Why does Europe not have Startup's - Politics Forum.org | PoFo

Wandering the information superhighway, he came upon the last refuge of civilization, PoFo, the only forum on the internet ...

Political issues and parties in Europe's nation states, the E.U. & Russia.

Moderator: PoFo Europe Mods

Forum rules: No one line posts please. This is an international political discussion forum, so please post in English only.
#15129173
I work in tech, and am aware of startups in the UK (many in Cambridge) and startups in Spain (Madrid/Barca). That said, many of those companies quickly try to develop a significant presence in the US. A big reason is that there are more venture capitalists in the US from which funding can be found. I also think there's a perception that if a startup is worth its salt, it will have at least a US presences somewhere (either Silicon Valley, the North East, or Texas (Austin in particular)). That is to say, there's a culture where a startup isn't taken seriously unless they have offices in one of the major US tech hubs.
#15129184
SaddamHuseinovic wrote:Europe has a competitive industrial sector.


But what is with startup's who become giant's.

Europe is full of Ideas but no investors.


https://sifted.eu/articles/voltstorage- ... S1Ng09T9N4



Socialist hive mind society can never do much..
let me rephrase... how can startups happen when your taxes are over 50%?
How can you run a company when there are regulations up the ass?
Why would you waste your time dealing with people who do not even want to have kids?
Meaning they only care about today, not the future. If you want to do something you need to come to America.
At least for now.
#15129221
Europe has a lot of start-ups, but when you want to succeed you need to go to New York to get financing. A German biotech company developing one of the more promising Covid-19 vaccines recently went to the New York stock exchange instead of to the Frankfurt stock exchange because it can raise more money in NY. The company isn't a start-up, but it illustrates the problem of raising money without resorting to US markets.

And if a European start-up is successful, it'll be bought up by one of the US giants like Google or Amazon who have very deep pockets.

It's through its financial networks that the US controls its empire.

The only way Europe can protect its economic interests from political blackmail and the predatory practices of US monopoly capitalism is by establishing the Euro as an international currency on a par with the dollar. The increasing US debt is already starting to drive investors from the US to Europe.
#15129229
SaddamHuseinovic wrote:Europe has a competitive industrial sector.


But what is with startup's who become giant's.

Europe is full of Ideas but no investors.


https://sifted.eu/articles/voltstorage- ... S1Ng09T9N4


Estonia has plenty and you probably use some of them: Skype, Transferwise even Utorrent to some degree. Although you are correct to some degree that the amount of our startups is smaller compared to US. US simply has a better university culture in this regard compared to Europe. We will catch up eventually.
#15129237
SaddamHuseinovic wrote:Europe has a competitive industrial sector.


But what is with startup's who become giant's.

Europe is full of Ideas but no investors.


https://sifted.eu/articles/voltstorage- ... S1Ng09T9N4

Europe is not a place to do business. There are number of reasons why it is not wise to establish a business there.

Starting a business is difficult. They have so many bureaucratic procedures. It takes a lot of time and money to complete procedures. Maintaining a business is even harder. European Union have so many laws and regulations tell how you do business and how you cannot do. They make you pay fines if you don't obey to Brussels's regulations.

Europe is an aging continent. Consumer demand is decreasing. It is possible that you can't find customers who interested in your products. The continent is not business friendly in terms of political culture, laws and demographics.
#15130042
I don't think demographics is really an issue here - it doesn't play in favor but it is marginal.

Political culture indeed doesn't favor start-ups. it's more in favor of supporting established business rather than fostering new ones, despite incubators this and that...

European Union laws and regulations... are not the problem - despite you can see them as a problem they are part of the solution. The problem
are national laws and regulations, and the fact that they variate country by country. EU laws are regulations are there meant to favor business.

The situation isn't that bad by itself, but in the US is just better.

Money: Every investor knows those things, and therefore prefers to invest in the US. And thus you have EU companies moving to US to get money, or because advised by their investors to do so in order to be more successful.
#15130161
Milton Friedman explained it perfectly. Watch this please, @Varilion .



Varilion wrote:European Union laws and regulations... are not the problem - despite you can see them as a problem they are part of the solution.

