10 ms·

Unicorn from Europe (Copenhagen, Denmark). Oh wait, they moved to San Francisco. It looks like there is a lot of talent and founders around the world, but stil

Unicorn from Europe (Copenhagen, Denmark). Oh wait, they moved to San Francisco. It looks like there is a lot of talent and founders around the world, but still there is not enough VC and ecosystem to support them outside of Bay Area.

cloudjacker 10y ago
It is because Bay Area valuations are indefensible by most US standards and any European accounting standard
- nojvek 10y ago
  Or may be outside of Bay Area, not many are willing to put money where the mouth is
- adwf 10y ago
  Yeah, they'd laugh at you in London for asking for this kind of valuation unfortunately. (Except for the usual caveat of knowing the right people, etc.)
- fundameen 10y ago
  It's got nothing to do with 'accounting' at all, it's a matter of potential. Lots of smug fools laughed at $15 billion valuation for Facebook. A few years later and it's generating more than that in annual revenue. It seems that many people still find it difficult to comprehend what 1+ billion internet/computer users means for technology companies that are capable of scaling.
  - autotune 10y ago
    How many startups fail every year again? Well let's find out: https://www.quora.com/What-percentage-of-startups-fail?srid=FEsz&share=0df0ea6f https://www.quora.com/What-percentage-of-startups-fail?srid=... Technology solves problems, but it doesn't mean every "problem" is actually a problem, or that it's worth solving. There will always be outliers.
    - argonaut 10y ago
      Yes, and? It's exactly that kind of focus - focusing on the average outcome rather than the power law outlier outcomes that return your entire fund - that characterize the people who laughed at FB's valuation, as opposed to the VCs who invested in FB.
      - autotune 10y ago
        I agree that risk is certainly required if you want to make a return on your investments, however, all I'm saying is that for every Facebook, there are hundreds more that don't make it where money gets wasted. If I were an investor I'd want to make sure there was a tangible product doing something innovative out there, rather than just a new way to collect and sell user data. I'm not a VC nor do I really inderstand the mindset though, so if investing in miracles is your thing and has worked for you then more power to you.
        argonaut 10y ago
        Yes. Investing in miracles is what VCs do. Investing in 50 companies and only having 5 of them succeed is what they do. Investing in 50 companies and expecting 45 of them to succeed is called being a small business bank.
  - cloudjacker 10y ago
    No, it really does have to do with accounting There are many VC backed companies that never state their valuation. There are many VC backed companies that do state their valuation after every funding round and buy up all the press releases [on techcrunch, exhibit a] so everybody knows. So their secretaries, banking partners, trophy wives, and sycophants fawn over them more. All of those companies have completely different 409a valuations, which are MUCH lower, because you can't just say "well 10% was sold for this much, so therefore 100% is this much". Nobody ever posts those. The FASB accounting standards are also much more intelligent. These valuations are literally only for impressionable people that don't want an intelligent valuation.
    - goseeastarwar 10y ago
      409A is lower because preferred shares have more rights over common shares. Employees want that number to be lower, to enjoy greater gains and lower exercise costs. In any case, as a company approaches an IPO event, the spread between common and preferred disappears. None of this is particularly controversial. Here's actual data for those curious: https://www.theinformation.com/comparing-common-stock-valuations-in-private-tech https://www.theinformation.com/comparing-common-stock-valuat...
      - cloudjacker 10y ago
        Not controversial, just useless compared to other valuations methods that have utility
  - fitchjo 10y ago
    Just want to point out that in many industries a revenue multiple of less than 1.0 is expected [1], such that generating greater than $15 billion in revenue does not automatically result in a company worth $15 billion. That being said, FB's net assets are $50 billion (and it's market cap is much, much (holy cow it's alot) higher), so clearly those that got in at a $15 billion valuation are very happy right now. [1] http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/psdata.html http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/...
    - arcticfox 10y ago
      Software, for good reason, is not one of those industries (like aerospace, home furniture, etc.). Incremental capital cost in software per user is vanishingly small compared to building planes or sofas.
  - SilasX 10y ago
    Market valuations are not the same as accounting valuations; American companies also have to use the "sane, conservative" figure in the appropriate contexts.
  - forgetsusername 10y ago
    >Lots of smug fools laughed at $15 billion valuation for Facebook For every Facebook there are at least 10 Pets.coms or, worse yet, Enrons. I'm not sure how pointing out a single success justifies all valuations.
PhilipA 10y ago
