Part 3: The Innovation Risk Paradox – What US VCs Back That EU VCs Often Won’t
In our conversations with venture investors, a striking pattern emerged around risk and innovation. U.S. venture capitalists, especially in Silicon Valley, often embrace a “go big or go home” philosophy – they’ll back audacious, outlier ideas with massive payoff potential (and massive risk). This trend has grown even more, with VCs now shying away from unicorns (1B+) ideas and looking for 10B+ potential. European investors, historically, have been more conservative, preferring proven models or incremental innovation. This innovation risk paradox means a startup deemed “too risky” in Europe might find enthusiasm in California, and vice versa. After taking a look at the network effect of Silicon Valley, and the capital gap existing between Europe and the U.S. in previous parts of our series, in this third part, we explore these cultural and strategic differences, illustrating what kinds of bets U.S. VCs are willing to make that many European VCs shy away from.
