9 ms·

The European Union should devote some of the untold billions they rain on farming subsidies and bailouts, and provide a EU-wide venture fund. YC model, other al

by yholio 6y ago

The European Union should devote some of the untold billions they rain on farming subsidies and bailouts, and provide a EU-wide venture fund. YC model, other alumni and successful tech leaders select the most promising startups in a competitive bid for a fixed share ratio. This would do more for EU tech innovation that any other bureaucratic and academically driven initiatives had thus far.

speedgoose 6y ago
The EU already grants a lot of money for research and innovation. You have the horizon 2020 and horizon Europe programs for example. It's not perfect of course but it works. https://en.m.wikipedia.org/wiki/Framework_Programmes_for_Research_and_Technological_Development https://en.m.wikipedia.org/wiki/Framework_Programmes_for_Res...
- Lionga 6y ago
  Show any unicorn financed by the horizon billions the EU wastes on these programs. Never was never will be one. It just does not work
  - merightnow 6y ago
    The scope is not to produce "unicorns" but to drive innovation and R&D for all different kinds of projects. Those funds should not act as VC with the only purpose of growth, but it should fund sustainable innovative companies or open source foundations. Lately I've been seeing the EU founded logo on more and more extremely useful open source programs that everyone uses and which had no funding sources because of the lack of "extreme profit" in the horizon and that should be the results that this grants achieve.
    - deleted 6y ago
      [deleted]
    - jariel 6y ago
      "it should fund sustainable innovative companies or open source foundations." Show material examples of this. Also, the EU needs 'big companies' that employ a lot of people, pay high salaries, can afford to sustain complicated projects with know-how, to acquire and integrate other projects. A nice batch of 'open source' projects that some people might use will not move the needle.
      - p1necone 6y ago
        "the EU needs 'big companies' that employ a lot of people, pay high salaries, can afford to sustain complicated projects with know-how, to acquire and integrate other projects." Why? Funding open source projects seems just as useful to me.
        thatguy0900 6y ago
        If you don't the big companies from other nations will take you over and flaunt your laws and regulations seems to be the answer
        ponker 6y ago
        *flout
        jariel 6y ago
        Open Source is a small issue thing in the context of an entire economy. It's nice to have some support for it, but it doesn't even lend well to that: it's very hard to know which projects to support until after the fact, of course we know that 99% of it is never even used. The kinds of people involved don't do it generally for money, and also have their own ambitions. What happens when you have a 'great piece of open source' that AirBus and Daimler really want to integrate, but the 'maintainer' just doesn't care to make the necessary changes? Or is against it? Or is only working 'now and then ? Or doesn't feel 'large corps should benefit' or whatever? It's a tricky space. Worth supporting, but it would take a very specialized team and frankly, not that much money. Europe needs large industrial organizations because they are the lifeblood of the economy, in fact, the hallmark of advanced civilizations. You want to know the 'difference' between 'rich' and 'poor' Europe? In 'rich Europe' a far grater portion of the population works in corporations with >1K employees. Only at a certain scale can a lot of activities be addressed: you can't make an airliner with all it's supply chain, IP, R&D, systems integration, training, support and the myriad of operational activities with 'open source' or even with 'small shops' or 'vc money'. A lot of know-how is embedded within these groups that given them competitive advantage, and of course, scale is necessary to be competitive at an international level especially in 'winner takes all' type markets. EU investment in open source is nice, but it's a side-show. What EU needs is Googles & Salesforces etc..
  - cblconfederate 6y ago
    I am participatingn in such a program now. Can confirm, it looks great on paper (and it's mostly about writing reports etc) but creating useful outputs is optional.
  - speedgoose 6y ago
    Unicorns are perhaps not something to wish for.
- knuthsat 6y ago
  The EU is silly. Most of these grants are picked up by beurocrats that know how to get them and enrich themselves. Best example is that big blue brain project in Switzerland that got billions even when the science was not there. Universities are currently filled with bureaucrats that know how to win grants and produce no results.
  - marmaduke 6y ago
    > Best example is that big blue brain project in Switzerland that got billions even when the science was not there. It's the Human Brain Project, and it's 1 billion over 10 years. It is currently in year 7, and at the end, it will provide the AWS of neuroscience in Europe.
    - yholio 6y ago
      Seems like they built a wonderful machine for answering "42": https://www.theatlantic.com/science/archive/2019/07/ten-years-human-brain-project-simulation-markram-ted-talk/594493/ https://www.theatlantic.com/science/archive/2019/07/ten-year... Or will build, if they are granted the additional money they ask for past 2023: “The development of high-quality brain simulators requires a long-term commitment of resources”. We shall call it Deep Thought: the sunk-cost brain.
      - marmaduke 6y ago
        the project is actually in 3 stages, the first 2 dubious, the one which just started in April is worth reconsidering, see my sibling comment here: https://news.ycombinator.com/item?id=24605138 https://news.ycombinator.com/item?id=24605138
    - jacquesm 6y ago
      I think it will utterly fail. Some interesting spin-offs may still happen but the whole project is a great exercise in marketing, not so much in science.
      - 6y ago
- auggierose 6y ago
  Horizon 2020 does not work. It's all gobbled up by professional grant writers, not professional researchers.
  - marmaduke 6y ago
    Not all the H2020 projects, at least.
  - speedgoose 6y ago
    A professional researcher in Europe is a professional Horizon grant writer.
    - auggierose 6y ago
      A mediocre researcher in Europe is a professional Horizon grant writer. Here, fixed that for you.
auganov 6y ago
Or EU could stop ruining the market with all their current programs and deregulate. Most "startups" in the EU are nothing more than grant chasers. There's very little private VC money because of all the grants. Even legitimate projects that take these grants aren't necessarily any better for it because of all the overhead they introduce. It's most pronounced in new EU countries that get flooded with these funds.
