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March 10 2004
Europe is under threat as never before. It is not "Le Defi
Americain" written about by Jean Jacques Schrieber in 1968, but
globalisation which is forcing the average European employer and worker to
compete with their counterparts on the other side of the planet. Regulating
labour laws is a stop-gap measure.
What needs to happen to revitalise the European economy is that the average
European needs to want to contribute to its growth story; if we focus on
being net contributors to the system, rather than net-takers from it, we
will see the difference.
Ariadne Capital believes that venture capital can be a force for growth. The
best investors know how to align objectives of all of the parties who can
have an impact in creating or destroying value.
Twenty five separate regulatory, tax, language and business environments
slow the scaling of start-ups in Europe, where failure is too frequently
viewed as a terminal condition, rather than a vital part of becoming a
well-rounded manager. In general, many founders of businesses in Europeare
conditioned to believe that they don t have the skills to become world-class
CEOs. Too few Chief Information Officers in corporates are willing to give
young private companies a chance; it requires on their part a significant
ability to manage risk. Overall, there is far too much focus on the capital
rather than the markets and the talent which animates it. Rather than be
considered a matter of luck, deal structuring should be a process of
determining fair rewards to all stakeholders in high-growth ventures.
"Aspiring entrepreneurs should play to win. Too frequently young
professionals in Europeare conditioned to believe it s better to play not to
lose," said Julie Meyer, Ariadne Capital s CEO.
"While the European Commission's stated agenda is to make Europe the most
competitive economy by 2010, regulatory obstacles, ostracization of failure,
arcane bankruptcy rules, inflexible labour laws, and an aversion to
marketing and selling threaten to make Europe the opposite of it," said
Bundeep Singh Rangar, COO of Ariadne Capital. "If Europe doesn't
commercialise innovation like the U.S., or manufacture as efficiently as
Asia, it will be stuffed at both ends."
The US economy - where venture investment is already climbing again - has
reaped huge rewards from a virtuous circle, where new venture capital funds
created by technology entrepreneurs as well as from financial institutions
are reinvested in new technology with the active involvement of those
entrepreneurs.
This has underpinned successive waves of innovation that have propelled the
UShigh tech economy to its global leadership position.
Nick Ogden, an Ariadne Capital Investor, who founded the internet payment
system WorldPay and the soon to be launched On-Instant network, says, "Like
myself, it s often entrepreneurs with technical backgrounds that come up
with the original idea for a new company. It's vital that these individuals
are helped subsequently in three vital areas - selection of the right people
to grow their company, forming the best partnerships and closing the right
early sales to ensure that growth is sustainable."
Rangar concludes, "Venture capital's natural habitat is innovative sectors
which are by nature risky and idiosyncratic. High levels of both financial
and entrepreneurial skill must be combined to really make the money invested
work to its fullest potential to build new economies, create employment and
systematically engineer profitable, successful exits for those shouldering
the most risk - a brand new generation of European entrepreneurs."
About Ariadne Capital
Ariadne Capital invests in early stage private companies and advises later
stage private and public companies undergoing significant growth or change.
Founded by 24 top European entrepreneurs, with 12 nationalities on the team,
offices in both London and San Francisco opening later this year and deals
completed on three continents, it offers global reach to its portfolio
companies which include: NanoMuscle, Navio, and Intamac.
www.ariadnecapital.com
CONTACT: Casey Balkham / Lena Ahmed, Brodeur Worldwide
Tel: +44 (0)20 7298 7043/7097
e-mail: cbalkham@uk.brodeur.com
e-mail: lahmed@uk.brodeur.com
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