Some thoughts on the European Venture scene Saul Klein [email_address] Web2Expo – Berlin October 22, 2008

The weather looks pretty terrible right now

No wonder Jason was getting depressed

The Valley is seriously downbeat

Though Dave McClure did shout out a “get over it”

Fact is start ups are really tough

You have no customers

No money

You and your team are fighting an imaginary war

Armed just with some big ideas

But hey, we’ve fallen from greater heights

Founded IPO VC Some of the greats started in depressions

Founded IPO VC >> ? Many major winners started during and after the last bubble

Now the Internet is nearly 6x the size of 2001 Hosts

How we spend our time online has shifted radically

This shift will have big, long term repercussions 13 5 Mins/Visitor 583 125 Pages/Visitor 296 bn bn Page Views 141 bn 159 bn Minutes Social 14 Big 3

bn

We’re living in a new technical world order

Firefox has 42% market share!!!

We now have substantial shared “public” resources

New platforms are changing infrastructure and distribution costs

Free resources exist to support and educate start-ups 8 hubs 80+ cities

Boulder Leeds Utrecht Helsinki Hamburg Paris Belgrade

We will almost certainly face severe and sustained recessions - 61% YTD - 63% YTD - 49% YTD - 40% YTD - 62% YTD - 56% YTD

But where the Internet is used has changed dramatically – its not just the US anymore

There is still a lot of capital to invest in Europe

Capital will look to back people who understand the new reality

Angels will retreat

Raise enough capital. Stay Strong. Get Paying Customers. Cut costs. Get to break even Bootstrap Like Crazy. Focus. Don’t panic. Make products people want.

Whatever works for you use it. Good luck

Appendix Some interesting data….

Latest figures show European investment is going up

Europe already had three $ bn investment hubs

Why break-even and capital are important