Europe is perfectly capable of building great technology companies. Below is a graphic from a presentation of mine highlighting successful $1B+ companies built in the US, Europe and China. As you can see, the United States and Europe have been effectively on par with each other since the beginning of the decade.

Now some readers may argue that the graphic may contain a bit of data massaging. Betfair is an unrealized return, although there are rumors it plans to float a $2.5B IPO this year. VistaPrint is a US company but it started in Europe while Robert Keane was studying for his MBA at INSEAD and raised its first round of $8 million from Sofinnova, a French venture capital firm.

A more poignant criticism of the chart is that the $1B line is arbitrary. If you were to consider all the exits from $600M+ in Europe, the balance would tip in the US’s favor (DataDomain, Riverbed, etc are just shy of the $1B mark). Europe doesn’t tend to produce as many of the $600-$1B exits that have become the lifeblood of the US venture industry.

It’s still an impressive bit of data. Europe barely registers as a place to build companies to most people in the technology industry, The data shows otherwise.

If that’s the case, why is the overall European venture investment track record so poor? The data suggests that most European venture firms have a tough time beating the S&P 500. If valuable companies can be built in Europe, why do venture firms struggle so much?

This requires a more careful analysis and will be the subject of another blog post. The short answer is that there is a paucity of investors with sufficient operating experience and know-how about how to build valuable companies. Startups need all kinds of help to sacle, at each stage in their history. Unfortunately, the number of investors who can provide this is pretty minimal in Europe. When you look at the European venture scene, you find a lot of former investment bankers and management consultants, and only a handful of individuals who grok technology, can understand go-to-market challenges, have the ability to help build world-class engineering and commercial teams, and have a wide network across the technology landscape. It also doesn’t help that European investors are more risk-averse than their West Coast colleagues, which is a more pronounced phenomenon of the difference between East and West Coast investors. It also doesn’t help that venture investors in Europe capital-starve their investments, with the data showing that European startups get on average about 1/3rd of the capital that US startups are able to raise. And that’s just the investor side of the equation. There’s also the issue of finding the right technical talent, the challenges of growing a company in the wrong milieu, building the right investor syndicate, being plugged into the right networks, having startups that can quickly iterate and change plans, etc…

On a side note.

When I was last in Silicon Valley, a friend of mine who used to run search for Yahoo! challenged me to name the number of $1B+ companies founded (incorporated) after 2000 from Stanford/HBS who is starting up a new company challenged me to name the number of $1B+ companies founded (incorporated) after 2000. A few names came to mind. The obvious being Facebook but also Silver Spring Networks, which I think will get to a $1B+ outcome. He swatted these all down, saying none of them have had realized exits. The only one in the US he said fit the criteria was YouTube. Scary. If that’s the only one, and we’re in 2009, that’s a pretty ringing indictment of the venture industry’s inability to grow large valuable companies this past decade.

Last night, while having dinner with a colleague at ePlanet Ventures, I realized there is at least one more. Baidu was incorporated January 18, 2000, went public August 5, 2005 and is currently worth $12.81B.

Are there any others I’m missing?

Our initial lineup looks great, with a bunch of colleagues from my Accel days agreeing to drop by campus for an hour, including:

• Robin Klein, probably the most prolific angel investor in Europe right now (bio) on October 1
• Stan Boland, who runs Icera and sold Element14 to Broadcom (bio), on November 5
• Stefan Glänzer, who helped build Last.fm and ricardo.de (bio), on December 3
• Bernard Liautaud, who built Business Objects and is now at Balderton Capital (bio), on February 4
• Jos White, who built MessageLabs (bio), on March 4
• Hermann Hauser, one of the most successful entrepreneurs and investors in Europe and the man behind Acorn, CSR, Entropic, Virata, etc (bio), on May 5
• Mike Hedger, who built and sold KVS to Symantec (bio), on June 3

There are a couple of more big names in the works who also plan to drop by so stay tuned. The full details of the new series is available here: http://london-entrepreneurship.com

Picasso once said “Bad artists copy. Great artists steal.” I hope Stanford doesn’t accuse us of too much intellectual theft. The speaker series is a replica of Stanford’s wonderful Entrepreneurial Thought Leaders seminar – from structure and presentation style down to our intent to put every video online. I see no reason to reinvent the wheel.

Part of my impetus for cloning ETL is that there simply aren’t enough stories of success in the European entrepreneurial community. Unlike the Bay Area where I’m from (although I suppose I’m really a New Yorker), Europe lacks a culture of shared success and failure. The story telling that goes hand in hand with trying to change the world is sorely lacking on this side of the pond. I’m hoping that this series will address part of the gap.

Quick history flashback: I remember when BASES set up ETL with Tom Byers (who’s also a visiting professor at London Business School) back when I was a sophomore. I was too busy building Studio Verso with David Siegel at the time to spend too much time in class, but I recall regularly streaming the series on my PC. The series, along with the Mayfield Fellows program, definitely got Stanford students more plugged in with what was going on in Silicon Valley, if only via a process of osmosis. A lot of credit in setting up ETL goes to the two Toms (the second is Tom Kosnick, who you see in the videos all the time), but also to Erik Straser, who was instrumental in establishing BASES and carrying it for four years. He could do that since he was a PhD student at the time. It served him well, since he got to know everyone in the Bay Area, and he’s now a General Partner at Mohr Davidow Ventures.

I’m hoping our series will give London Business School a chance to do the same thing for the European entrepreneurial community. I’m excited. I’ve wanted to start this for four years now, all the way back to when I first moved to London as a student. I just had my hands full juggling my job at Accel with an MBA class load back then, and then got too busy at Accel to get it going.

I can’t wait for the first Thursday of October. And the best news? I convinced London Business School to commit to opening the series up to everyone. That means you’re all invited.