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The major problem in EU is not really starting the companies. Most countries have ways to incorporate by filing a form and sending an email or two. The problem

by yoz-y 5y ago

The major problem in EU is not really starting the companies. Most countries have ways to incorporate by filing a form and sending an email or two. The problem though is financing, French investors for example are really stingy and you won’t get somebody to just throw a few millions at you to see if you succeed. France has decided to build the “French Silicon Valley” multiple times by grouping schools and companies together, providing facilities and so on. But it always fails because there is no VC money pool. If you start a company here, better think about profitability from the get go.

tluyben2 5y ago
This is the core: enough smart folk, enough ideas etc but people here sit on their money. EU investors invest in sure things and sure things are just not FAANGS when they start out. The appetite for risk is close to 0. You can see this when getting into EU incubators who try to mimic HN: they are absolutely waiting for that thing to happen where they are sure they will have ROI at which moment you can just walk to a bank or to a much better investor. This slows things down but mostly kills them entirely.
- ChuckNorris89 5y ago
  > EU investors invest in sure things Which is mostly real-estate
thow-01187 5y ago
> French investors for example are really stingy and you won’t get somebody to just throw a few millions at you to see if you succeed Isn't that...normal? Where did the attitude come from - that startups are somehow entitled to funding worth of several lifetime median incomes, for their half-baked business ideas that are unlikely to ever turn profit? That if the country doesn't shower the founders with angel investor money just for showing up, they are somehow unreasonably risk-averse and stingy. As an example - Docker, arguably the most influential software of the past decade, was developed in France. HN has derided French investors for not investing in it, leading to the company relocation to US. Afaik, Docker is still burning money, with no end in sight, and will continue to do so indefinitely unless a buyout at ridiculous valuation happens. Looks like...the stingy French investors were right after all...
- deleted 5y ago
  [deleted]
- yoz-y 5y ago
  It has problems. If you have an idea that will take you a year to develop with 10 people, you need one million up front (simplifying a lot). But if the investors only give you 250k, they you need to spend time working on getting that missing 750k which will dilute your focus from the product you actually want to build. But the initial investor will still want that product. I definitely think that there is some middle ground to find between not being able to rise money for any project, and being able to get 100M funding for a juicer.
- varjag 5y ago
  If they stingy French investors have invested then into Docker, which now you say is posed for "a buyout at ridiculous valuation"? Yes sounds like they missed out big.
dmitriid 5y ago
> If you start a company here, better think about profitability from the get go. How is this a bad thing? Compare this requirement to, say, Uber, who has been losing billions, and has used investor money to engage in price dumping to corner the market.
- yoz-y 5y ago
  There are tech startups and then there are "burn cash by subsidizing the 10% using VC money" startups. Uber is the latter and imo the role of the investor is to be able to distinguish which one is which. However there is a case when you need money to actually do things, e.g.: pay employees, run clinical trials, rent or build up production capacity. If you don't have initial funds then you will be bogged down by doing contract work to hopefully fund your idea one day. It will slow you down and also quite possibly tangle you in support contracts in products you don't actually want to maintain.
  - dmitriid 5y ago
    > There are tech startups and then there are "burn cash by subsidizing the 10% using VC money" My feeling is that the absolute vast majority of tech startups in the US are of the second kind. > However there is a case when you need money to actually do things, e.g.: pay employees, run clinical trials, rent or build up production capacity. If you don't have initial funds This has always been the case. Until unlimited US money perverted the incentives to become "waste billions to corner the market by barely legal means" or "wasted billions until someone buys you".
    - relativ575 5y ago
      > My feeling is that the absolute vast majority of tech startups in the US are of the second kind. Let's take a look at YC companies, which is representative to the kind of startups we're talking about here. Do you think the majority of them get the funding to burn and subsidize the 10%?
      - 5y ago

by yoz-y 5y ago

tluyben2 5y ago

This is the core: enough smart folk, enough ideas etc but people here sit on their money. EU investors invest in sure things and sure things are just not FAANGS when they start out. The appetite for risk is close to 0. You can see this when getting into EU incubators who try to mimic HN: they are absolutely waiting for that thing to happen where they are sure they will have ROI at which moment you can just walk to a bank or to a much better investor. This slows things down but mostly kills them entirely.

ChuckNorris89 5y ago
> EU investors invest in sure things Which is mostly real-estate

thow-01187 5y ago

> French investors for example are really stingy and you won’t get somebody to just throw a few millions at you to see if you succeed Isn't that...normal? Where did the attitude come from - that startups are somehow entitled to funding worth of several lifetime median incomes, for their half-baked business ideas that are unlikely to ever turn profit? That if the country doesn't shower the founders with angel investor money just for showing up, they are somehow unreasonably risk-averse and stingy. As an example - Docker, arguably the most influential software of the past decade, was developed in France. HN has derided French investors for not investing in it, leading to the company relocation to US. Afaik, Docker is still burning money, with no end in sight, and will continue to do so indefinitely unless a buyout at ridiculous valuation happens. Looks like...the stingy French investors were right after all...

deleted 5y ago
[deleted]
yoz-y 5y ago
It has problems. If you have an idea that will take you a year to develop with 10 people, you need one million up front (simplifying a lot). But if the investors only give you 250k, they you need to spend time working on getting that missing 750k which will dilute your focus from the product you actually want to build. But the initial investor will still want that product. I definitely think that there is some middle ground to find between not being able to rise money for any project, and being able to get 100M funding for a juicer.
varjag 5y ago
If they stingy French investors have invested then into Docker, which now you say is posed for "a buyout at ridiculous valuation"? Yes sounds like they missed out big.

dmitriid 5y ago

> If you start a company here, better think about profitability from the get go. How is this a bad thing? Compare this requirement to, say, Uber, who has been losing billions, and has used investor money to engage in price dumping to corner the market.

yoz-y 5y ago
There are tech startups and then there are "burn cash by subsidizing the 10% using VC money" startups. Uber is the latter and imo the role of the investor is to be able to distinguish which one is which. However there is a case when you need money to actually do things, e.g.: pay employees, run clinical trials, rent or build up production capacity. If you don't have initial funds then you will be bogged down by doing contract work to hopefully fund your idea one day. It will slow you down and also quite possibly tangle you in support contracts in products you don't actually want to maintain.
- dmitriid 5y ago
  > There are tech startups and then there are "burn cash by subsidizing the 10% using VC money" My feeling is that the absolute vast majority of tech startups in the US are of the second kind. > However there is a case when you need money to actually do things, e.g.: pay employees, run clinical trials, rent or build up production capacity. If you don't have initial funds This has always been the case. Until unlimited US money perverted the incentives to become "waste billions to corner the market by barely legal means" or "wasted billions until someone buys you".
  - relativ575 5y ago
    > My feeling is that the absolute vast majority of tech startups in the US are of the second kind. Let's take a look at YC companies, which is representative to the kind of startups we're talking about here. Do you think the majority of them get the funding to burn and subsidize the 10%?
    - 5y ago