Rise of the European SuperAngel

Poor European entrepreneurs.  They can only dreams of SuperAngels, salivate from afar about the land of Ron Conway, the cool shirts of Sacca and the awesome dollar power of Angellist, whilst they're stuck with old school business angels or fee-charging networks, whilst European VC's, never a risk taking breed as we know, have all retreated back to the safer havens of "venture growth".  They can only wish there was a seed bubble. No wonder that governments feel there is an "equity gap" they need to fill, or that entrepreneurs feel compelled to leave for the promised land.  Everyone wants to be Bart Decrem (with better glasses, like mine), move over there and make it happen !

The truth is, we've been seeing Euro SuperAngels emerge for a while now.  When I came across Nic's question on the topic, and Fred Wilson's thoughts on London, I thought it would be worth writing them down.  My question is: "are we Europeans guilty again of beating ourselves over the head with a stick instead of focusing on, leveraging and celebrating what's there ?"

Old School, New School, Same School

Of course Angel investing has always been out there, and there's more of them than you think.  Angels come and go, those with longevity would include Stephen Bullock or the Blakey brothers at Avonmore.  Angel groups have been along as long as angel investing, such as the powerful Cambridge Angels, with among their ranks the likes of Robert Samson or Sherry Coutu (an investor in Zoopla). 

Now that's not quite what we are talking about though is it ?  It helps (Sherry is an uber-connected person), but only to the extent it's part of a broader ecosystem where, to quote Ron Conway, "every entrepreneur should get funded".  Robin Klein, in a shocking bid to divert money to those who might actually need it, even wrote an open letter on the topic asking for money for seed companies (instead of directing it at VC's, reflecting a a sentiment I echo violently). 

Guess what, the market is more efficient than you think

What's been striking to me is how fast the market is reacting.  The new incubators, co-working spaces with money, Super Angels fund we have seen emerge in the last year is amazing !  Let's take a quick look:

UK, I'm OK !

• TAG, Robin and Saul Klein's seed vehicle, now joined at the hip with Index Seed
• Atomico, another significant example of SuperAngel investing; even in their grown up, $165M institutional fund clothes, they keep doing early deals fast and with a global outlook
• ProFounders Capital: Birch, Hoberman and co's own Founders Fund
• Let's see if Notion Capital goes for SuperA goodness 
• Stefan Glaenzer and Robert Dighero's WhiteBearYard, a co-working space cum cash
• The Difference Engine in the Northeast
• Did I mention St John's Innovation Center in Cambrige ? :-)  And how's this for old skool ?

The French just do it better

Being from the land of beer, fries and straight talking (no, not Holland), I do love to lambast the French for their nasty habits including endless board meetings.  I do have to say they do certain things well, one of which is creating SuperAngel funds.    Before they had their national Loic of course, but sadly he moved.

• Let's start with Kima Ventures, creation of a talented and rich recluse (Xavier Niel) and a talented and highly visible web native (Jeremie Berrebi).  Net result: 100 startups in two years.  OK, so Dave McClure still 5X's them on the objective, but how's that for getting some attention.
• Then we have ISAI, "the fund by and for internet entrepreneurs".  The who's who of French internet entrepreneurs is invested, including Pierre from PriceMinister, Ouriel and others, and run by JD Chamboredon, who smokes a lot but is damn good.
• I thought I should add Dot Corp Asset Management, by the pixmania founders, although 4.8M into Deezer is really UberAngel territory, as well as YamInvest (and its VC outfit TIME) and Francois Veron's NewFund.  Whether they behave like superangels, time will tell.
• Final mention to Jaina Capital by Marc Simoncini, founder of Meetic.  I was pleasantly surprised to see MC Levet joined him and am looking forward to seeing how these guys invest and operate.

