Index’s Neil Rimer has out some interesting ideas on venture investing in Europe. I was particularly struck by this:
Help to de-risk the riskiest endeavor of their lives.
Being an entrepreneur in Europe is a huge deal. Unlike in Silicon Valley, where being an entrepreneur is lauded, being an entrepreneur in Europe is viewed as a big risk – especially if you fail. It’s harder to re-integrate after a business fails, so learn how to structure a deal with that in mind. You have to learn how to “de-risk” an endeavor that is likely to be the riskiest deal in someone’s life. Entrepreneurs in Europe who don’t have that confidence, may not take the risk, so you have to occasionally structure a deal to encourage them.
Seek out the entrepreneurs who are going for the biggest possible play. European entrepreneurs are far less likely to go for a doubling down. For instance with Skype, we had to create a safe environment for entrepreneurs who were concerned about entering the U.S. borders.
I don’t disagree, and it’s a point that should be made more often: You can de-risk entrepreneurship somewhat without killing people’s motivation. There is a deep-seated hostility in the venture community to doing anything remotely entrepreneur-friendly in a financing — What is they lose the hunger! — and I think it’s dangerous, short-sighted, and just plain wrong in many circumstances.
An aside: What the hell does Neil mean by saying Index helped “create a safe environment” for Skype entrepreneurs who couldn’t enter the U.S.? I knew Niklas had post-Kazaa issues with the U.S. law, so did Rimer et al., sneak Niklas in under a pseudonym? Hide the Swede in a steamer trunk? Inquiring minds want to know.