Ten years ago VC funds in Sand Hill Road wouldn’t “even fly to Los Angeles”

Lucas Timberlake, general partner at Fintech Ventures Fund, the US VC that has a focus on fintech and insurtech, and Ricardo Schäfer, early-stage investor and partner at Revolut backer Target Global, discuss the differences between European VC and US VC funds while also offering insights into the European fintech market. Timberlake, though, says the most prominent difference is between US West Coast VCs and US East Coast VCs, which are more aligned to European VCs. Timberlake says, generally speaking, US West Coast VCs are looking for binary outcomes, while US East Coast and European VCs are more focused on revenue and loss aversion. Schäfer said it was difficult to generalise about the differences between US and European VC funds, given fund-to-fund differences. That said, he said European VC funds tend to be a little smaller in size. The pair also discuss the trend of US VCs, such as Sequoia and General Catalyst, opening London offices, Schäfer said: “When I first went to the US ten years ago, I remember talking to funds on Silicon Valley's Sand Hill Road and they wouldn’t even fly to Los Angeles. Europe was really kind of far away.“Of course, if you are on the ground and you can play at seed, and if you hit the winners you will obviously be a lot better at deploying capital because you have to build relationships.”

He said this strategy of US VCs ploughing more resources into Europe was seeming to work. Timberlake says: “I think it makes sense specifically for the multi-stage funds to have a presence in Europe from seed onwards.” On whether the trend of US VCs investing heavily in Europe would continue, Schäfer said: “Obviously what you have seen over the last couple of years is big fintechs emerge out of Europe. If you look at Wise, if you know look at Revolut, obviously Klarna and a bunch of others. That has definitely created a lot of attention.”