Like good SuperAngels, they collaborate too: Jaina is in Ouriel's company (Appsfire) whilst Jaina and Kima invested with Seedcamp in travel startup Kukunu (which launched recently; check it out)

Deutsche Mannschaft

• The Germans have been doing the mass startup incubation thing for a long time, with the Samwers being quasi legendary for their ability to roll companies off the press at speed.  Ok, so it's not exactly creative, but their unmatched work ethic and dedication has generated pretty systematic results.  Check out European Founders Fund to see the brothers' work.
• TeamEurope Ventures, brought to you by Lukasz Gadowski, Pawel Chudzinski and co, is an incubator cum funding at la Betaworks (kind of), which does not shy away from recycling capital early (brands4friends) and is starting to show track record.
• Hanse Ventures in Hamburg recently launched, founded by Jochen Maass and Sarik Weber.  
• There are others doing similar things like pioneer Oliver Beste of FoundersLink or more classic angels like Oliver Jung.
• Very exciting is the recent addition of #hackfwd, the new brainchild of XING founder Lars Hinrichs and team.  Geek enough for ya ?

Germany is happening again.  I was recently at superfun betahaus.de.  No money there but boy, Berlin feels as exciting as when Nick Cave was rocking its cellars.

And there's others: 

• OpenOcean from Monty "MySQL" Widenius
• LifeLineVentures (Finland)
• Rainmaking and its Startupbootcamp (DK)
• SeedRocket (Spain)
• Mountain Super Angel (CH)
• let me know who else we're missing here. 

 

The point is: SuperAngel-style money is coming, Paul Graham's vision (read the essay) is a touch closer than it was last year.   It's all happening in a town near you, folks.

UPDATE

My examples, I am being told, are the exception rather than the rule.  I recognise that.  The reality of angel behaviour is something we need to deal with.  Plenty of US angels are connected and fast.  European angels are (generally) hard to find and slow.  What we need to do is 

(a) get them more visible and better connected (more on this this soon through Seedcamp), and too bad for their life work balance.  The ecosystem demands it ! 

(b) force them all to spend a day a way at their local co-working space such as London's awesome TechHub or Aalto Venture Garage and hold Office Hours :-).

Oh, one more thing: I did not mention Seedcamp because I am on the board there.  Seedcamp is the best seed funding vehicle for entrepreneurs I know.  How's that for a falsely humble disclosure and full-on SEO power :-) ?

Comments

[I can't wait to read much more from you. This is really a terrific website.]

I can't wait to read much more from you. This is really a terrific website.

[Lukas Weber]

Also not so old school: http://www.investiere.ch/en in Switzerland

A new breed of private investors has invested several 100k through the platform in the first couple of months.

[Wolfgang]

Great post Fred! Probably one of the most comprehensive and up-to-date posts about European Angels in a long time. You might want to add the guys around b-to-v, Jan and Florian

[Lars Carstens]

Fantastic mapping, and yes, let's celebrate the small progress rather than bash. Some Northern European people to mention:
* LOTS (Love of Technology) in Finland is, like Lifeline, churning out some great projects.
* Recent entrepreneur-cum-VC Nikolaj Nyholm is rumored to have been doing a handful of really interesting seed deals in Northern Europe since joining Sunstone Capital half a year ago (none appear on their site, tho)
* The Southern-Swedish angels like Hampus Jacobsen (TAT) and Martin Gren (Axis) are super-active and having their money geared by the Swedish Entrepreneurs Fund (gov't money)
* Christophe Maire and other of the old Gate5/Nokia people in Berlin are doing some crazy (good) investments.

[Itamarl]

I can't comment on the future rise of SuperAngels but having raised funding for Kukunu (thanks Fred for the mention), I can witness the value these SuperAngels can add to the business:
- Network: they have all built successful businesses and bring with them a great network in many industries as well as within the VC community
- Advisors: these new funds are not just investment vehicles for SuperAngels, they have built structures that can support entrepreneurs. Jeremie (Kima) and MC (Jaina) are of course very present, but Marc is also spending a significant amount of his time in Jaina.
- Money: While Kima is indeed very focused on Seed investments, Jaina is a large fund that can support the business in the following rounds.

And then there is also Seedcamp, a different beast but I can only agree with Fred, Saul and Reshma are doing an amazing job there, and we're lucky to have them as an investor.

[Fred Destin]

@ Mathias: have not seen Mountain Partners in market much so not included,

Added Hanse and a few others.

