European VC investment strategies – and web2.0 plans

25th of January 2007 by admin

Barry Maloney, Partner at top VC firm Benchmark [ex-digifone], Irish man, was quoted in a recent FT report on European investment in “web2.0″ space.[original research was from Paul Fisher at First Capital]

Quote: [fixed the bad spelling of Maloney]

Barry Maloney, partner at Benchmark Capital Europe, said recent transactions, such as the sale of Youtube to Google for $1.65bn and the sale of MySpace to News Corp for $580m, have fuelled interest in websites focused on user-generated content, also known as “web 2.0” companies.

These companies are also much cheaper to set up than other technology businesses.

“It is very difficult to build up a semiconductor company or an enterprise software business. You need to invest $40m to $50m before you know if you have a product that works,” Mr Maloney said. “With web 2.0 companies you can find out after three or four million dollars whether it will work.”

As a result, Mr Maloney said, many European venture capital companies were using a “spray and pray” strategy, spreading small amounts of investment over dozens of companies in the hopes that two or three would make it. “

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