case wouldn't it be better to compare London to Tel-Aviv?

tomx• 15 years ago

Is MS's European chairman genuinely concerned about the European economy and education system? In that case, he might have more success at these goals, by becoming a politician instead.

Or... are these economic observations somehow self serving? Perhaps the lower levels of VC investment in Europe (per capita) are inconvenient for him: Implying European investors should greatly increase their investment levels. Would he be happy if VC levels did increase 10x to US levels... But funds were largely directed at companies that MS did not have involvement with?

rdl• 15 years ago

Microsoft BizSpark is definitely genuinely concerned about the European startup ecology and education system, and Microsoft itself is large enough that the only way for it to grow/sustain sales is by growing the market as a whole, so yes, the European chairman definitely cares about the European economy and education system. Any big-company executive does.

The whole point of capitalism is that it's both self-serving and public good.

vetleen• 15 years ago

This doesn't quite capture the picture because Europe often have public subsidies as well. For instance the publicly owned "Innovation Norway" in Norway has a budget of NOK 1,5 billion, which translates to about US$60 per capita. Most of this is spent on subsidising entrepreneurial ventures.

_delirium• 15 years ago

I definitely see this in indie games. Things like the Nordic Game Fund are really nice compared to what's available in the U.S., although Canada is also pretty generous with funding small videogame startups (especially Quebec, which has additional province-level funding). In the U.S., you can only really make it if you: 1) bootstrap; or 2) target social games or "gamification", which are the only things VCs care about. Companies more in the Playdead (Denmark) vein rarely get funding, although the U.S. does have quite a few bootstrapped success stories--- just looking at Santa Cruz, CA, alone, both Gaijin Games and Team Meat, makers of bit.trip and Super Meat Boy, respectively, are recently bootstrapped and successful.

For early-stage seed funding, there are also all sorts of target-agnostic entrepreneurship programs in Europe, which will kick $20k or something your way if you have anything approximating a reasonable business plan; makes it much easier to just strike out on your own without having to do consulting work to fund it. On the other hand, the fact that the U.S. has more than its share of successful bootstrapped indie-game companies suggests that either the culture or ecosystem is doing something positive there even with VCs being absent.

VC per capita, Europe: $7, U.S.: $72, Israel: $144.

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