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Author: Pierre (34) a Swedish Software Developer
Venture Capital has long been instrumental to the Silicon Valley tech industry. Venture Capital is the process of investors putting a fairly large amount of money in exchange for equity in a promising startup company, and it is responsible for the success of multiple startups globally.
In 1998, Google got its financial start through a $100,000 investment that was quickly followed by another $1 million, an additional $25 million the following year, and another $10 million the next. These cash injections allowed them to quickly scale up their operations and laid the foundation for achieving the dominance they have in several markets today. (Cruchbase – Google #)
Although large, Google’s funding is almost nothing compared to the amount of capital Facebook managed to raise a decade later: rounds of multiple hundreds of millions of dollars worth of capital and later moving into the billions before going public in 2012. (“Crunchbase – Facebook”)
Meanwhile, if you were a European entrepreneur in most of Europe during these times, you would have to go to a bank to talk about getting investment capital. After giving an attractive pitch, the bank would ask: “Do you own a house that you wish to use as security? No? Then what are you planning to spend the money on? Engineering hours? We can’t seize that if you fail to pay back the loan!”
With that, the European entrepreneur’s ambitions would be crushed, and they would be forced to seek employment with a large industrial company instead or maybe emigrate to the US where they could find actual funding.
Europe’s investment model might have worked well when the capital was used to acquire real es
