Not all bad news for European venture capital

Despite gloomy conditions, the European venture capital market is reportedly doing better than many expected

With European markets engulfed in a debt crisis that has seen many lenders reluctant to give money to risky businesses, many observers have assumed that one of the last places to get value is in the continent’s venture capital sector.

Not so, says the UK’s industry body the British Private Equity & Venture Capital Association (BVCA). The group says that the chances of European VC firms achieving an IPO exit is broadly the same as their US counterparts, and that many in the industry have been misled by policy makers and institutional investors.

The BVCA has been conducting a study into the market alongside Dow Jones, and has concluded that the industry is in “much ruder health” than expected. Richard Anton, the BVCA’s chairman, said: “Attitudes have unfairly hampered European high-growth companies which in turn poses a serious threat to the future of both entrepreneurship and the economy across the continent.

“This report explodes some of these myths and is an extremely welcome and robust contribution to the debate over the financing of European start-ups. The sooner we can dispel the myths that unnecessarily hinder venture capital; the sooner venture capital can help power the next generation of world-beating companies.”