There have been some that claim the venture capital model is broken. That startups no longer need to raise money from professional investors. That lower startup costs allow entrepreneurs to do it on their own. Of course, that's true in some cases. But, in others, it's not.

As proof, consider the situation in Spain, where there is no such thing as early-stage venture capital investment. The BSCH Internet Fund that invested in startups in 2000 has disappeared. Now, there are private equity firms such as Mercapital and 3i Group, but no true venture capitalists. It shows. Starting a business is tough and achieving international growth is nearly impossible.

This week, a new fund plans to announce its first high-tech venture capital investment. Teresa Azcona, CEO of Going Investment Gestion SA, said her firm would invest €300,000 into Light Simulation Lab SA, a software company that was spun out from Zaragoza University earlier this year. After managing €4 million for high-net-worth individuals since 2000, Zaragoza-based Going had a preliminary close in January on €12 million for its early fund and €25 million for its later-stage fund. The fund, which will focus on the surrounding Aragon region, is still open but will have a final closing in October.

Hopefully, others will follow. —Joshua Jaffe from Innovate! Europe '05

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