Lots of lost jobs in Denmark - a shame that so many European jobs are lost due to bad options of funding in EU.
- jakozaur 10y ago
  Just be fair they still employ a lot of ppl in Denmark (164 according to LinkedIn), but majority is in USA (323). I thing this number may be skewed a bit, LinkedIn is more popular in USA than in Europe.
  - PhilipA 10y ago
    The issue is that you know in what place they are going to grow in the future - it ain't going to be in Denmark.
  - _delirium 10y ago
    They're quite different jobs also. Core Unity engine development and most of the tech jobs are in Copenhagen, while the SF office is mostly sales/marketing/accounting. It was kind of a half-move where they moved the "business office" to SF but didn't move the technical team. That happened years ago, initially mostly because of sales: having an "SF" company and a sales team based in SF made it easier to get in contact with the large customers who produced most of their licensing revenue (at least at the time).
- adrenalinelol 10y ago
  Can't this claim be applied to any globalization labor issue? Part of the EU is open borders, why stop with the EU member-state borders?
  - wolfgke 10y ago
    > Part of the EU is open borders, why stop with the EU member-state borders? Because of the language borders usually correspond to the national borders of the EU member states. And if not language borders then completely different systems of taxation, employment rights etc.
laut 10y ago
In general people in Denmark don't have a ton of money to invest after paying taxes. If they do invest in Danish companies, those companies are held back somewhat by rules and further taxes. Some years ago there was a "entrepreneur tax" in Denmark which was an extra tax that affected business angels. Employees could also be required to pay taxes on employee stocks - money that they had not earned yet because they had not sold them. http://www.business.dk/navne/ivaerksaetterskat-skal-ses-efter-i-soemmene http://www.business.dk/navne/ivaerksaetterskat-skal-ses-efte... http://penge.dk/pension-skat/ejere-af-medarbejderaktier-risikerer-skattesmaek http://penge.dk/pension-skat/ejere-af-medarbejderaktier-risi...
- pavlov 10y ago
  Employees could also be required to pay taxes on employee stocks - money that they had not earned yet because they had not sold them. That is a major problem in the US system as well.
  - BinaryIdiot 10y ago
    It is? I'm pretty ignorant with stocks so please excuse the stupid questions but I thought you weren't taxed until after selling them. Is that not the case? How does it work?
    - deleted 10y ago
      [deleted]
    - bwood 10y ago
      You also get taxed when exercising options even if you don't immediately sell the shares you just bought. Something like the difference between the strike price and the current value being treated as income you earn upon exercising the options, so it's taxable.
    - pavlov 10y ago
      The taxation structures around stock options in the United States appear extremely complex. Google for something like "taxation of stock options in private company"... I'm certainly not an expert, so don't listen to me for any financial or legal advice.
hiou 10y ago
"It" not "they". This is like saying Google moved to Ireland.
- davidw 10y ago
  Not necessarily: http://ell.stackexchange.com/a/71088 http://ell.stackexchange.com/a/71088
  - deleted 10y ago
    [deleted]
zacharyz 10y ago
For what its worth, Unity is a pretty global company. They have marketing based in SF but also have an office out of Bellevue. The majority of development though is still based out of Copenhagen and other European companies.
- ncr100 10y ago
  In addition to marketing in SF: (I work there) Ads, Analytics, Labs (VR), various dev relations, and more.
ThomPete 10y ago
Dane here (now expat) Europe in general have a problem with entrepreneurship. Stockholm, Berlin, London are the exceptions and even they don't really do that well compared to SV. Zendesk is also Danish originally, Tradeshift is, Podio.. they all end up leaving because the market opportunity in Denmark is very small (6mio) and there isn't easy enough access to talent when you need to scale up The biggest mistake many entrepreneurs do in Denmark is that they start with Denmark as a test market and so it's very hard for them to actually scale both mentally and practically. The primary issue in my mind isn't really income taxes (although they do play a role). Denmark have a progressive tax system which means the top bracket pays around 52% or something like that (and cars have 180% taxes on top of the value of the car). Denmark also have one of the most beneficial holdning company tax rules in Europe which allows for a lot of possibilities for startups. And keep in mind that it's very easy to be unemployed and build a startup in Denmark. Healthcare is free, education is free, childcare is heavily subsidized, you get social benefits. What really hinders Denmark is a combination of a small market, small ambitions and the lack of a proper ecosystem with alumni (they leave) and not to forget the in my mind crippling effect of the harmonization of the EU (not the common market which is great) and last but not least. There is very little tradition of scaling a company big (Denmark haven't created a +1000 person company for the last 50 years or something like that)
