Europeans who have returned

The take-away

  • A number of European innovators have returned from Silicon Valley to apply their knowledge and experience back home.
  • But Europe doesn’t have to copy the American model to fulfil its potential.

While the dynamic US tech scene remains the epitome of innovation for many ambitious entrepreneurs, some Europeans are choosing to leave it behind.

High-profile returnees include Florian Jourda, the main architect behind content platform Box; Fred Destin, an influential venture investor and start-up mentor; and Lars Fjeldsoe-Nielsen, ex-head of Dropbox, Uber and Whatsapp. And they are just the tip of the iceberg. Roxanne Varza, director of the world’s largest start-up campus, the newly-opened Station F in Paris, says Europe is starting to tempt back its digital diaspora. “It feels like the beginning of a wave of people coming back from Silicon Valley”, she says. “Rising prices and the current geopolitical situation mean that it is no longer the ideal place to be.”

Cheap but good engineers

Varza, herself originally from San Francisco, argues that Europe now puts up a convincing argument for founders mulling over a return. First, Silicon Valley’s high costs are becoming prohibitive.

“A software engineer’s starting salary in the Valley is like $200,000, whereas in France it’s somewhere between $40,000 and $50,000.” The rise in European investment volumes is also compelling. Varza reports that French start-ups raised €350 million in November 2016, three and a half times the monthly average. Despite uncertainty caused by the Brexit vote, €12 billion was invested in European start-ups in 2016, seemingly small change compared to €58.6 billion in the US, but comparable to 2015’s EU investments, unlike the US’s 20% decline.

“I think overall, the entrepreneur culture is about to take off in Europe”, she says. “It’s becoming so trendy now. People who want to work in start-ups realise they can actually live that entrepreneurial life in Europe, which wasn’t necessarily the case before.”

Stefano Bernardi made a name for himself in the Valley as co-founder of cash flow start-up Kickpay and later the Mission and Market angel fund. But in 2016 he returned to Italy with his wife, Elena Petrucciano, who is also a serial founder and business developer. Many reasons were behind the move, most relating to family, quality of life and the cost of living in San Francisco, especially for anyone planning a “nonemployee-for-life life”. But he says the opportunity to apply everything they had learned from years in the tech forges of San Francisco to new endeavours in Europe also inspired them to return.

Bernardi, who is looking to launch a new venture in 2017, cut his teeth with San Francisco gambling start-up Betable, getting a valuable overview of early stage growth and the chance to dabble in all areas of the company as it jumped from two to 35 employees. “Going through the seed accelerator Y Combinator and founding my own company were pretty great experiences. Then I tried to learn as much as possible and get a wider view by investing in more than 45 companies over there.”

Now that he’s back, he sees issues around European start-up capital “being solved fast” and contends that the main thing Europe is missing is trickle-down talent in sales and marketing. “Unfortunately, there haven’t been companies like Google, where talent can be trained and then deployed in early stage start-ups, but that’s hopefully going to happen soon.”

Stay here and expand

Ivo Spigel, co-founder of, spent five years interviewing founders for his book The European Startup Revolution and sees that “the gap is closing” between Europe and the Valley. “It’s not necessary to go to the US to succeed. You can build a successful global start-up from Europe while staying here and your start-up can have a substantial US presence, such as Soundcloud, or maybe have different strategies of international expansion.”

Bernardi agrees, noting that Europe has talent and diverse, distributed excellence centres aplenty, enough to compete with its American rivals and attract talent on its own terms. “I think Europe has an enormous potential in terms of innovation, as long as it doesn’t try to copy the Silicon Valley model and instead finds its own way.”

The advantages of American cash

Access to venture capital is becoming easier – but it’s not one-size-fits-all.

The increase of US investment in European start-ups, alongside growing local capital, is welcomed by Northzone, a European venture capital fund that has raised more than €1 billion. Stockholm-based partner Jessica Nilsson argues that this opens the door for EU companies both to scale faster and to access the US – benefitting local tech hubs in terms of talent and knowledge sharing without necessarily losing companies to an American acquisition. Says Nilsson: “We think there is benefit to even closer cooperation, which is why we opened our New York office, to help connect the ecosystems and our portfolio companies on both sides of the pond.”

Venture capital is commonly used to rapidly scale start-ups, often in the form of multi-million euro investments in return for shares. While European venture investment is on the rise and the European

Union hopes to create a €1.6 billion fund, venture funding is not always suitable. Carlos Espinal, a partner with EU start-up accelerator Seedcamp, argues that the need for such funding in Europe’s fragmented market depends on start-ups having global ambitions. “In a small country like Portugal”, he says, “you could very well just scale it for the Portuguese market with angel funding, whereas you’re going to have to work on a global strategy from day one if you want to scale the company to the point where it justifies a venture capitalist coming in”.

For start-ups with international aspirations, VCs offer the hard cash, growth expertise and networks needed to scale. American firms in particular offer Europeans “very compelling” funding options. “The US has some of the largest funds and the most capital”, says Espinal, “but also a lot of experience from having helped companies like Google, Dropbox and others to scale”.

Despite the increased availability of venture funding, Nilsson believes that successfully scaling European start-ups comes down to making sure they’re ready for the leap. “Investors need to believe that the start-up has a strong chance in generating large returns for the fund”, she says, “which means they’ll need to see a large addressable market and a strong team to take it on”.