- mschuster91 6y ago
  > There's very little private VC money because of all the grants. That's wrong. There are four real reasons: 1) our pension systems are mostly government run and on a rolling scheme (i.e. payments from current workers fund current pensioners, in exchange for future-redeemable points). That means that there is a lot less of "dumb cash" lying around in pension funds that screams to be invested for decades... historically that cash used to be put into "safe bets" such as government bonds but their returns are at below-inflation rates, and the only thing that is "profitable" is spreading out the cash over either the big tech companies or small startups. 2) networking. Just look who's in the "angel investor" rounds: people, both founders and early employees who got lots of money in the dotcom era or in the IPOs of the last years - they are all concentrated in the SV area, and enjoy the benefits of close personal contact, and then of course there is YC and a couple of less known clones which come in later. We simply do not have such networks in Europe. 3) risk aversity. Europeans do not like risk, the most obvious example being us Germans who are notorious for being risk averse, so risk averse that our car companies, 12 years after Tesla hit the market, still believe they can make "clean ICE" cars (by investing in synth-fuel tech). A side effect of that is the infamous Wirecard scandal - they were hyped so hard by everyone including our Chancellor who went lobbying in China simply because they were the only company other than dinosaur SAP who were German, were in digital business, and had (on the paper...) good business numbers. 4) "rags to riches" mentality: us Europeans have generally decent social security networks, stable government funded education - basically, you don't have that mentality, starting with young people, to "always hustle" to survive. We live mostly generally comfortable lives, but we're not driven to exploit whatever and wherever we can, simply because we don't need to. The end result: we don't have venture capital simply because there has been no need for it for decades, it's only a recent trend here.
pilsetnieks 6y ago
https://ec.europa.eu/easme/en/eic-accelerator https://ec.europa.eu/easme/en/eic-accelerator https://europa.eu/youreurope/business/finance-funding/getting-funding/eu-funding-programmes/index_en.htm https://europa.eu/youreurope/business/finance-funding/gettin... https://europa.eu/youreurope/business/finance-funding/getting-funding/access-finance/index_en.htm https://europa.eu/youreurope/business/finance-funding/gettin... https://ec.europa.eu/regional_policy/en/funding/erdf/ https://ec.europa.eu/regional_policy/en/funding/erdf/ https://ec.europa.eu/regional_policy/en/funding/cohesion-fund/ https://ec.europa.eu/regional_policy/en/funding/cohesion-fun... https://ec.europa.eu/regional_policy/en/funding/social-fund/ https://ec.europa.eu/regional_policy/en/funding/social-fund/
- INTPenis 6y ago
  This is a good list! Besides these EU projects there are also national projects within EU member states. Like for example the NIC-SE foundation that manage the .se ccTLD tend to grant money to small startups.
- yholio 6y ago
  I think following any of those links and comparing them to the https://www.ycombinator.com/deal/ https://www.ycombinator.com/deal/ page is a good illustration of how these programs fail. The bureaucracy for applying is daunting. The Accelerator will not fund pure startup ideas, rather technologies that have reached TRL 6-8, so not just a proof of concept demo, but a functional system in real life environment. The European Innovation Council will fund prospective technologies but only in well specified areas of interest. Most recent unicorns will simply not thrive in this environment, it's more catered to the professional grant seekers or already successful companies, that can absorb a financing round of 500k-2.5 mil €
  - raverbashing 6y ago
    Well, comparing those grants to YC is a bit of apples to oranges. That being said, I don't think it's wrong for medium to large companies to apply for these grants, and the US also does offer grants.
georgeburdell 6y ago
Money will not solve the EU's pervasive problem with corruption and grift. I'm thinking of huge investments like the 1bn euro flagship fund for graphene that have done nothing except prop up existing institutions of well-connected academics
- jnurmine 6y ago
  Except there are already products on the market as a result of the Graphene Flagship... https://graphene-flagship.eu/products https://graphene-flagship.eu/products Also many new innovations on the way. Like "green graphene" composite, made from biomass, by Brightday Graphene in Sweden.
odiroot 6y ago
This is sort of already happening. As fa as I remember, all the startups I've ever worked for received grants from EU. It's really a common thing.
jacquesm 6y ago
Lack of money is not the problem. The problem is that anything remotely successful gets acquired by a US entity or that people don't even bother to try to get off the ground in the EU but that they start in SV through YC or some other US based accelerator.
CerealFounder 6y ago
Its just doesn't seem like the culture.
0xfaded 6y ago
As another poster pointed out, there are plenty of billions being sloshed about. But in my experience all this does is subsidize private investment. If an investor knows that the money they are putting in will unlock 3:1 in public money, then there's a pretty good argument for the investor to only give you a quarter of what you actually need. What's less thought about is how much time is wasted chasing tiny check sizes from these government programs. And then the reporting requirements are insane, hour by hour break downs of work plus reports and presentations at the end. They also don't like to give out large amounts and would rather fund lots of small partial projects, wasting even more time. As far as innovation in the EU goes, the governments (yes, plural, another problem) need to get out of the way. I'm usually positive when it comes to the functioning of European governments, but this is one of the major exceptions. I argue for European federalism, but also realize that's unrealistic. One possible step in the right direction would be to have an EU wide company structure with a single set of rules that makes investment between different European countries less complicated for companies and investors. I've also thought that a high profile EU investor could force some change by making it a requrement for their portfolio companies to immediately invert ownership to a Delaware Corp. That would open them up to US capital while simultaneously pissing of a lot of the innovation people in the government.

