It is better looking closer to home, according to Dealroom and LocalGlobe’s report
2 min read
When you have an idea about business it is always a question where to look for startup funding. Of course, if you are not an heir to family wealth.
One of the most difficult hurdles meeting any ambitious European startup is how to choose the right VC firm. Someone to support your next funding circle. According to Dealroom and LocalGlobe’s report, it is better to seek the vicinity of the home. The report reveals that smaller funds always show more interest in your development.
“Smart founders understand that you want investors who are not absentee landlords and can sit down and meet you,” said LocalGlobe cofounder Saul Klein.
This report from Dealroom and LocalGlobe validated and examined 257 of the Series A arrangements.
The most unexpected conclusion is that European venture capital companies supported all 257 of the Series A arrangements between 2014 and 2018. Despite alleged increasing interest in Europe, US companies didn’t support a single one.
But this sound somehow logical. When you are at an early stage of fundraising, the first thing you would do is to look around the neighborhood.
That is the reason why some of Europe’s most prosperous startups are in small towns, not in capitals.
According to the report, the initial stage investment market in Europe is in strong form. The total number of Series A rounds rose from 40 to 73 between during the past 4 years. Their total value increased from $332m to $731m.
Where to look for startup funding
The well-known fact is the major startup hubs are in Berlin, London or Paris. But colonies of these activities are also Munich or Milan. Tel Aviv in Israel is also an extremely welcoming place for domestic startups. Speaking about Europe, have you ever heard that some of the most successful startups are in small towns like Montpellier in France, or Oulu in Finland?
This is data from the research company PitchBook.
Traders-Paradise introduces some of the top cities for startups that are not capitals.
Okay, we mentioned Tel Aviv with 1,900 startups.
Barcelona in Spain has 474, Munich in Germany 331, the next is Milan in Italy with 238 startups closed deals. These cities are followed by Cambridge, Hamburg, Manchester, Glasgow, Gothenburg, Cardiff, Rotterdam, etc.
In small towns, you can find a wide specter of companies that raising money. For example, Espoo in Finland supported a mobile phone company HMD Global, the MariaDB, a database management company also. Or the other example, Leuven in Belgium, supported Parkwind, a builder of offshore wind farms.
How to find investors for your startup?
You can call the nearest university with an entrepreneurial program. They usually have a powerful web of investors. Just ask them if they want to give you some advice about resources. The other source can be AngelList.
Social networks can be useful sources to locate angel investors. Just look for investors in your niche. We highlight AngelList because it classifies investors by area or business.
However, the best way is to get linked with the other founders in your neighborhood, to say that. Meet other people. Ask for guidance, give information, talk about the difficulties that every entrepreneur meets.
And you will see, the things will roll on. So, when you ask where to look for startup funding, just look around you.