Europe needs more entrepreneurs to reinvest the capital they earn from exits into new start-ups. Their experience of turning an idea into a world-class business will feed the venture capital ecosystem on the continent, and will help create the next wave of innovative companies to draw investors and buyers from around the world.
When I attend the Invest Europe Venture Capital Forum in Berlin next month, I will be discussing with colleagues the next stage of development for venture capital in Europe. There will be a lot to consider about recent exits and what the industry can learn from those experiences.
In the last month, we have seen the initial public offerings of online shoe retailer Zalando and technology incubator platform Rocket Internet. The shares have had a tricky few weeks in a volatile market. But it is early days, and the evidence shows that venture capital backed companies perform strongly over the longer term. The exits are a positive sign of innovation at work and should lift the profile of the venture capital culture in Europe. There is no shortage of new ideas, and there is capital in the hands of funds, high net worth investors and corporate groups to develop those concepts.
What we need to do now is to incentivise successful business founders, who have taken a company from concept to exit, to create and back new companies. In doing so, we will see a “generational” leap in both knowledge and capital coming into the industry.
Above all, encouraging entrepreneurs to reinvest in new projects will ensure that experience and skills are not lost. This will lead to a stronger ecosystem that can generate more successful companies while proving to investors at all stages in the lifecycle that European venture capital is a force for innovation and growth over the long term. Join me to debate how we prepare the industry for the future at Invest Europe Venture Capital Forum in Berlin on 6 November 2014.
Dr. Michael Brandkamp, Managing Director, High-Tech Gründerfonds