REPORT 2024

Foreword

Welcome to a very different report experience. Drawing from our past 300+ podcast episodes, combined with the most recent market information and Isomer Capital’s vaulted data treasures, we aim to reveal the effects of the tech reset on the European fundraising market. We also explore how top venture capitalists throughout Europe have adapted their strategies, tactics, and operational guides in response.

Packed with informative graphs, captivating stories, and video interviews, this report offers a completely new and immersive experience. It’s designed for an engaging learning journey that you’ll not only browse through but actually spend real time with.

To set the tone, we’ve collected the core outtakes from our virtual launch event as the preamble for the report.

Hit play and enjoy the journey through the report.

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Authors’ note

There’s nothing like riding a bull. But neither is there anything quite like being thrown off it. Something many VCs (venture capitalists) would soon come to learn for the first time. Coming off an unprecedented bull-run extended artificially by covid stimulus and the ensuing zero interest environment, it seemed like early stage startup investors truly had grown wings and taken flight. Founders and operators became angel investors and angel investors became VCs. VCs became growth investors and going full circle, growth investors became VCs. There was enough money to go round and everything was up and to the right. Even to the extent that some started arguing that there was little to no derisking happening from round to round as follow-ons were inevitable.

But nothing lasts forever and surely not a good bull run.

Many newcomers to the industry would soon learn that venture isn’t just about memes, parties and mark-ups. And some firms that had ventured up or down market in pursuit of AUM (assets under management) or alpha would soon fall back to their core strategies.

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Many pages have been written about what caused the tech reset and how it affected startups and companies. Less has been written about how it affected VCs on the fundraising trail and LPs (limited partners) seeking to allocate in a market of tumult. Through and post the tech reset, we’ve interviewed 300+ VCs on the eu.vc podcast and screened thousands of funds as part of our investing activities. In this report, we uncover some of our core learnings from the period, focusing on those that pertain to raising venture funds in the current market.

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I was in Bulgaria with my family, on the beach sunbathing. And I was approached by someone who wanted to invest in my fund. Not once, but twice, completely independently of each other! It was crazy.

We hope you’ll enjoy reading it, watching the interviews and joining in the ensuing discussion online. But more than anything, we hope it’ll help you on your road to raising your next fund. The European venture ecosystem is only getting started, we’ve got so much more to come.

Keep hustling, keep pushing frontiers. Keep going.

Andreas Munk Holm
EUVC

David Cruz e Silva
EUVC

Freddie Macpherson
Isomer Capital

About our partners Floww

Floww has built financial infrastructure to serve and empower scaling companies, funds, innovation centres and financial institutions. Its technology-driven solutions with the appropriate regulatory rails are reshaping the private markets landscape.

For the VC user, Floww offers multiple solutions all on one platform so that managing inbound activity, deal process, portfolio and fund monitoring are more streamlined. In addition, Floww’s fund administration – from investment management agreement creation to custody services, regulatory reporting, LP communication, and payment processing. They streamline the entire administrative workflow, offering one comprehensive solution.

A pivotal feature is the introduction of Floww Certificates, globally tradable instruments designed to enhance liquidity and facilitate secondary market transactions. This unlocks opportunities for the development of new fund structures, creating a more attractive asset class with flexible lock-up periods.

Together with strategic partner LSEG, Floww is committed to catalysing transformative change within the industry.

Venture is desperate to modernise. Fund structures have barely changed in half a century and the private markets need quicker turnover to increase investment, so investors aren’t locked in for long periods. If you solve that equation, you benefit everyone – the VCs, the investors, the innovators that are ready to grow. I do believe we’re at a critical point right now, a point where the technology is there to remove the hurdles that funds typically face in execution and deployment, and to create the liquidity the private markets need to encourage huge swathes of investment.