In June 2017, Mind the Bridge, an entrepreneurial education program, in partnership with Wilson Sonsini Goodrich & Rosati, a U.S. law firm focused on innovation and tech, released a report on European “dual companies” [EDCs] and their migration to the US in search of funding. These dual companies have their headquarters abroad with a strong operations base in their country of origin, and the report defines them as, fast-growing, high-tech companies that have raised at least $1M since 2010. The report focuses on “scaleups” (rather than startups) which are, “real companies producing revenue and employment.” Of the 4,200 scaleups in Europe, 570 are dual companies, raising “approximately 30% more capital” than their domestic counterparts by obtaining funding and gaining traction in a foreign market—predominantly the US.
The US is the destination of choice for EDCs, with 40% choosing Silicon Valley and 22% migrating to New York City. Of EDCs from Germany and France, for instance, 33% of EDCs move to Silicon Valley, with 22% choosing to set up in New York City. Other frequently chosen cities include Boston, Austin, Dallas, and Los Angeles. The report goes on to say that the data shows that the most successful scaleups in Europe follow this dual model.
As well as quantitative data, the report uses first-hand information from EDCs about their motivations to migrate. Availability of funding was found to be the overall motivator, followed by market size, access to early customers, proximity to strategic partners, IPO opportunities, as well as the culture and unique characteristics of the ecosystems in Silicon Valley and NYC. The founders complained of a “fragmented” European market, characterized by differing languages, cultures, markets, currencies, and regulations.
This report illustrates that while the US as a whole may be going through a period of uncertainty for businesses and growth, the two global hubs for innovation—Silicon Valley and NYC—are growing in attractiveness for European scaleups. Read more here.
Download the full report here