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Subject: Re: UKNM: Three cheers Amazon UK
From: Tom Loosemore
Date: Fri, 30 Oct 1998 15:53:16 +0000 (GMT)

>This maybe terribly naive, but if somebody in the UK has a good enough
>idea, then what is to stop them going to get capital from the US, where by
>all accounts the streets are paved with it? Why didn't bookpages get over
>there and insist that they could be a european Amazon if properly backed?

Cos distance really does matter to VCs.

West coast high-tech VCs will happily listen to your idea, and nod their
heads accordingly when you hit the right buttons, but the moment you
mention the kind of capital appropriate (at a guess bookpages would've
needed 8 figures to compete with Amazon in Europe) their guts go all
squiffy cos the scale of suggested investment is high *in the UK context*.

Given equivalent business plans, in a SF VC's gut an 8 figure investment
that would be a no-brainer for a start-up in SF is much more scary if the
concern is in London (eg "people just don't invest on that scale over
there" "this would be the biggest injection of VC capital yet for a
european internet compnay" "how do I monitor the performance of management?")

And their guts are probably right - VCs like to be near to their charges
for a reason. One SF VC I met admitted that "travel time from our office"
was an important factor in the yes/no decision.

Have any of the more aggressive US VCs opened satellite offices in London ?
Or I like Sean's NY option - I suspect NY high-tech VC is much more geared
up to investing a a range greater than a 50 mile radius of central san
jose.... did you try west coast VC first sean?

  Re: UKNM: Three cheers Amazon UK, Ian Betteridge

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