

VC per capita, Europe: $7, U.S.: $72, Israel: $144. - friism
http://blogs.wsj.com/tech-europe/2011/06/14/technology-is-cheap-as-chips-but-venture-capitalists-fail-to-cash-in/

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ig1
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).

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

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sien
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.

~~~
abbasmehdi
_The comparable entities are North America, the Middle East and Europe. Then
things would change._ <\-- No, here is why, if you're in Israel you have
access to all that it has to offer, same for the US, and same for Europe (EU).
The point is 'how much money is there to go around / potential recipient.'

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ig1
Europe is far less a single economic block than the US or Israel. An American
VC is far more likely to invest in a London based startup than one in say
Germany, purely because of cultural and language barriers.

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vetleen
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
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.

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

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

[http://en.wikipedia.org/wiki/Venture_capital_in_Israel#Chara...](http://en.wikipedia.org/wiki/Venture_capital_in_Israel#Characterization)

 _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%._

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beagle3
> 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.

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

~~~
tkahn6
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...](http://www.wolframalpha.com/input/?i=3+billion%24+%2F+population+of+israel)

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

~~~
maayank
"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.

~~~
imjustatechguy
Very true.

Most people don't know but the most controversial weapons that Israel has used
in recent years, such as the cluster bombs dropped in Southern Lebanon [1] and
the white phosphorous used in the Gaza Strip [2][3] were both made by the US
and given to Israel through the US Military Aid program.

[1] <http://news.bbc.co.uk/2/hi/5299938.stm>

[2]
[http://www.timesonline.co.uk/tol/news/world/middle_east/arti...](http://www.timesonline.co.uk/tol/news/world/middle_east/article5575070.ece)

~~~
tkahn6
> and the white phosphorous used in the Gaza Strip [2] were both made by the
> US and given to Israel through the US Military Aid program.

Also very true. And it should be noted that WP usage is legal under
international law provided that it is used as a smokescreen and not a weapon
[1]. And the reason it is provided by America is because it is used by NATO.

1\. <http://www.gonzagajil.org/content/view/194/26/>

~~~
imjustatechguy
The problem with WP was the way it was used in Gaza:

[http://www.amnesty.org/en/news-and-updates/news/israeli-
army...](http://www.amnesty.org/en/news-and-updates/news/israeli-armys-use-
white-phosphorus-gaza-clear-undeniable-20090119)

~~~
tkahn6
Yes forgive me if don't trust Amnesty international on Israel (or any Western
country for that matter) [1]. Also, WP is legal when used in a civilian area
if that's where the battlefield is (Israel did not choose to fight in an urban
area, Hamas did). See my same link above.

1\.
[http://en.wikipedia.org/wiki/Criticism_of_Amnesty_Internatio...](http://en.wikipedia.org/wiki/Criticism_of_Amnesty_International)

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ajju
I want to see this number for just Silicon Valley.

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pchristensen
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.

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ajju
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!

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c2
I don't think that's surprising is it? Silicon Valley is known to be the best
place for VC in the world. I'm sure if you draw arbitrary lines around the
hottest investment communities in Israel the numbers would also be much more
even.

That Israel as a country beats us in per capita investment is an interesting
figure which we should all consider.

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highfreq
On the other hand the population of the bay area is quite comparable to that
of Israel.

Smaller countries tend to have more specialized and targeted economies. If
Israel were to attempt to play in all the industries that the US does, they
would do very poorly at almost all of them.

Much of the US economy is in large established technology and manufacturing
companies, where VC no longer has a role.

I would expect that for every possible region of Israel, it is possible to
find a region of similar population in the bay area that has a higher per
capita VC investment.

~~~
Peaker
But Silicon Valley is still far more specialized than Israel.

Most Israelis are not in hi-tech industries, so it is unfair to compare SV to
Israel.

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leyfa
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?

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imjustatechguy
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...](http://en.wikipedia.org/wiki/File:Europe,_EU,_candidates,.png)

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

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tomx
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
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.

