January 19th, 2010 — Mark Littlewood
One of Europe’s original Transatlantic venture funds, Atlas Venture, is consolidating in Boston. The redoubtable Fred Destin will relocate where he will focus on levering his European experience by building US companies. Christopher Spray, Managing Partner of the European operation will remain in London to manage the European portfolio. Graham O’Keeffe and Regina Hodits will transition to Venture Partner roles.
We wish everyone the very best and I have no doubt that some of the key actors in the Atlas team will go on to greater things. Atlas Venture have been active investors in Europe for many years making some notable investments in pre-dot com days and many entrepreneurs have benefited from their money over this time.
Whatever the positive spin that might be put onto this, this is sad news for the European venture ecosystem. It is much harder to deals at arm’s length with investments and will almost certainly mean that less money is invested in European entrepreneurs.
The move is not really a surprise however. The team in Europe has (allegedly) struggled to raise a new fund and positive exits have been hard to come by – most recently Koodos was bought by before Christmas for pennies in the pound by e-Trader Group.
Ironically, it has proven hard for almost all venture firms to build scalable businesses. This news confirms that venture capital, for all its focus on entrepreneurs with global visions and relentlessly scalable value propositions, remains what is essentially a cottage industry. Accel have managed to operate successfully on a semi-global basis (US, China, Europe) but almost all others have failed to do so in a single firm. (Benchmark opened a European office for example which now operates independently as Balderton Capital in Europe).
Is venture capital by its very nature an unscalable proposition?