[vc_row][vc_column][vc_column_text]As Silicon Valley chills, Europe’s tech gets hotter - managed solution

As Silicon Valley chills, Europe’s tech gets hotter

By Mattias Ljungman as written on techcrunch.com
We are accustomed to hearing that European tech is perpetually in Silicon Valley’s shadow. Now there have been suggestions that the local tech scene is starting to feel Silicon Valley’s valuation woes.
If true, this should raise alarm bells, because if European technology startups struggle to raise money from wary investors, it could hit the brakes on Europe’s budding digital economy just as the EU begins ramping up its tech industry, preparing for a digital single market.
However, the data paints a more nuanced picture, one showing that, in the main, Europe is not as susceptible to the impact from a U.S. tech downturn, because it has now laid the foundations — talent, mentors, angel investors, local VCs, incubators, accelerators and communities — that are propelling Europe on its own, separate investment cycle.
The data about Series A funds raised, capital invested and $100+ million exits, gathered from Dow Jones VentureSource, CB Insights and S&P Capital IQ, shows that in relative terms, Europe is now starting to fire on all cylinders, much like Silicon Valley did in 2013.
Silicon Valley is indeed undergoing a chill, while tech in Europe is growing, purposefully, confidently and across a broad front of geographical hubs and industries. Currently, France is leading Europe in investments so far this year.
CB Insights shows that the absolute number of funding rounds for early-stage companies — what’s called Series A rounds — in the U.S. appear to have peaked in 2014 (2015 was down from 2014 by -4 percent).
We have the opportunity to both learn from the successes in the U.S. and pre-empt some of their issues.
Series A rounds are important because they are one of the best indicators of the health of an ecosystem in producing a solid pipeline of companies that have gained sufficient traction to raise an institutional round from venture capitalists.
In Europe, Series A investments only really started to ramp from 2014, and the number of local companies hitting this funding milestone continues to rise. 2015 was a record year for Europe — up 12 percent from the year before. In January and February so far this year, A rounds are up 38 percent year-over-year (versus 19 percent up in the U.S.).
Generally speaking, venture investing in tech companies in the U.S. has been volatile, with a large uptick in funds raised by venture capitalists since 2012, and big spikes in 2014 and 2015, according to Dow Jones VentureSource.
In Europe, we’ve yet to see any big jumps or dips in VC funding.
According to CB Insights, $100+ million exits — when startups are acquired by larger firms or IPO — started to ramp in the U.S. from 2011 onwards, reaching an eight-year high of 122 exits in 2014, but then declining again in 2015 to 83.
In Europe, the ramp in $100+ million exits only really kicked in from 2014 (18 exits), and reached a new high of 26 exits in 2015.
None of this is to say that the gung-ho spirit of Silicon Valley has dampened and that Europe has magically thrown off its yoke of conservatism. U.S. startups are still raising money, although, for some, the valuations are coming down to what some might say is a more realistic level.
European institutional investors — with some exceptions such as in the Nordics — could still step up their activity in late-stage funding, and a handful of activist EU data protection authorities are erecting barriers to the global free-flow of data. Investment pace in the Nordics is currently four times faster than just two years ago.
But tellingly, this year (so far), several fast-growing private tech firms in the U.S. have seen their valuations plummet. You can’t really argue with the numbers: For Silicon Valley, the hangover from heyday valuations has started. CB Insights has even created a Downround Tracker on companies that have raised money or exited at valuations lower than their earlier investment rounds. For now, it’s mostly populated by companies from the U.S. (83 percent of all companies on the list). This could, of course, spread to Europe, but so far the data does not show this to be the case.
Listed companies haven’t fared much better. The aggregate market cap of the 34 public Internet Software & Services companies that have IPO’d in the U.S. since January 1, 2013 was trading at 42 percent below their aggregate first-day market cap on March 16 this year, according to S&P Capital IQ. Here too, Europe has not seen the same impact. The 25 public Internet stocks that have listed in Europe in that same time period have been much more resilient, and are trading 9 percent above their initial first-day aggregate market cap.
Given all of the above, it seems that a more informed way to think about whether or not Europe will be caught in Silicon Valley’s downturn is to understand that the Valley has been on fire since 2008, and Europe has only really got going in the last three years.
So does Europe’s trajectory mean that we’re heading for the same kind of correction just a few years down the line? Not necessarily. Due to the relative scarcity of capital in Europe when compared with the glut in the Valley, Europe’s tech industry has also had less hype — and hopefully the conditions for more sustainable, long-term successes.
We have the opportunity to both learn from the successes in the U.S. and pre-empt some of their issues. That’s a great position to be in.



Technology is changing how we retire

By Tucker Smith as written on techcrunch.com
From baby boomers to Generation X to millennials, it seems that each generation faces a new set of problems that they believe to be tougher to solve than those faced by the former generation. Baby boomers grew up during the height of the Cold War, Gen Xers took the brunt of the recession and millennials are burdened with more student debt than ever before.
Retirement is a hotbed issue that elicits different reactions depending on the age of the individual in question, but proves to be a problem that affects all three generations. Varying degrees of access, familiarity and trust in technology and differing definitions of a successful retirement are at the root of each demographic’s approach to the subject.
What’s interesting is that some traditional forms of investing, such as real estate and stock trading, are thought of differently by each demographic, while other traditional mediums, such as the 401k, are utilized in relatively the same manner.

