EUVC
VC | E464 | 🏆 Exit of The Year Finalist: Fergal Mullen of Highland Europe on Sensible Growth, Hard Truths & Building Europe’s Next Giants
May 10, 2025
Fergal Mullen, Founding Partner at Highland Europe, discusses the intricacies of growth-stage investing in European tech. He emphasizes the importance of sensible growth over blitzscaling and highlights Highland's equal partnership model as vital for trust and collaboration with founders. The conversation dives into the nuances of U.S. expansion and managing capital efficiency amidst evolving market dynamics. Mullen also touches on the significance of founder dynamics, coachability, and the concept of 'tourist investing' in venture capital cycles.
44:06
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Quick takeaways
- Highland Europe's investment strategy prioritizes sustainable, capital-efficient growth over massive funding rounds, challenging traditional venture capital norms.
- The firm emphasizes the importance of coachable founders and strong investor-founder relationships to drive adaptability and long-term success in startups.
Deep dives
Capital Efficiency as a Growth Strategy
Adopting a philosophy of capital efficiency, Fergal emphasizes that companies can achieve sustainable growth without heavily relying on outside funding. Instead of seeking massive funding rounds, successful European tech firms focus on sensible growth strategies that prioritize unit economics and operational efficiency. For example, Highland Europe looks for startups with revenues around 10 million euros and high growth rates, aiming for sustainable profitability rather than rapid cash burn. This approach challenges the conventional wisdom prevalent in venture capital circles, especially in the US, where funding often dictates valuation rather than long-term value creation.
