Lack of investors. Simple as that. Companies that run on deficit for 5-10 years can not survive in Europe. Facebook, twitter, etc. Wouldn't be able to survive in Europe, simple as that.
I hate the word unicorn too, but it's shorter than private market companies with a valuation of more than $1 billion :)
With regards to lack of investors I don't think it's as simple as that. If it was only a matter of investments then surely US investors or Asian investors could just come in with the money. There is something that makes European VCs risk averse and keep american investors out of Europe IMO.
First, thanks for ghostnote. It's an awesome app, worth every penny.
> I hate the word unicorn too, but it's shorter than private market companies with a valuation of more than $1 billion :)
Ah, is 1 billion the limit for the 'unicorn' definition? In what amount of time? :-) We have 7-year old companies, with 50+ employees posing around as startups everywhere these days. It's not related, but you know... Everyone is playing with words here :-P
> With regards to lack of investors I don't think it's as simple as that.
Of course you don't, otherwise you wouldn't have written a blog post... You could tweet! But, unfortunately, as most social phenomena is not that complex :-)
The reason we can't have a "unicorn" in Europe is that no one is going to support a company that it's expenses outsize it's turn-over even if this is because of extremely high growth rate.
If you're lucky enough, you might land some millions from some startup event. But even they, ask to see growth (in terms of users) and (hehe) immediate ROI.
In startup Istanbul 2014 the no1 startup which received investment was the only company who didn't actually need it... It was already generating way more than it could burn. So it was a very easy bet.
Unicorn just pokes my brain the wrong way, like bad kerning. On the other hand, it does describe how rare these things are, which I feel does make it an accurate term- it also explains how companies like this are essentially legends.
It's an annoying term, but it works (unfortunately)
I like the term because it implies some of the valuations might be mythical...
One of the differences is European investors tend to think on the basis that if it walks like a horse, neighs like a horse and only actually does the same job as a horse ....
It is a disliked term, because it's a buzzword, which get really hyped up in the beginning until everyone can't hear it anymore. If you still use it after the initial hupe, it makes you sound like a tool. That's the thing with buzzwords ^^
"If it was only a matter of investments then surely US investors or Asian investors could just come in with the money" - grand-parent is saying they don't, you're saying they could.
I dunno, because if it was as simple as that, then those American VCs would be investing all over the US already. As is, most of them are just staying in their little bubble.
Not all but there are indeed a disproportionate # of ex-financiers vs the composition of Valley firms. I did this analysis a while ago and it was pretty striking when graphed. The only consistency was MBAs in VC roles across the board.
> Because investors in Europe are a bunch of pathetic spineless banker types.
Or investors in Europe have enough opportunities to generate more than the typical return on investment of VC? The average VC ROI is really low, it gets outperformed even by passive index funds IIRC.
Edit: Found the source.
"Yet 2013 annual industry performance data from Cambridge Associates shows that venture capital continues to underperform the S&P 500, NASDAQ and Russell 2000."
The average is meaningless. Venture capital follows the power law. The top 5-10 firms in the U.S. will realise 95%+ of the returns for the entire industry. The Benchmarks, Sequoias, A16Z, etc.
The top companies only want to go with the top investors and vice versa. I wish they'd publish data. I'd love to see Benchmarks ROI on their recent fund, it's likely going to be the best performing fund of all time.
ps. I hate the word 'unicorn'.