@azeem: yes, I know. But apart from Bay Area / Silicon Valley, not many places have a ton a fast, good angels. Maybe Tel Aviv ? Would not take a monster change in behaviour for these folks to embrace this paradigm.

[Azeem]

Fred, Nice optimistic post but deal rates, funding sizes and number of participants are all much lower than in the US. Which means a much tighter market for entrepreneurs (with less supply of capital) than we would see in the US, which in turn leads to longer funding cycles.

Aydin, Jeff, Ron, Dave -- averaging 50+ investments and a dozen+ exits in the past year.
Let alone Conway.

Casual angels in the Bay Area (who don't consider themselves 'super angels') will regularly do 5 to 10 investments per year. Syndicates are broader, funding deeper and it comes earlier.

If you unpick some of the great groups in the UK, you'll see the deal rate is just much slower than in the US, as well; and pricing is *far* below what SuperAngel's come in at in the US.

Take a look at the typical terms of a US deal -- quick convertible note with a low discount (20%) and cheap coupon; with a maximum conversion price to protect the angel (typically around $3m).

Compare that to Europe--where I've heard stories of angels insisting on 25% of the company for GBP100k.

That certainly doesn't reflect the difference in costs or risks.

What surprises me is that we don't see more US superangels taking up opportunities here.

[Sarik]

You´re missing www.hanseventures.com startup accelerator in Hamburg with 10 portfolio companies so far.

[Mathias]

wwww.super-angel.ch

www.mountain-partners.ch

[Mathias]

You forgot Mountain Super Angel (www.super-angel.ch) - it's THE blueprint for all Germany based so called "Super Angel Funds" initiated by Dr. Cornelius Boersch's Mountain Partners Group (www.mountain-partners.ch)!

Facebook: http://www.facebook.com/pages/Mountain-Super-Angel-AG/339139922000

[Fred Destin]

@shafqat: most of the people i mention i consider highly reactive, but much needs to be done. my point is around velocity of chance and arrival of new players. we need more and better connectivity, but compared to even 2 years ago it's feeling very different.

@bcurdy: very few are good mentors, some are (william reeve, sean park stand out in my experience)

@mario: was not sure whether seedcapital.pt is funded or not ?

[Florian Komm]

Excellent post!

[Pvzed]

Great post! Having been in the European tech VC world for some time and now back in the US it has been very interesting to compare the two ecosystems. Other than there being more angels and capital in the US in general, I think a significant difference is with regards to communication. US angels are typically more open with their communication and are very good at self promotion. Perhaps a cultural difference. US angels also syndicate together more aggressively than I have seen in Europe. This can create a multiplier effect and ultimately push more money into start ups. In Sweden there have been groups such as Sting Capital and Norway is well known for its prolific angel investors. There is clearly a great opportunity to continue to "institutionalize" angel and early stage funding to a much greater degree. If I were to set up a new fund in Europe today this is where I would focus.

[Mario Valente]

>let me know who else we're missing here.
>

We're missing: Portugal, http://maverick.pt/ and http://seedcapital.pt/

-- MV

[Shafqat]

Good post, but I still don't see the anecdotal evidence of the superangel phenomenon taking off. For our latest round, we were sent out to angellist (which has some European investors) and I also used my network for intros to a lot of European angels. We had 30 investors reach out and schedule meetings, and had multiple term sheets within a week. During that time, the number of European angels who reached out to me: ZERO. Perhaps my company sucks, but it's still telling that the best investors I know in the US were interested, while not a single European investor even had an initial discussion. I guess time will tell who was right, but something seems strange.

[Bcurdy]

Nice post. I do agree that something is happening in Europe. You can feel it! It's a very exciting moment. I don't think though that money has ever been the biggest issue of European startups. Plus money alone doesn't make an angel. To me the real question is: are those people good mentors? That's what we need most. I can find money fairly easily but finding a great mentor is a whole other story. As, to be honest, I don't hear or read or see the people you mention much, I have a hard time deciding how excited I should get exactly about each of those angels/ early stage funds. Any take on this ?

[Vcwatch]

Having just completed my first angel investment in the UK (Edinburgh company), I'm happy to contribute to the trend !