Harry Stebbings Highlights Stark Speed Disparity Between US and European Venture Capital Funding

London, England – Prominent venture capitalist and 20VC founder Harry Stebbings has ignited a debate within the global startup ecosystem, publicly criticizing the perceived sluggishness of European venture capital firms compared to their American counterparts. In a recent tweet, Stebbings, known for his influential podcast "The Twenty Minute VC" and his firm managing over $650 million in assets, drew a sharp contrast in funding timelines.

"European venture capital is too slow. In the last week; two founders I work with closed rounds in SF & LA within 72 hours from first meeting. In the same time European VCs were organising which partner would take the call… Time to up the ante Euro VC."

Stebbings' comments underscore a long-standing perception of differing operational speeds between the two regions. While some reports indicate European venture capital has, at times, yielded higher returns over longer periods due to a more cautious and quality-focused approach, the pace of deal-making remains a critical point of distinction. Data from Sifted reveals that US firms typically invest at a faster rate, adding an average of 5.6 companies to their portfolios annually, compared to 3.6 for European VCs.

The ability of US venture capital firms to close deals rapidly, sometimes within 72 hours as highlighted by Stebbings, is attributed to several factors. These include a larger pool of capital, a more aggressive "move fast and break things" ethos, and often less bureaucratic investment committee processes. Some US firms explicitly state their capacity for quick decisions, with one firm noting they can get back to founders with a decision within 72 hours of the first conversation. This agility allows US VCs to capitalize on high-potential opportunities swiftly.

Conversely, European venture capital has historically been characterized by smaller average fund sizes and a more conservative approach to valuations and risk. This often leads to more extended due diligence periods and a greater emphasis on consensus-building among partners before committing to an investment. This structural difference can result in European founders experiencing smaller funding rounds and potentially greater equity dilution as they navigate multiple, slower fundraising stages.

Despite a significant increase in European VC investment over the past decade, with some narrowing of the funding gap, the cultural and structural differences persist. Stebbings, who actively invests in both European and North American startups, has previously voiced his ambition to "rewire European venture capital" to foster a more dynamic and competitive environment. His recent tweet serves as a direct call to action for European VCs to accelerate their processes and embrace the speed often seen in Silicon Valley and other major US tech hubs.