- uola 10y ago
  It's not really unexpected. The road to success was paved a decade or two ago. Stockholm has very few "random" successful startup, it's pretty much all things that Sweden has been traditionally good at. Creative industries (music, games, ads) and infrastructure (telecom, databases, payments).
  - ThomPete 10y ago
    Yeah and for it's size Denmark is doing pretty good. The problem is Europe in general.
- ced 10y ago
  there isn't easy enough access to talent when you need to scale up Isn't it harder/costlier to find talent in highly competitive SV than it is in Europe?
uola 10y ago
That's a pretty silly statement though. It's like expecting actors not to do movies in Hollywood. Even if they would have stayed (like a number of Swedish game companies) they would have most likely been bought by a US company in the end (like a number of Swedish game companies). If there's anything wrong with Europe it's this defeatist attitude in favor of the US instead of finding ways that gives you an edge.
- bjelkeman-again 10y ago
  As someone who has started companies in the US, UK, Sweden and Netherlands I must say that the US startup environment is still way ahead. There are ways of finding your European edge, but it isn't easy to get access to the people who will talk to you about growth funding. And the funds are smaller and often more cautious. To say we Europeans are all defeatist is a bit of an unnecessary generalisation. ;)
azernik 10y ago
It's not all that bad for the European (and other) countries involved though. A common pattern I've seen in multi-founder companies is for one or more (typically business-oriented) co-founders to move to the Bay and open what is technically the headquarters, while other (usually more technical) co-founders stay in the motherland and keep running a large development shop from there. Kind of like how every US bank needs a big New York office, even if a lot of their work is actually carried out in other parts of the country.
shin_lao 10y ago
The problem is a little bit subtler than that. Generally speaking, European are more risk adverse than Americans (I'll exclude the UK as Brits are a bit culturally closer to the US). You will find investors, but it will be very difficult to find someone willing to take risks and bet big. For me they behave more like bankers than VCs. Don't get me wrong, this kind of investors is fundamental for an economy to function as not all businesses are high risk/high reward and to be honest SV VCs could learn one thing or two about common sense from these folks. However, it means that if you come with a "crazy idea" or if you are basically saying that you will lose money for several years, it will be very very hard to find an investor in Europe. The European market being generally also more conservative and much more fragmented, scaling up is also much more expensive. Last but not least, Americans are very good at finding good European startups and importing them in the USA.
- hinkley 10y ago
  | Last but not least, Americans are very good at finding good European startups and importing them in the USA. We've had almost 400 years of practice. If we weren't good at it by now then it wasn't meant to be.
adolfoabegg 10y ago
Same situation here in Spain. It's very difficult (it's expensive) to be an entrepreneur. I mean, is very difficult for someone who has an idea, to validate it and built it just to see how the market accepts it. You have to register yourself as an independent professional which cost is around €260/month (plus other bureaucratic processes you need to complete [and pay for them of course]).
- sportanova 10y ago
  That's insane - almost like they don't want you to start a company. I assume most people just ignore it though
  - adolfoabegg 10y ago
    Well, people don't really start companies (not that easily at least) and it's really a shame because the government should ease things for everyone now that the unemployment level in Spain is around 22% Oh, btw, a couple of days ago the government announced that they will raise the corporation tax. [1] [1]http://www.ft.com/cms/s/0/55220458-483d-11e6-b387-64ab0a67014c.html http://www.ft.com/cms/s/0/55220458-483d-11e6-b387-64ab0a6701...
- rahimnathwani 10y ago
  "You have to register yourself as an independent professional which cost is around €260/month" I think you're referring to social security contributions for (which pay for healthcare and pension etc.). The amount is in the same ball park as a single freelancer would pay for healthcare in the US. Do you have to register as a autonomo even if you have zero income? If not, can't you build and start to validate your idea without charging money? That seems to be what a lot of SV startups do.
m12k 10y ago
The biggest chunk of their development team is still in Copenhagen (and the rest is scattered all over the world, with little actually happening in SF). You can't beat SF/SV when it comes to funding and networking with the industry. But when it comes to actually hiring engineers, Copenhagen still offers a big pool of highly skilled people with fewer other interesting jobs to choose from. It seems the optimal strategy is to develop in Europe, but have a sales/management presence in SF, maybe even officially re-incorporating there, even if it's mostly a front.

