Simon Cook is a man with a mission these days. A founding partner of Cambridge and London-based Esprit Capital Partners, Cook has been meeting with investors in the US and giving them a presentation detailing the unheralded strength of the European venture capital scene.
Cook argues that Europe’s big promise lies in the technology sector, and he’s been using one of the most ubiquitous products in the world today as an example. Part of his presentation involves a dissection of the iPod, showing that a large proportion of the product comes from products or technologies made or developed in Europe. The parts, from such companies as PortalPlayer and Philips, make up six of the iPod’s 15 components, according to Jeffries & Co. and Cook’s own research.
So why haven’t LPs seen big returns yet from these emerging technology companies? Cook argues that there has been some considerable success but it hasn’t been shouted from the rooftops. He points out that exits in Europe over $100 million between 2004 and 2006 have had a value at exit of over 6x the capital invested on average. Such exits have included big attention-getting names like Skype and VistaPrint, but also include telecom companies like Iliad and semiconductor companies like CSR.
As European IPOs see more success and entrepreneurs begin to be sourced from Eastern Europe, Cook says, Europe’s VC environment could be on par with that of the US within a few years.