U.S. Venture Capital in Europe in the 1980s and the 1990s

Abstract

Unlike its U.S. counterpart which grew steadily after the Second World War, the development of the European venture capital industry was hampered at first by a series of cultural and political barriers. In the 1980s and then again in the 1990s structural changes occurred that made the European environment far more appealing and receptive to venture capital. These changes both stimulated the local industry and caught the attention of VCs in the U.S. Both periods were marked by significant flows of capital from the U.S. to Europe. However, in terms of scale, driving force, and execution there are stark contrasts between them.