cloudjacker 10y ago

It is because Bay Area valuations are indefensible by most US standards and any European accounting standard

nojvek 10y ago
Or may be outside of Bay Area, not many are willing to put money where the mouth is
adwf 10y ago
Yeah, they'd laugh at you in London for asking for this kind of valuation unfortunately. (Except for the usual caveat of knowing the right people, etc.)
fundameen 10y ago
It's got nothing to do with 'accounting' at all, it's a matter of potential. Lots of smug fools laughed at $15 billion valuation for Facebook. A few years later and it's generating more than that in annual revenue. It seems that many people still find it difficult to comprehend what 1+ billion internet/computer users means for technology companies that are capable of scaling.
- autotune 10y ago
  How many startups fail every year again? Well let's find out: https://www.quora.com/What-percentage-of-startups-fail?srid=FEsz&share=0df0ea6f https://www.quora.com/What-percentage-of-startups-fail?srid=... Technology solves problems, but it doesn't mean every "problem" is actually a problem, or that it's worth solving. There will always be outliers.
  - argonaut 10y ago
    Yes, and? It's exactly that kind of focus - focusing on the average outcome rather than the power law outlier outcomes that return your entire fund - that characterize the people who laughed at FB's valuation, as opposed to the VCs who invested in FB.
    - autotune 10y ago
      I agree that risk is certainly required if you want to make a return on your investments, however, all I'm saying is that for every Facebook, there are hundreds more that don't make it where money gets wasted. If I were an investor I'd want to make sure there was a tangible product doing something innovative out there, rather than just a new way to collect and sell user data. I'm not a VC nor do I really inderstand the mindset though, so if investing in miracles is your thing and has worked for you then more power to you.
      - argonaut 10y ago
        Yes. Investing in miracles is what VCs do. Investing in 50 companies and only having 5 of them succeed is what they do. Investing in 50 companies and expecting 45 of them to succeed is called being a small business bank.
- cloudjacker 10y ago
  No, it really does have to do with accounting There are many VC backed companies that never state their valuation. There are many VC backed companies that do state their valuation after every funding round and buy up all the press releases [on techcrunch, exhibit a] so everybody knows. So their secretaries, banking partners, trophy wives, and sycophants fawn over them more. All of those companies have completely different 409a valuations, which are MUCH lower, because you can't just say "well 10% was sold for this much, so therefore 100% is this much". Nobody ever posts those. The FASB accounting standards are also much more intelligent. These valuations are literally only for impressionable people that don't want an intelligent valuation.
  - goseeastarwar 10y ago
    409A is lower because preferred shares have more rights over common shares. Employees want that number to be lower, to enjoy greater gains and lower exercise costs. In any case, as a company approaches an IPO event, the spread between common and preferred disappears. None of this is particularly controversial. Here's actual data for those curious: https://www.theinformation.com/comparing-common-stock-valuations-in-private-tech https://www.theinformation.com/comparing-common-stock-valuat...
    - cloudjacker 10y ago
      Not controversial, just useless compared to other valuations methods that have utility
- fitchjo 10y ago
  Just want to point out that in many industries a revenue multiple of less than 1.0 is expected [1], such that generating greater than $15 billion in revenue does not automatically result in a company worth $15 billion. That being said, FB's net assets are $50 billion (and it's market cap is much, much (holy cow it's alot) higher), so clearly those that got in at a $15 billion valuation are very happy right now. [1] http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/psdata.html http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/...
  - arcticfox 10y ago
    Software, for good reason, is not one of those industries (like aerospace, home furniture, etc.). Incremental capital cost in software per user is vanishingly small compared to building planes or sofas.
- SilasX 10y ago
  Market valuations are not the same as accounting valuations; American companies also have to use the "sane, conservative" figure in the appropriate contexts.
- forgetsusername 10y ago
  >Lots of smug fools laughed at $15 billion valuation for Facebook For every Facebook there are at least 10 Pets.coms or, worse yet, Enrons. I'm not sure how pointing out a single success justifies all valuations.

