It's been a good decade for venture capital. Globally, more than $1.5 trillion was invested in venture capital deals, worldwide between 2010 and 2019.
And, the European venture capital (VC) market, closed the decade on a high note. In the last five years, capital invested in Europe increased by 124%, and since 2018, this number has grown over 39%, according to Dealroom. During the first nine months of 2019, European tech companies raised an average of around $3.3B per month.
The growth of the European VC market signals a new era for Europe's startups as they expand to other geographies and take funding from investors around Europe.
In 2019, Withers tech partnered with three other tech-focused VC specialist law practices — Schnittker Möllmann Partners (SMP) in Germany, Viguié Schmidt & Associés in France, and Wenger & Vieli in Switzerland — to analyse active Series A deal terms used in each jurisdiction and benchmark how venture capital deals are structured across Europe. We decided to undertake this review due to the growing volume of cross-border tech VC deals within Europe.
In addition, given the large volume of overseas capital looking to invest in European tech start-ups, we also felt it would be helpful to explain the nuances of these four key jurisdictions to help overseas investors better understand the risks in each jurisdiction.
This resulted in the European Venture Deal Terms Survey which identified 53 separate terms, condensed into 14 key deal terms covering the categories of economic, control, and reps, warranties and remedies.
The survey found that there was close alignment in deal structures between the jurisdictions, and in my opinion, the most significant message this survey sends is that we all speak largely the same language when it comes to transactions and legal documentation, so investors should have confidence in deploying capital across borders, particularly in these tech-savvy jurisdictions.
This is an essential review of how VC tech investors are carrying out deals across the UK and Europe right now; and, that we all speak primarily the same language when it comes to transactions and legal documentation. The insight from this survey means investors should have confidence in deploying capital across borders, particularly in these tech-savvy jurisdictions.
This is an essential review of how VC tech investors are carrying out deals across the UK and Europe right now.
A copy of the report, including discussion of the 14 key deal terms found across all four jurisdictions, can be found here and here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
