Slush 2021

I spent Wednesday and Thursday at Slush 2021 which is Europe’s premier startup and VC event. I had a good time and learned a lot. Despite the gap closing, there is definitely a wide difference between the US and European markets and that was something I was paying close attention to.

The biggest difference I saw was that everything was largely VC driven and Europe seems to be much more VC friendly. In the current US market, VCs seem to almost be the ones doing the pitching trying to get allocations in hot startups. It has become undoubtedly a founder friendly market. In Europe, I still saw that VCs control most of the power still. I spoke to a few European VCs that said 2x liquidation preferences are still somewhat common. Founders are actively seeking out VCs, not the other way around. It’ll be interesting to see if this turns around at all in the future.

One other big difference in the markets is equity compensation just isn’t a big deal in Europe. Unlike in the US where companies are minting thousands of millionaires at every exit, Europe is still far behind in equity. Klarna celebrated making 75 employees millionaires at a $40b+ market cap. That number in the US is often in the thousands.

Most people we spoke to just aren’t that interested in their equity. They have some stock but none of them are overly excited about it even for those at unicorns. I believe that a lot of this is cultural and pay related. Europeans do not get paid as much as in the US, and that means much lower equity. In addition, owning a piece of a company is not something that is commonplace in Europe. I spoke to a CFO of a Series A startup and they had just started thinking about giving employees equity. A company without an equity plan would be at a serious disadvantage here in the US.

Lastly, it was hard not to notice how much smaller the European market is compared to the US. Compared to Money2020 which was solely a fintech conference, Slush 2021 which was for all European startups was much smaller. Yes, COVID has something to do with that, but I think that’s just the reality. The startup and VC market is just much smaller overall across the EU than it is in the US. Finland is rightfully proud of their 4-5 unicorns that have made it over the years. Today, there’s nearly a unicorn a day being minted in the US.

None of this is a knock on the EU startup scene as it’s still growing widely. There’s some amazing founders, operators and investors in Europe and it was good to see the thriving market. While they may be a bit behind the US in a few areas, I expect Europe to quickly start closing that gap over the next few years. It’ll be fun to watch and I look forward to comparing notes from Slush 2021 to Slush 2022.