PhilipA 10y ago

Lots of lost jobs in Denmark - a shame that so many European jobs are lost due to bad options of funding in EU.

jakozaur 10y ago
Just be fair they still employ a lot of ppl in Denmark (164 according to LinkedIn), but majority is in USA (323). I thing this number may be skewed a bit, LinkedIn is more popular in USA than in Europe.
- PhilipA 10y ago
  The issue is that you know in what place they are going to grow in the future - it ain't going to be in Denmark.
- _delirium 10y ago
  They're quite different jobs also. Core Unity engine development and most of the tech jobs are in Copenhagen, while the SF office is mostly sales/marketing/accounting. It was kind of a half-move where they moved the "business office" to SF but didn't move the technical team. That happened years ago, initially mostly because of sales: having an "SF" company and a sales team based in SF made it easier to get in contact with the large customers who produced most of their licensing revenue (at least at the time).
adrenalinelol 10y ago
Can't this claim be applied to any globalization labor issue? Part of the EU is open borders, why stop with the EU member-state borders?
- wolfgke 10y ago
  > Part of the EU is open borders, why stop with the EU member-state borders? Because of the language borders usually correspond to the national borders of the EU member states. And if not language borders then completely different systems of taxation, employment rights etc.

laut 10y ago

In general people in Denmark don't have a ton of money to invest after paying taxes. If they do invest in Danish companies, those companies are held back somewhat by rules and further taxes. Some years ago there was a "entrepreneur tax" in Denmark which was an extra tax that affected business angels. Employees could also be required to pay taxes on employee stocks - money that they had not earned yet because they had not sold them. http://www.business.dk/navne/ivaerksaetterskat-skal-ses-efter-i-soemmene http://www.business.dk/navne/ivaerksaetterskat-skal-ses-efte... http://penge.dk/pension-skat/ejere-af-medarbejderaktier-risikerer-skattesmaek http://penge.dk/pension-skat/ejere-af-medarbejderaktier-risi...

pavlov 10y ago
Employees could also be required to pay taxes on employee stocks - money that they had not earned yet because they had not sold them. That is a major problem in the US system as well.
- BinaryIdiot 10y ago
  It is? I'm pretty ignorant with stocks so please excuse the stupid questions but I thought you weren't taxed until after selling them. Is that not the case? How does it work?
  - deleted 10y ago
    [deleted]
  - bwood 10y ago
    You also get taxed when exercising options even if you don't immediately sell the shares you just bought. Something like the difference between the strike price and the current value being treated as income you earn upon exercising the options, so it's taxable.
  - pavlov 10y ago
    The taxation structures around stock options in the United States appear extremely complex. Google for something like "taxation of stock options in private company"... I'm certainly not an expert, so don't listen to me for any financial or legal advice.

hiou 10y ago

"It" not "they". This is like saying Google moved to Ireland.

davidw 10y ago
Not necessarily: http://ell.stackexchange.com/a/71088 http://ell.stackexchange.com/a/71088
- deleted 10y ago
  [deleted]

zacharyz 10y ago

For what its worth, Unity is a pretty global company. They have marketing based in SF but also have an office out of Bellevue. The majority of development though is still based out of Copenhagen and other European companies.

ncr100 10y ago
In addition to marketing in SF: (I work there) Ads, Analytics, Labs (VR), various dev relations, and more.

ThomPete 10y ago

Dane here (now expat) Europe in general have a problem with entrepreneurship. Stockholm, Berlin, London are the exceptions and even they don't really do that well compared to SV. Zendesk is also Danish originally, Tradeshift is, Podio.. they all end up leaving because the market opportunity in Denmark is very small (6mio) and there isn't easy enough access to talent when you need to scale up The biggest mistake many entrepreneurs do in Denmark is that they start with Denmark as a test market and so it's very hard for them to actually scale both mentally and practically. The primary issue in my mind isn't really income taxes (although they do play a role). Denmark have a progressive tax system which means the top bracket pays around 52% or something like that (and cars have 180% taxes on top of the value of the car). Denmark also have one of the most beneficial holdning company tax rules in Europe which allows for a lot of possibilities for startups. And keep in mind that it's very easy to be unemployed and build a startup in Denmark. Healthcare is free, education is free, childcare is heavily subsidized, you get social benefits. What really hinders Denmark is a combination of a small market, small ambitions and the lack of a proper ecosystem with alumni (they leave) and not to forget the in my mind crippling effect of the harmonization of the EU (not the common market which is great) and last but not least. There is very little tradition of scaling a company big (Denmark haven't created a +1000 person company for the last 50 years or something like that)

uola 10y ago
It's not really unexpected. The road to success was paved a decade or two ago. Stockholm has very few "random" successful startup, it's pretty much all things that Sweden has been traditionally good at. Creative industries (music, games, ads) and infrastructure (telecom, databases, payments).
- ThomPete 10y ago
  Yeah and for it's size Denmark is doing pretty good. The problem is Europe in general.
ced 10y ago
there isn't easy enough access to talent when you need to scale up Isn't it harder/costlier to find talent in highly competitive SV than it is in Europe?

