There are more and more startups every day: more and more people are choosing to start their own company instead of working for another – yeah, yeah, we’ve all read the articles. But here’s the deal: all those startups Hajj-ing their way to Palo Alto to get a piece of the pie, they’re gonna have a hard time scraping the pie tin for what’s left. What’s worse is that even those who manage to scream louder than the rest, mask their Vanity Metrics as Actionnable Metrics or hell, even create a legitimate startup, they’re gonna get Seeded by some super angel, leaving VCs with “crummy” startups (it’s a pun). So here’s what’s happening: slowly but surely, US VCs have begun looking outside of the Silicon Valley, and oh man, you wouldn’t believe what they’ve found – Spotify’s and Foursquares and Flipboard’s Oh MY! They’re not in Kansas anymore.
That sweet untapped Startup Gold…
With cities like Seattle, New York, and Boston well established as alternative wells of un-tapped startup Gold, VCs are creeping over to Europe with hesitation. As the VCs look our way, one of the big questions is: where will the Mothership land? While there are many great European cities- each one with a budding startup scene- there are really three cities that get the most buzz: London, Berlin, and Paris.
London: brought to you by TechCrunch and Google.
London offers a lot of great advantages. First and foremost, it is Anglophone, so no fear of language barriers. Along with this comes the ability to keep in touch with the goings on of the city without extended research or inside men. TechCrunch
UK Europe (haven’t noticed the uk.techcrunch.com redirect?) is a great example of this. TechCrunch Europe’s articles, which often detail goings on in London, are frequently reposted into the TechCrunch main site, giving a little press to the UK without extra effort. I’d be shocked to see a TechCrunch France article reposted into the main site in French, let alone translated into English. Google, also, has clearly made their decision on which city they will choose as the European Startup Capital: Google France launched Startup Cafe, and Google UK spends £10 Million to create Startup center… then again, you can’t put a price on a good domain name.
Berlin: Not JUST a bunch of Pirates….
With startups like SoundCloud coming into the limelight, Berlin’s getting more and more press about its startup scene. I recently went to the European Pirate Summit in Cologne, Germany and found that almost every startup attending the conference was based in Berlin – it clearly is the startup city in Germany. With more and more tech conferences coming to Berlin, the tech sector in Europe is more and more venturing out to Berlin.
European VC Paul Jozefak recently wrote a blog post about how Berlin is ripe for VCs, and yet only one VC firm has actually set up men on the ground. He seems to be in agreement that VCs are looking to new European cities and yet, despite Paul’s cheerleading for Berlin, there seems to be a real resistance by VCs to commit themselves to Berlin.
Paris: Making Moves Where it Counts
And then we come to Paris – now you all know this is a blog about how Paris is amazing, so I’ll save you the spoiler alert and tell you WHY Paris beats out these other cities. While London is busy investing in seven story buildings and not paying its media outlets, Paris is busy giving tax breaks to VCs and creating a centralized startup environment. Reuters recently published a detailed article on the Silicon Sentier, in which it pointed out a few interesting facts. In addition to mentioning French Entrepreneurs-turned-Angel Investors like Xavier Niel, founder of Iliad SA, Reuters noted that “France attracted 1.6 billion euro investment in venture or seed capital in 2010 and 2009, while Britain took in 1.4 billion and Germany 1.3 billion.” France also boasts the 2nd largest number of Startup Weekend events, behind the United States, with a Startup Weekend event happening almost every weekend somewhere in France.
While France may have to avoid the urges to clone, to build yet another online price comparer or to sell to a foreign company at the first chance, it is clear that there is no lack of talent, no lack of community, and no lack of VC funding – it’s just a question of whether Paris will be ready when those Alien VCs make first contact.
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