Palo Alto, California venture capitalist Crescendo Ventures has opened its first European office in London, claiming that Europe is ripe for business. The US company, which currently has funds of $500m under management, said it will concentrate strictly on opto-electronics, wireless technology and business-to-business e-commerce ventures.
General partner in the London office, Roeland Boonstoppel said there is now little to distinguish the value of investment opportunities in Europe and the US, and there is no shortage of suitable opportunities on the continent. Today, he said, where companies such as Cisco or Nortel are looking at a trade sale of a wireless or opto-electronics developer there is no reason why they shouldn’t make the acquisition in Scandinavia, and at the same kind of multiples that they would pay in the US.
Before making the decision to come to London in September, the company had already made investments in three European companies, including The industree, an Eindhoven, Netherlands developer of cable network head-ends, and Netcentrex, a Paris, France developer of IP management systems. The company is also a backer of Algety Telecom, the French optical transmission company which competes with Qtera, a US company that Nortel yesterday paid $3.25bn to acquire.
Boonstoppel said Crescendo’s presence in Europe is also expected to give the company an edge in the increasingly competitive US venture market, where the ability to help a local start-up to spread its wings overseas is becoming an important differentiator. However, with Sweden and Finland now representing a hot-bed of wireless technology development, and the Dutch, French, German and UK economies producing increasingly entrepreneurial high-tech innovators, Boonstoppel said there are also real local reasons for being in Europe.
Today, he believes, the only real obstacle to Europe realizing the same levels of VC funding as the US remains the local tax regimes. Unlike in the US, where earnings on share options are taxed at their original value, in Europe innovators blessed with share options are taxed at eventual sale value. European governments still don’t get it, that just doesn’t work for entrepreneurs, Boonstoppel said.
