Announcing SuperSeed's second fund, Mads Jensen argues that Europe has the technical talent but too often loses to US rivals on commercialisation, and that operator VCs who help technical founders sell can close that gap.
- Since launching in 2018, SuperSeed had partnered with 15 startups and more than 50 fund investors by February 2022.
- Europe has about 50% more researchers and software developers than the US, yet the US has created more than twice as many unicorns.
- Mads argues European founders often pursue technical perfection while US competitors focus on commercialisation and use traction to raise more capital.
- By one measure fewer than 10% of UK venture capital investors have worked in a startup, which is why SuperSeed sees a need for operator VCs.
- SuperSeed helps technical founders build teams and commercial processes to get from Seed to Series A faster, while the founders stay in charge.
In 2018 Dan Bowyer and I launched SuperSeed with a mission to build a true founder-led venture fund for European B2B startups. Since then, we’ve partnered with 15 amazing startups and more than 50 fund investors who have backed our strategy to fund and support great founders commercialising B2B technology.
Technology, Human Progress and Sales
As passionate technologists, we believe that technological innovation unlocks all human progress. But while “the Tech” is the foundation of progress, no real progress happens until the tech is in the hands of actual users. And to get it there, we need to sell. In other words – nothing happens until someone sells something. Europe has approximately 50% more researchers and software developers than the US, yet
- the US has created more than twice as many unicorns as Europe, and
- only 1 European tech company is in the global top 25 when measured on market cap, and not a single European tech company is in the top 25 when measured on revenue.
One could ask if the domicile of companies matter in a global economy. In 2021, US GDP per capita was $68k, with the EU and the UK both hovering around $47k (IMF figures). And even with globalisation, companies continue to create more / better jobs and to place the lion’s share of their R&D investment (which boosts future growth) in their home geographies. So if we want Europe to benefit from the outstanding R&D done in our part of the world, we need to create more global champions. And this starts with our approach to how we build startups.
Most of today’s big tech companies (such as Apple, Amazon and Google) were once venture-backed startups. And while great founders have built amazing unicorns in Europe over the past decade, almost all of the biggest tech companies are still located in the US.
Accelerate Commercialisation to Create Impact
Because while Europe has excellent technical talent, we Europeans often fall into the trap of pursuing technology perfection while US competitors focus on commercialisation. And so, before we get started selling, a US competitor has delivered real customer traction and used this traction to raise more capital and attain a leading market position.
In other words, too often, great European technology doesn’t create a global impact because it isn’t successfully commercialised.
For Europe to remain relevant, we have to be the best not just in R&D but also in commercialising R&D.
Startups are the engines of R&D commercialisation. And startup founders and their teams are truly the heroes that move the needle of human progress. But it takes a lot of energy to build a startup, and often venture capital is the fuel that accelerates the startup engine and helps founding teams achieve launch velocity to build a viable business.
How Operator VCs Can Help
So our startup engines do need capital, but often this isn’t enough. They also need expertise and best practice. And this is where European venture capital still has room to grow. There are many pitfalls when building a startup. Many first-time founders with a technical background are looking for true partnership from their investors. Ideally, they are looking to partner with investors who have themselves built tech companies and who know from first-hand experience how to avoid the worst bear-traps. However, by some measure, less than 10% of venture capital investors in the UK have even worked in a startup. There is nothing wrong with financial or strategy skills – especially when companies reach the scale-up stage. However, getting a company successfully from Seed to Series A requires a lot of practical skills that are hard to embed in spreadsheets. This is why Europe needs more venture capital investors with operator backgrounds, and indeed why Dan and I decided to launch SuperSeed.
As a VC firm, we work to deliver the best practices on how to build successful B2B startups. We work with technical founders and help them build their teams and craft their commercial processes. This way, we help smart technical founders lay the foundation for successful companies and to get faster from Seed to Series A
This is not about “taking over” from the founders or “steering the car from the back seat”. The founders are absolutely in charge. It is their companies, after all, and we back them to build great businesses. And then we provide capital and expertise on how to get it right so the founders can truly deliver on their vision. We look to be investors and board members who have been in the trenches, know where the pitfalls are, and intimately understand what levers can help accelerate B2B start-ups to become commercially viable businesses.
We are proud to partner with a group of amazing fund investors who are backing us for our second fund. And we are thrilled about the work we are doing in partnership with current and future portfolio companies and founding teams.
Small teams with a clear mission can conquer the world. It’s our job to make sure they have the right capital and right support to succeed.
Here is to the amazing things startups all over the world will build and achieve in 2022 and beyond!
Mads Jensen
Managing Partner, SuperSeed
Frequently Asked Questions
Why does Europe produce fewer tech giants than the US?
Mads Jensen argues it is not a shortage of talent but of commercialisation: European teams often chase technical perfection while US competitors win customers first, then use that traction to raise capital and lead the market.
What is an operator VC and why does it matter?
An operator VC is an investor who has built tech companies themselves. Mads says technical first-time founders benefit from investors who know the pitfalls first-hand, since getting from Seed to Series A needs practical skills that are hard to capture in spreadsheets.
Does SuperSeed take control of the companies it backs?
No. The post says the founders are in charge and SuperSeed provides capital plus expertise on building teams and commercial processes, acting as investors and board members who have been in the trenches.