From The Economist Entrepreneurship Special Report

In the March 14 2009 Economist Special Report on Entrepreneurship, one choice snippet to cut out (emphasis added by yours truly):

The European venture-capital industry, too, is less developed than the American one (significantly, in many countries it is called "risk" capital rather than "venture" capital). In 2005, for example, European venture capitalists invested EUR12.7 billion in Europe whereas American venture capitalists invested EUR17.4 billion in America. America has at least 50 times as many "angel" investors as Europe, thanks to the taxman's greater forbearance.

Yet for all its structural and cultural problems, Europe has started to change, not least because America's venture capitalists have recently started to export their model. In the 1990s Silicon Valley's moneybags believed that they should invest "no further than 20 miles from their offices", but lately the Valley's finest have been establishing offices in Asia and Europe. This is partly because they recognise [sic.] that technological breakthroughs are being made in many more places, but partly also because they believe that applying American methods to new economies can start a torrent of entrepreneurial creativity.

I've been writing about this exact same thing, and I think it's becoming clear to the general VC community: investing money wisely leads to cultural changes that allows you more opportunities for investing in the future. Much as a Valley GP may invest in an untried entrepreneur, expecting that while this one may not pop the next one will, one can view an entire market the same way.

Otherwise excellent special report. You should read it; it will make you smarter.