Please explain this one. How is the EU helping businesses?
#15130164
I was about to say, I would be really surprised if there is no startups in Europe. I am sure their are plenty of Europeans with the same entrepreneurial spirit as business minded Americans. Entrepreneurship is everywhere I am sure you travel in the world.
#15130165
@JohnRawls

JohnRawls wrote:Estonia has plenty and you probably use some of them: Skype, Transferwise even Utorrent to some degree. Although you are correct to some degree that the amount of our startups is smaller compared to US. US simply has a better university culture in this regard compared to Europe. We will catch up eventually.


I wasn't even sure if Europe was behind. If they are, I wouldn't be surprised if they catch up to us eventually. Yes, I use some of the Estonian products you mention (Skype). Very good products too! I was aware that Skype was made by Estonian tech minds.
#15130190
Politics_Observer wrote:@JohnRawls



I wasn't even sure if Europe was behind. If they are, I wouldn't be surprised if they catch up to us eventually. Yes, I use some of the Estonian products you mention (Skype). Very good products too! I was aware that Skype was made by Estonian tech minds.


I am pretty sure that per capita amount of our startups is less. The main reasons for this, at least in my opinion, are:
1) We don't have the same structure in universities. For example Stanford and MIT are pretty start up friendly nowadays through different practices. Especially Stanford. This can't be said about all universities in the US but in Europe there are less similar kind of start up obsessed universities.
2) European corporate giants are used to consuming over companies. US companies do that also but i have read a study that European companies tend to create large monolithic companies faster and consume smaller competitors fasters to do it. Hence they kill or obsorb start ups under their names.
#15130192
JohnRawls wrote:1) We don't have the same structure in universities. For example Stanford and MIT are pretty start up friendly nowadays through different practices. Especially Stanford. This can't be said about all universities in the US but in Europe there are less similar kind of start up obsessed universities.


Is there a concept of University lead technology incubators? Basically the university invests in startups, and even goes as far as to give them free office space, and access to processors and researchers. Most medium to large Universities in the US do this. Including my alma mater.
#15130205
Rancid wrote:Is there a concept of University lead technology incubators? Basically the university invests in startups, and even goes as far as to give them free office space, and access to processors and researchers. Most medium to large Universities in the US do this. Including my alma mater.


To a lesser degree than in the US and I think that is the main problem.
#15130209
It's more to do with nepotism that favours heavy regulation, plus you get taxed out the ass. Sure you can hide your financials in a haven like Ireland, but then good luck with acquiring funds and moving onto the prototyping stage so you're forced to take your idea to one of the investor heavy tech hubs in the US or to Shenzhen.
#15130424
SaddamHuseinovic wrote:Europe is full of Ideas but no investors.

So the real question is why there are no investors, which might be because European financiers (bankers mostly) are more conservative and risk-avoiding. As Rancid has already pointed it out we'd need more venture capitalists, or financial venturism if it sounds better.
#15131199
https://www.cnbc.com/2020/10/29/germany ... alley.html

Germany is revamping their stock option rules to help spur startups in Germany. Maybe Spain can do the same so I can get a job there.

That said, stock options are bullshit. Tech companies in the US typically do not give out options (because they can have 0 value), they usually give out RSUs (which will have at least some value), which is way better. People wised up to the bum deal that options are back in the 90s.

Another emerging trend in the US start up scene in particular is that rather than giving out RSUs, they instead just give VERY large salaries compared to the more stable established companies. Like 50%-100% more pay than an established tech company. You get money upfront, but with no additional upside if the company starts to boom.
#15132487
Since the US dominates the world's finances, it is obvious that the world's money will be drawn into the US. It is a function of US imperialism. For example, a European investor investing in a European company may do so via the NY Stock Exchange. For Europe to be able to compete on an equal footing, the Euro has to become an international currency on a par with the dollar.

I guess the following is related to this thread.

New policies to help startups flooding in across Europe

European policymakers are putting in place a series of new laws and initiatives to help the continent rival Silicon Valley, hoping to promote more investment in European tech startups and also attract talent to the sector.