401ks by generation

But more on that later. First, let’s break down how each generation handles retirement planning.

Baby Boomers (the Social Security generation)

Born between 1946 and 1964, the baby boom generation was raised in a conflicted and industrialized world that witnessed the Korean War, Vietnam and the creation of the United States as an industrial superpower. They were among the first to be born into an America that had a plan for their retirement: Social Security.
Passed in 1935, the Social Security Act was intended to provide the elderly with the means to exit the workforce at age 65. Baby boomers were raised to have full confidence in the program, which explains why one-third of their population today plans on using Social Security as their primary source of retirement income.
Millennials are the generation that everyone seems to have an opinion about.
In theory, the concept is simple: Those who are able to work will give a portion of their wages to those who are no longer able to work, which by today’s numbers amounts to 2.8 workers for every Social Security beneficiary. The average beneficiary can expect $1,229.85 each month from Social Security, making that the primary source of income for 24.31 million baby boomers in retirement.
This cold, hard fact has caused almost two-thirds of baby boomers to plan on retiring after the age of 65, with more than half of them classifying a reduced work schedule and retirement as the same.
Though they grew up hearing the benefits that came with Social Security, baby boomers are quickly realizing that it is not enough to retire on, and they are scrambling like crazy to make ends meet.

Generation X (the 401k generation)

Born between 1965 and 1978, Gen Xers are products of the early-stage technology boom. Witnessing the rise of the Internet in adulthood, they are familiar with technology but face trust issues with it from time to time. They are also the first generation to question the capabilities of Social Security, and saw their employers adapt the 401k on a wide scale as they began entering the workforce in the mid to late 1980s, making them the “401k generation.”
Gen Xers pioneered the idea of structured, personal retirement planning by integrating the 401k into the core of their retirement plans. Compared to the other two generations, Gen Xers are more likely to opt into a 401k, if offered, and are more likely to use professional financial planners than baby boomers. Around 83 percent of Gen Xers do not believe that Social Security will be there for them at their desired retirement age, which will be after the age of 65 according to 54 percent of them. Their lack of confidence in Social Security has caused most of them to believe they will need to work part-time into “retirement” strictly for financial reasons.
Though they came of age in a digital world, Gen Xers are less likely to trust financial technology, fintech, which is why we see a denser consolidation of retirement funds in their 401k accounts compared to their millennial successors. Gen Xers show an important progression in retirement planning by taking the baby boomer approach a step further with a more hands-on, personal approach.


Millennials (the innovation generation)

Born between 1979 and 1996, millennials are the generation that everyone seems to have an opinion about, but there seems to be a general consensus that they are in one way or another disruptive. Essentially born with technology in hand and little, if any, memory of a world without the Internet, millennials stereotypically tend to more quickly accept change and are open to challenging traditional ways of thinking and living. Consequently, this coexistence with technology comes with an inherent need for instant gratification and access to information.
Contrary to what the 401k graphs mentioned above might have alluded to, surveys have shown that millennials are actually more conscious and proactive about retirement than the two previous generations. On average, they began saving for retirement 13 years before the baby boomers and five years before Gen Xers.
However, the results of this trend are not reflected in the most obvious of ways. A little bit of math reveals that millennials actually contribute less to 401ks each year than the baby boomers ($2,357.14) and Gen Xers ($1,372.55) at an average of only $864.86. But that doesn’t mean that they are saving less. In fact, studies have shown quite the opposite.
The story behind millennials’ smaller 401k contributions is actually that they have progressed Gen Xer’s retirement approach a step further by being more open to adapting new tech-savvy platforms and services that enable them to diversify their investment funds. Innovations in fintech and real estate have allowed millennials to capitalize on their adaptive nature and enter positions that were previously unavailable to the twenty-somethings of past generations.

Gen Xers are less likely to trust financial technology

Robo investment services like Wealthfront and Betterment have given them the confidence to begin stock trading earlier than previous generations, which had to learn the ins and outs of the industry in order to be effective with their money. We can see this boosted confidence again with increased adaptation of services like Acorns, which make saving and investing automated, and Robinhood, which makes stock-trading decisions free and mistakes less significant.
The investment platforms mentioned above have all made stock trading accessible to a wider range of people through different approaches, but have uniformly shifted the millennial generation’s perception of the industry.
Baby boomers, Gen Xers and millennials all perceive real estate differently, as well. Growing up in an America with new suburbs popping up every month, baby boomers view properties as nest eggs that people plan on living in for years. To them, owning a home was an accomplishment that checked off a box on their adulthood to-do list, or, in other words, it was expected.
In general, Gen Xers originally viewed finding a place to live similarly to baby boomers, but when the housing bubble burst in 2007, and a lot of them lost the homes in which they were supposed to raise their new families, their views changed. Since the burst, the United States has become a nation of renters, with recovering Gen Xers and non-stationary millennials leading the trend. In turn, landlords have seen great profits due to landmark increases in rent rates, making buy and hold rental properties a “must have” in one’s retirement portfolio.

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