Getting a job offer from Americans vs from Europeans - signs of hyper growth.

What do you do when you are one of the better American companies and want to grow quickly in Europe?

You simply hire top people from Europe to do it for you. Makes sense, right?

How do you make sure of that? You make an offer that cannot be refused.

The offer is based on an analysis of the opportunity ahead and the compounded growth the prospective employee would contribute to in 3-5 years. The analysis also includes a look at the market and job competition.

And if Americans really want to get that person, they would make an offer at 1.5-2X+ above the market rate, compounded with performance-based incentives, usually a cut of the future value created.

That last part is very important. Americans will want to make sure you say yes because that is the best offer you can get. The offer is about the employee first and getting them committed.

Europeans usually hiring other Europeans look at the local market and if they really want you badly they will offer 1.1-1.2X. They will probably tell you about the number of the holiday days and that you get free coffee at the office, usually with not too much sharing of the future value created.

The last part is not that important. Europeans will want to make sure they are not out of the market and this is the best offer they can make. The offer is about them first.

It is also true that the risk is also correlated - the better the offer, the higher the risk.

European employees usually think in terms of job security whereas American employees think in terms of maximising the money they can make in a year. That is why you hear frequently about stories of American companies letting people go on the spot when they do not perform or when the shit hits the fan.

One final point - this reasoning applies much better to hyper growth situations, when it is extremely important to have strong functional leaders steering the ship and executing against a sizeable opportunity that needs to be won over.

Anyways.

Anecdotes and generalisations aside - after Sequoia recruited Luciana Lixandru from Accel last year, Lighspeed hired Paul Murphy from Northzone.

American VCs really want to do business in Europe - we’ve got a hyper growth situation here, don’t we?

Who is Lightspeed Venture Partners:

Lightspeed is one of the four American investment giants, sitting next to Tiger, NEA and A16Z.

It was founded in 2000 and had 2020 LP commitments announced at $4bn across three funds, covering all stages, geographies and verticals.

In Europe, they have had a partner active in London since 2019 - Lithuanian Rytis Vitkauskas - backed by two other US-based partners - Brad Twohig and Nicole Quinn.

This is the Lightspeed excerpt from a report about the American investors from Europe.

1 Comment

Nikolas Noetzel 13:06 on 17 Mar 2021

Hi Dragos, being both a US and a European citizen currently in the ardeous process of opportunity selection, I feel that you are penning it spot on. I've spent time arguing offers with several European ventures in the last weeks and have eventually turned them all down, deciding to focus more on US firms with potential future ties to Europe looking forward.

I'm currently writing a report for a US-German think tank on US investment in European tech - happy to share it, maybe I could leverage some of the data from Point9 for it!

I really like what you're building there, a good addition to Pitchbook, dealroom & co.

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