German finance minister Olaf Scholz over the weekend announced plans to make it easier for companies to give employees stock options, which is a way for small companies with little cash to make big hires.

“A flourishing startup scene is important for our country, it strengthens the innovative capacity of the economy,” he said, adding the law should be agreed next month. “That’s why I am introducing new rules. Young companies should be able to really get started, even in difficult times.”

The news was first flagged at the ‘Not Optional’ event organised by VC firm Index Ventures and startup conference Slush last week, with Jörg Kukies from the German finance ministry saying they would help to “incentivise startup investment in our country”.

This comes amid a sustained campaign by Index and other entrepreneurs to make it easier to give employees options — seen as a way of aligning incentives between employees and their company. France changed its options rules earlier this year.

New startup-friendly policies galore
But this is not the only new policy likely to come into action soon. At the same ‘Not Optional’ event, Gerard de Graaf, a director at the European Commission, said that a new ‘Startup Nations Standard’ should be created during the Portuguese Presidency of the European Council starting in January.

This ‘Startup Nations Standard’, he said, will call for commitments from member states to implement a set of best practices — such as on options or visas. “If you fulfill all of the standards — there will probably be about 10 of them — then you can call yourself a Startup Nation,” said de Graaf.

At the event, Stéphane Ouaki from the European Commission also laid out expectations that the European Commission will invest €3.5-4bn into startups between 2021 and 2027. It will also shift from primarily supporting VC funds towards directly investing in startups.

This money will be invested through the European Innovation Council (EIC) equity fund, which was formally launched back in June with a pilot programme of several hundred million but is expected to get a much larger budget under the Horizon Europe framework (which is being finalised at the moment).

The EIC has been dubbed Europe’s “unicorn factory”.

Problems to solve
The broader context of the three announcements is that although the European tech and startup ecosystem is growing, most policymakers agree that it needs to accelerate faster to become a truly global force.

According to a report from Dealroom, the combined value of European startups has risen from €155bn to €618bn over the past five years. There are now 2m people employed in tech startups, up 43% compared to 2016. 38% of global seed-stage capital is raised by European startups.

These are the positive points.

On the negative side, while European tech startups attracted $34bn in investment last year, this record number was still well below the $117bn in the US and $63bn in Asia. At the same time, much of the money that was invested came from foreign investors, not European ones.

In Europe, there is still a much-discussed problem of a lack of scaleup capital in Europe able to take companies from the early stages right the way through to IPO. This is seen as one part of the reason why Europe has been poor compared to the US at creating global champions.

A recent McKinsey report says that while Europe accounted for 36% of all global startups launched between 2009-19 it had only built 14% of the world’s unicorns in 2019. “Historically, Europe’s ecosystem has been less effective than that of the US at turning startups into late-stage successes,” the report concluded.

At the Not Optional event, Johannes Reck, cofounder and CEO of Get Your Guide, said that European startup were “losing out” because large pensions funds and insurance companies were unwilling and often unable to allocate capital to VC funds, meaning few funds has the firepower to take a company all the way to IPO.

Last week, Get Your Guide raised a €114m round in the form of a convertible note from mostly non-European firms such as Searchlight Capital, SoftBank Vision Fund, KKR, and Spark Capital.

Cedric O
Also speaking at the Not Optional event was Cedric O, France’s junior minister for the digital economy, who dropped a devastating fact: the last IPO of a tech company at a €1bn+ valuation in France was in 1996 when Dassault Systemes listed.

But he said that France — like the rest of Europe — was stepping on the accelerator. He said that since the election of President Macron, France has implemented tax and labour reforms and a new tech visa to support startups and attract talent.

He said France was looking to create the next tech giant. “Building choices takes time, that’s why we need to invest now: France is pushing hard on investment in AI, quantum and cybersecurity.”

He added: “Europe has an economic opportunity, as the US economy isn’t as good as it used to be, and the European model is attractive. Therefore, we need to create the right environment and framework to nurture our startups.”

I am proud of myself too. :up: Me too. Low Ris[…]

@Drlee Precisely. He literally did all of t[…]

Election 2020

https://thefederalist.com/2020/11/23/5-more-ways-[…]

The state cannot enforce any of these rules. One[…]