uola 10y ago

That's a pretty silly statement though. It's like expecting actors not to do movies in Hollywood. Even if they would have stayed (like a number of Swedish game companies) they would have most likely been bought by a US company in the end (like a number of Swedish game companies). If there's anything wrong with Europe it's this defeatist attitude in favor of the US instead of finding ways that gives you an edge.

bjelkeman-again 10y ago
As someone who has started companies in the US, UK, Sweden and Netherlands I must say that the US startup environment is still way ahead. There are ways of finding your European edge, but it isn't easy to get access to the people who will talk to you about growth funding. And the funds are smaller and often more cautious. To say we Europeans are all defeatist is a bit of an unnecessary generalisation. ;)

azernik 10y ago

It's not all that bad for the European (and other) countries involved though. A common pattern I've seen in multi-founder companies is for one or more (typically business-oriented) co-founders to move to the Bay and open what is technically the headquarters, while other (usually more technical) co-founders stay in the motherland and keep running a large development shop from there. Kind of like how every US bank needs a big New York office, even if a lot of their work is actually carried out in other parts of the country.

shin_lao 10y ago

The problem is a little bit subtler than that. Generally speaking, European are more risk adverse than Americans (I'll exclude the UK as Brits are a bit culturally closer to the US). You will find investors, but it will be very difficult to find someone willing to take risks and bet big. For me they behave more like bankers than VCs. Don't get me wrong, this kind of investors is fundamental for an economy to function as not all businesses are high risk/high reward and to be honest SV VCs could learn one thing or two about common sense from these folks. However, it means that if you come with a "crazy idea" or if you are basically saying that you will lose money for several years, it will be very very hard to find an investor in Europe. The European market being generally also more conservative and much more fragmented, scaling up is also much more expensive. Last but not least, Americans are very good at finding good European startups and importing them in the USA.

hinkley 10y ago
| Last but not least, Americans are very good at finding good European startups and importing them in the USA. We've had almost 400 years of practice. If we weren't good at it by now then it wasn't meant to be.

adolfoabegg 10y ago

Same situation here in Spain. It's very difficult (it's expensive) to be an entrepreneur. I mean, is very difficult for someone who has an idea, to validate it and built it just to see how the market accepts it. You have to register yourself as an independent professional which cost is around €260/month (plus other bureaucratic processes you need to complete [and pay for them of course]).

sportanova 10y ago
That's insane - almost like they don't want you to start a company. I assume most people just ignore it though
- adolfoabegg 10y ago
  Well, people don't really start companies (not that easily at least) and it's really a shame because the government should ease things for everyone now that the unemployment level in Spain is around 22% Oh, btw, a couple of days ago the government announced that they will raise the corporation tax. [1] [1]http://www.ft.com/cms/s/0/55220458-483d-11e6-b387-64ab0a67014c.html http://www.ft.com/cms/s/0/55220458-483d-11e6-b387-64ab0a6701...
rahimnathwani 10y ago
"You have to register yourself as an independent professional which cost is around €260/month" I think you're referring to social security contributions for (which pay for healthcare and pension etc.). The amount is in the same ball park as a single freelancer would pay for healthcare in the US. Do you have to register as a autonomo even if you have zero income? If not, can't you build and start to validate your idea without charging money? That seems to be what a lot of SV startups do.

m12k 10y ago

The biggest chunk of their development team is still in Copenhagen (and the rest is scattered all over the world, with little actually happening in SF). You can't beat SF/SV when it comes to funding and networking with the industry. But when it comes to actually hiring engineers, Copenhagen still offers a big pool of highly skilled people with fewer other interesting jobs to choose from. It seems the optimal strategy is to develop in Europe, but have a sales/management presence in SF, maybe even officially re-incorporating there, even if it's mostly a front.