In Germany there are 4 (four) VC companies with considerable funds within the range of EUR 100 million or above. Taking into account that Germany is one of the biggest economies worldwide this fact is a shortcoming, to say the least.
Why is that?
One possible answer you'll find watching this talk with Marc Andreessen. Marc describes the "American Way of funding a Start-up" as "fund it, scale it, and then look for a business model". Now - call a German VC, show him your powerpoint and explain the Andreessen strategy to him. Or quote Facebook's Peter Thiel by saying: "We're also focused on getting the product right," says Thiel. "Getting ads right—that's not the top user demand." Unless you aren't Marc or Peter himself or you have sold a company successfully before - the VC will throw you out.
In other words: invent the next facebook or twitter (don't take this literally - I mean the next big thing) and no single German VC will fund you - promised. Maybe it's unfair to limit this to German VCs - the reason for Loic LeMeur with Seesmic to move from Paris to San Francisco or Jajah to move from Austria to Silicon Valley were the same - they felt having scalable businesses - but they lacked a business model at that period. This did not prevent US-VCs from funding.
Haven't European VCs read Talib's Black Swan? Do they think inside the box - are they trapped in induction? Is there a lack of vision? Or is it - plainly spoken - too risky to invest into a facebook or twitter in its first months?
