01 Dec 2015
Filling a portfolio, by way of Paris and Pragueby Jason FeiferTopics:
Neil Rimer (MBA 1991) could have been a San Francisco venture capitalist. He worked there once; it would have been easy enough to open his own shop and join the horde converging on the town's buzziest tech companies. But instead, he went to Europe, where the VC scene was just starting—and where the challenge was amplified—cofounding Index Ventures in 1996. "If we were going to compete with the best portfolios that were built in Silicon Valley," says Rimer, "we'd have to hunt far and wide across Europe." It's become a popular bet: VC funding in Europe is booming, climbing from $6.3 billion in 2010 to $9.2 billion in 2014, according to Dow Jones VentureSource. In the second quarter of this year, European venture capital firms raised a combined $2.25 billion, 63 percent more than over the same period last year. But that doesn't mean his job is any easier.
Here are three ways that Rimer, who is speaking at TechCrunch Disrupt London this month, has thrived as a European VC:
Go where the companies aren't
Rimer started Index Ventures in Geneva, a small city with few startups. His logic: That would force his partners to scour all of Europe. "We knew [great investments] weren't going to be in our backyard," he says. "We deliberately didn't want to go to London, even though it was a bigger city with a big financial center, because we thought there was a risk of just sitting back and waiting for companies to file through. We want to find them before they find us."
Don't pigeonhole cities
American startups are often geographically sorted by sector. Tech is in San Francisco, public policy is in DC, medical is in Orlando. And for a time, Europe was like that too, Rimer says: Israeli startups focused on security and infrastructure, Helsinki's were in gaming, London's were in financial services. "But over time, those differences are going away," he says. "I wouldn't want to typecast any of them, because entrepreneurs move around very fluidly. You can do anything anywhere." If Rimer went to Germany looking only for the next SoundCloud, the music platform with a reported $700 million valuation, he might have missed his investment in auxmoney, an online marketplace for peer-to-peer loans.
Get comfortable on planes
Rimer still lives in Geneva but is in London a few days a week. He is in Berlin regularly and in California quarterly, and routinely takes day trips to Amsterdam, Barcelona, and Paris, among other cities. He expects the same travel logs from his partners. "There are thriving communities in each of these cities, and so we are members of those communities," he says. That means speaking the local language, being there for important dinners and events, and building the relationships that lead to investments. Because without that, a European VC is just collecting frequent-flier miles.
Class of MBA 1991, Section I