by yholio 6y ago

speedgoose 6y ago

The EU already grants a lot of money for research and innovation. You have the horizon 2020 and horizon Europe programs for example. It's not perfect of course but it works. https://en.m.wikipedia.org/wiki/Framework_Programmes_for_Research_and_Technological_Development https://en.m.wikipedia.org/wiki/Framework_Programmes_for_Res...

Lionga 6y ago
Show any unicorn financed by the horizon billions the EU wastes on these programs. Never was never will be one. It just does not work
- merightnow 6y ago
  The scope is not to produce "unicorns" but to drive innovation and R&D for all different kinds of projects. Those funds should not act as VC with the only purpose of growth, but it should fund sustainable innovative companies or open source foundations. Lately I've been seeing the EU founded logo on more and more extremely useful open source programs that everyone uses and which had no funding sources because of the lack of "extreme profit" in the horizon and that should be the results that this grants achieve.
  - deleted 6y ago
    [deleted]
  - jariel 6y ago
    "it should fund sustainable innovative companies or open source foundations." Show material examples of this. Also, the EU needs 'big companies' that employ a lot of people, pay high salaries, can afford to sustain complicated projects with know-how, to acquire and integrate other projects. A nice batch of 'open source' projects that some people might use will not move the needle.
    - p1necone 6y ago
      "the EU needs 'big companies' that employ a lot of people, pay high salaries, can afford to sustain complicated projects with know-how, to acquire and integrate other projects." Why? Funding open source projects seems just as useful to me.
      - thatguy0900 6y ago
        If you don't the big companies from other nations will take you over and flaunt your laws and regulations seems to be the answer
        ponker 6y ago
        *flout
      - jariel 6y ago
        Open Source is a small issue thing in the context of an entire economy. It's nice to have some support for it, but it doesn't even lend well to that: it's very hard to know which projects to support until after the fact, of course we know that 99% of it is never even used. The kinds of people involved don't do it generally for money, and also have their own ambitions. What happens when you have a 'great piece of open source' that AirBus and Daimler really want to integrate, but the 'maintainer' just doesn't care to make the necessary changes? Or is against it? Or is only working 'now and then ? Or doesn't feel 'large corps should benefit' or whatever? It's a tricky space. Worth supporting, but it would take a very specialized team and frankly, not that much money. Europe needs large industrial organizations because they are the lifeblood of the economy, in fact, the hallmark of advanced civilizations. You want to know the 'difference' between 'rich' and 'poor' Europe? In 'rich Europe' a far grater portion of the population works in corporations with >1K employees. Only at a certain scale can a lot of activities be addressed: you can't make an airliner with all it's supply chain, IP, R&D, systems integration, training, support and the myriad of operational activities with 'open source' or even with 'small shops' or 'vc money'. A lot of know-how is embedded within these groups that given them competitive advantage, and of course, scale is necessary to be competitive at an international level especially in 'winner takes all' type markets. EU investment in open source is nice, but it's a side-show. What EU needs is Googles & Salesforces etc..
- cblconfederate 6y ago
  I am participatingn in such a program now. Can confirm, it looks great on paper (and it's mostly about writing reports etc) but creating useful outputs is optional.
- speedgoose 6y ago
  Unicorns are perhaps not something to wish for.
knuthsat 6y ago
The EU is silly. Most of these grants are picked up by beurocrats that know how to get them and enrich themselves. Best example is that big blue brain project in Switzerland that got billions even when the science was not there. Universities are currently filled with bureaucrats that know how to win grants and produce no results.
