The VC Factor: Data-driven Insights About VC-backed Start-ups in Europe (Invest Europe)

Summary

• From 2007 to 2015, investors poured around €35 billion into early and later-stage start-ups located in the 28 EU countries.p.8
• Over the last decade alone, around €51 billion was directed to innovative start-ups across Europe.p.4
• A dataset of 8,960 European start-ups receiving first-time VC funding between 2007 and 2015 was analyzed to measure real financial performance.p.11
• VC investments are concentrated, with 40% of start-ups operating in cities with over 1,000,000 inhabitants and 25% in smaller towns with populations under 100,000.p.4
• Without venture capital, almost half of high-growth start-ups (all-rounders, visionaries, and superstars) would have defaulted or fallen into a less successful growth profile.p.5

Key insights

1. The six largest sub-national regions in Europe accounted for one third of all venture capital investment activity between 2007 and 2015.p.8
2. The average venture capital investment round fell by almost 50% in volume in the aftermath of the 2007 financial crisis.p.11
3. The ICT and services sectors represented two thirds of all European VC-backed start-ups from 2007 to 2015.p.12
4. Early-stage businesses issued on average 90% more patents than later-stage businesses at the time of investment.p.15
5. Three years post-investment, early-stage firms' sales and staff grew by 227% and 100% respectively, compared to 32% and 30% for later-stage firms.p.17
6. By the fourth year after investment, 7% of VC-backed start-ups had defaulted, rising to 10% by six years post-investment.p.14
7. In the absence of venture capital backing, there would be more than three times as many laggard start-ups (10% vs 3%).p.29
8. VC-backed visionary and superstar start-ups outperformed non-VC counterparts in intangibles growth by 331 percentage points and 190 percentage points respectively.p.5