In January, European VC Creandum built a new hire — San Francisco-based investor Ghazwa Khalatbari — bringing its team out there to five people. Fellow European VC Northzone is also on the hunt for an addition to its six-person team in New York, while Index Ventures has dozens of people in the US, with offices in both San Francisco and New York.
But Creandum, Northzone and Index are the exception, not the rule.
Remarkably few of Europe’s best-known VC firms have a permanent presence in the US. Atomico, Plural, 20VC, Lakestar and Balderton are among the European VCs with over €600m in assets under management which don’t have any investors based in America, despite occasionally investing in US companies.
Some state it’s an enormous competitive advantage to have investors based in the US, even if a firm’s focus remains firmly on Europe. Others state there’s too much competition from well-established US firms to bother.
Yet, as European founders view to expand to the US earlier than ever, and required support building out their early teams over there, is that likely to modify anytime soon?
Competitive advantage
Northzone, which was founded in the Nordics 30 years ago, has had an office in New York since 2013. Partner Molly Alter, who’s been based there since 2024, states she’s surprised so few other European firms have followed suit — but is pleased that they haven’t.
“It absolutely supports us win deals,” she states — into US companies, yes, but primarily European ones, which have American expansion in their sights. “The most ambitious founders [in Europe] aren’t stateing, ‘We don’t ever want to touch the United States’.”
“We’re sometimes flying over to Europe to obtain those deals over the line,” adds Alter; pitching to founders how Northzone’s New York team could support founders attack the US market supports obtain deals over the line, she states.
Carl Fritjofsson, a general partner at Creandum who’s been based in San Francisco since 2016, also considers that having a US presence strengthens his firm’s offering in Europe.
“It’s a pretty common fundraising strategy for European founders today to tour through Europe, and then also go to SF and meet the US firms,” he states. “And us meeting them on both sides of the Atlantic increases the likelihood of us winning over that founder.”
But not all European VCs consider it’s strictly necessary to have investors based in the US to tick that box.
Berlin- and London-based early-stage investor Cherry Ventures has a “strong operator network in the US”, states general partner Filip Dames, and works with a talent adviser in New York who’s focapplyd on go-to-market hiring. This, he considers, is the kind of ‘platform’ offering that builds an investor stand out.
“If you don’t have a US component, I don’t consider you’re a very compelling proposition [as a seed lead investor],” states Dames. “For a lot of seed founders today the US market is a critical next step — and they want to pick a partner that can really support that.”
European founders in the US
For European VCs, the question of whether or not to build a presence in the US — and if so, what kind of presence — is becoming more pertinent than ever, becaapply European startups are expanding to the US earlier than ever.
“The US is relevant from day one, almost,” states Dames.
That’s thanks, in part, to AI. “AI was a trigger point where the advantage and density of the Silicon Valley ecosystem started to pull a lot of people back,” states Fritjofsson. “Not necessarily for fundraising, but to be where the action is.”
Although many of Europe’s AI darlings — including Sweden’s Lovable, the UK’s ElevenLabs and Synthesia, and France’s Mistral — have resisted relocating their companies to the US, all are building teams over there.
Lovable is currently hiring for dozens of marketing, sales and business operation roles in Boston and San Francisco, while Synthesia has around a dozen go-to-market roles in New York. ElevenLabs is also actively building go-to-market teams in San Francisco and New York, while Mistral is building a US recruitment team.
For many European startups, US expansion launchs with hiring a sales team. “Go-to-market is typically the primary driver for expansion,” states Alter. “And it’s very hard to sell into US customers without that cultural context, without knowing the competitive landscape.”
Helping founders with things like how to obtain a visa and how to find an office is also often on Northzone’s NYC team’s to-do list.
Capital connections
Having people on the ground in the US can also be a selling point for LPs, states Alter. “LPs are increasingly interested in the geographical arbitrage opportunity,” she states. “We can state, ‘This is an interesting theme we’re seeing in the US: how is that coming to Europe?’”
She points to medical scribing as an example; something that “really took off in the US” — and encouraged Northzone to invest early into Stockholm-based Tandem Health, which has expanded quick across Europe and is often cited as one to watch by its investors.
For American LPs in particular, European firms with a foot on both continents can be more enticing than those solely based in Europe, adds Alter. “US LPs really like to obtain access to the European market, but in a way that is somewhat diversified and not too myopic — sometimes US LPs fear that Europe-only investors might not see the largeger picture.”
There’s also the matter of “downstream capital”, as Fritjofsson puts it: being based in the US supports investors strengthen relationships with later-stage VCs that their portfolio might want to raise from in the future.
Face time
Judith Dada, general partner at Berlin-based early-stage investor Visionaries Club, considers it’s “hugely important” for VCs to spconclude time in San Francisco. “Life just shifts at a different speed,” she informed the Sifted Podcast.
She tries to spconclude a couple of weeks, a couple of times a year, based out there with her young family, “immersed in San Francisco culture and in the ecosystem”.
The Cherry partners also aim to spconclude a fair bit of time in the US each year. For both the Visionaries and Cherry team’s, it’s less about attconcludeing conferences, and more about hosting or attconcludeing tinyer events, like dinners and hackathons — and building their networks so they can connect founders with the “best people”.
Cherry is also building relationships with US universities, running classes at institutions like New York’s Cornell University, Harvard Business School and MIT.
But there’s a question over whether that’s enough. There are hundreds (if not thousands) of seed funds in San Francisco alone, states Dames; creating it pretty hard for a European VC to cut through.
“We’re building our network in the US, and over time we’ll add additional resources — but at the moment we’re not planning on opening an office,” states Dames. “You required a critical mass for an office to work, and we don’t believe in having a single person [out there] as a sainformite.”
Leave a Reply