- marmaduke 6y ago
  > Best example is that big blue brain project in Switzerland that got billions even when the science was not there. It's the Human Brain Project, and it's 1 billion over 10 years. It is currently in year 7, and at the end, it will provide the AWS of neuroscience in Europe.
  - yholio 6y ago
    Seems like they built a wonderful machine for answering "42": https://www.theatlantic.com/science/archive/2019/07/ten-years-human-brain-project-simulation-markram-ted-talk/594493/ https://www.theatlantic.com/science/archive/2019/07/ten-year... Or will build, if they are granted the additional money they ask for past 2023: “The development of high-quality brain simulators requires a long-term commitment of resources”. We shall call it Deep Thought: the sunk-cost brain.
    - marmaduke 6y ago
      the project is actually in 3 stages, the first 2 dubious, the one which just started in April is worth reconsidering, see my sibling comment here: https://news.ycombinator.com/item?id=24605138 https://news.ycombinator.com/item?id=24605138
  - jacquesm 6y ago
    I think it will utterly fail. Some interesting spin-offs may still happen but the whole project is a great exercise in marketing, not so much in science.
    - 6y ago
auggierose 6y ago
Horizon 2020 does not work. It's all gobbled up by professional grant writers, not professional researchers.
- marmaduke 6y ago
  Not all the H2020 projects, at least.
- speedgoose 6y ago
  A professional researcher in Europe is a professional Horizon grant writer.
  - auggierose 6y ago
    A mediocre researcher in Europe is a professional Horizon grant writer. Here, fixed that for you.

auganov 6y ago

Or EU could stop ruining the market with all their current programs and deregulate. Most "startups" in the EU are nothing more than grant chasers. There's very little private VC money because of all the grants. Even legitimate projects that take these grants aren't necessarily any better for it because of all the overhead they introduce. It's most pronounced in new EU countries that get flooded with these funds.

mschuster91 6y ago
> There's very little private VC money because of all the grants. That's wrong. There are four real reasons: 1) our pension systems are mostly government run and on a rolling scheme (i.e. payments from current workers fund current pensioners, in exchange for future-redeemable points). That means that there is a lot less of "dumb cash" lying around in pension funds that screams to be invested for decades... historically that cash used to be put into "safe bets" such as government bonds but their returns are at below-inflation rates, and the only thing that is "profitable" is spreading out the cash over either the big tech companies or small startups. 2) networking. Just look who's in the "angel investor" rounds: people, both founders and early employees who got lots of money in the dotcom era or in the IPOs of the last years - they are all concentrated in the SV area, and enjoy the benefits of close personal contact, and then of course there is YC and a couple of less known clones which come in later. We simply do not have such networks in Europe. 3) risk aversity. Europeans do not like risk, the most obvious example being us Germans who are notorious for being risk averse, so risk averse that our car companies, 12 years after Tesla hit the market, still believe they can make "clean ICE" cars (by investing in synth-fuel tech). A side effect of that is the infamous Wirecard scandal - they were hyped so hard by everyone including our Chancellor who went lobbying in China simply because they were the only company other than dinosaur SAP who were German, were in digital business, and had (on the paper...) good business numbers. 4) "rags to riches" mentality: us Europeans have generally decent social security networks, stable government funded education - basically, you don't have that mentality, starting with young people, to "always hustle" to survive. We live mostly generally comfortable lives, but we're not driven to exploit whatever and wherever we can, simply because we don't need to. The end result: we don't have venture capital simply because there has been no need for it for decades, it's only a recent trend here.

