In 1997, when I got started in the European VC, environment was more difficult and simpler at the same time.
At that time competition was very limited (even though this is still the case today in some geographies such as Italy) but entrepreneurs less "ready" to take the jump and less familiar with how to deal with professional investors.
However because of the less "structured" environment it was relatively easy to discriminate between "good and bad", both in term of people and in term of opportunities. Two years later in the middle of Internet bubble with herds of MBAs, consultants and bankers jumping on the wagon, people assessment started to be much trickier... but the situation got back to normal within a few months as the bubble explosion cleared up the environment of wannabes entrepreneurs.
On the deals side what we have seen constantly in the last 10 years is the dramatic shortening in what I use to call "time to copy". When we seed funded Selftrade (first independent online broker in France) in late 1997, US based leader ETrade was not only up and running but already public with multibillion market cap. If a VC could cope with the idea that Internet adoption would pickup in Europe it would appear pretty obvious (though many things appear obvious in retrospective…) that Seltrade could be a blockbuster (company eventually IPOed in early 2000 and reached mkt cap in excess of 1,0 Billion).
Today (unfortunately) those copycat deals have become very reare. Internet demographics being more homegeneuos and information flowing faster have almost zeroed this "time to copy". Not only copycats are popping up before a business model is proven from an economic standpoint, in many case they do appear in different continents and countries well before they have even proved to have some kind of traction in term of usage. In many case its enough for a new concept to obtaing just funding from a reputable VC to witness a mushrooming of copycats in other countries.
Consequences of this are twofold:
a) If a VC funds a breaktrough company better to stay silent until ready to push hard on accelerator
b) VCs should be very very careful in funding copycats as many business model will in my view proof to be wrong everywhere (irrespectively of geography).
Fortunatly for us in Europe we are seeing more and more original ideas and b models getting started here….
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