pilsetnieks 6y ago

https://ec.europa.eu/easme/en/eic-accelerator https://ec.europa.eu/easme/en/eic-accelerator https://europa.eu/youreurope/business/finance-funding/getting-funding/eu-funding-programmes/index_en.htm https://europa.eu/youreurope/business/finance-funding/gettin... https://europa.eu/youreurope/business/finance-funding/getting-funding/access-finance/index_en.htm https://europa.eu/youreurope/business/finance-funding/gettin... https://ec.europa.eu/regional_policy/en/funding/erdf/ https://ec.europa.eu/regional_policy/en/funding/erdf/ https://ec.europa.eu/regional_policy/en/funding/cohesion-fund/ https://ec.europa.eu/regional_policy/en/funding/cohesion-fun... https://ec.europa.eu/regional_policy/en/funding/social-fund/ https://ec.europa.eu/regional_policy/en/funding/social-fund/

INTPenis 6y ago
This is a good list! Besides these EU projects there are also national projects within EU member states. Like for example the NIC-SE foundation that manage the .se ccTLD tend to grant money to small startups.
yholio 6y ago
I think following any of those links and comparing them to the https://www.ycombinator.com/deal/ https://www.ycombinator.com/deal/ page is a good illustration of how these programs fail. The bureaucracy for applying is daunting. The Accelerator will not fund pure startup ideas, rather technologies that have reached TRL 6-8, so not just a proof of concept demo, but a functional system in real life environment. The European Innovation Council will fund prospective technologies but only in well specified areas of interest. Most recent unicorns will simply not thrive in this environment, it's more catered to the professional grant seekers or already successful companies, that can absorb a financing round of 500k-2.5 mil €
- raverbashing 6y ago
  Well, comparing those grants to YC is a bit of apples to oranges. That being said, I don't think it's wrong for medium to large companies to apply for these grants, and the US also does offer grants.

georgeburdell 6y ago

Money will not solve the EU's pervasive problem with corruption and grift. I'm thinking of huge investments like the 1bn euro flagship fund for graphene that have done nothing except prop up existing institutions of well-connected academics

jnurmine 6y ago
Except there are already products on the market as a result of the Graphene Flagship... https://graphene-flagship.eu/products https://graphene-flagship.eu/products Also many new innovations on the way. Like "green graphene" composite, made from biomass, by Brightday Graphene in Sweden.

odiroot 6y ago

This is sort of already happening. As fa as I remember, all the startups I've ever worked for received grants from EU. It's really a common thing.

jacquesm 6y ago

Lack of money is not the problem. The problem is that anything remotely successful gets acquired by a US entity or that people don't even bother to try to get off the ground in the EU but that they start in SV through YC or some other US based accelerator.

CerealFounder 6y ago

Its just doesn't seem like the culture.

0xfaded 6y ago

As another poster pointed out, there are plenty of billions being sloshed about. But in my experience all this does is subsidize private investment. If an investor knows that the money they are putting in will unlock 3:1 in public money, then there's a pretty good argument for the investor to only give you a quarter of what you actually need. What's less thought about is how much time is wasted chasing tiny check sizes from these government programs. And then the reporting requirements are insane, hour by hour break downs of work plus reports and presentations at the end. They also don't like to give out large amounts and would rather fund lots of small partial projects, wasting even more time. As far as innovation in the EU goes, the governments (yes, plural, another problem) need to get out of the way. I'm usually positive when it comes to the functioning of European governments, but this is one of the major exceptions. I argue for European federalism, but also realize that's unrealistic. One possible step in the right direction would be to have an EU wide company structure with a single set of rules that makes investment between different European countries less complicated for companies and investors. I've also thought that a high profile EU investor could force some change by making it a requrement for their portfolio companies to immediately invert ownership to a Delaware Corp. That would open them up to US capital while simultaneously pissing of a lot of the innovation people in the government.