7 ms·

> What it lacks is freely flowing funding such that risky enterprises can be funded even if 1 out of ten or 1 out of hundred actually are successful Might this

by jpttsn 5y ago

> What it lacks is freely flowing funding such that risky enterprises can be funded even if 1 out of ten or 1 out of hundred actually are successful Might this be a flip side of regulations that combat economic inequality? If so, the two should not be addressed as separate issues. But frontpage HN posts tend to be "Applauding Europes' long vacations and progressive taxes" and "Bemoaning Europe's lack of VCs with fuck you money".

whimsicalism 5y ago
Maybe, but I might need actual evidence as to that being the case.
- jpttsn 5y ago
  Evidence is hard: a double blind randomized control trial would be unrealistic and at a high level there would be innumerable confounders. However, the mechanism seems simple: 1. Regulation is designed to combat inequality 2. Lower inequality is achieved thanks to this regulation 3. As inequality is lower, fewer people have spare capital for risky investments Meanwhile, if this mechanism doesn’t work as above, that might imply we don’t (yet) have an effective way to regulate inequality down.
coryrc 5y ago
Sweden has more billionaires per capita than the USA. Similar to the US, they also pay less in taxes than the middle class. I wonder if Sweden has higher funding than the rest of the continent?
- Gwypaas 5y ago
  Sweden has higher funding per capita, but does not answer why it became this way. https://www.statista.com/statistics/1071105/value-of-investments-by-venture-capital-worldwide-by-key-market/ https://www.statista.com/statistics/1071105/value-of-investm...
  - coryrc 5y ago
    Wow, thanks for the link! Four times Germany and almost the same as the USA.
    - aapl88888 5y ago
      You are using a false equivalence. Almost none of Swedish billionaires are in high tech.
- aapl88888 5y ago
  Almost all of them are old people outside of tech https://en.wikipedia.org/wiki/List_of_Swedish_billionaires_by_net_worth https://en.wikipedia.org/wiki/List_of_Swedish_billionaires_b...
  - coryrc 5y ago
    Overall, little of Europe's VC goes into the kind of things we talk about on this site. But if levels are much smaller than the USA it just produces another burden. Looking at these numbers, if I was going to get funding I would try Sweden before France.
- mannerheim 5y ago
  > In the 2013 list, approximately 40 percent of Sweden’s billionaires are self-made while 60 percent inherited their wealth. In the United States, by contrast, 70 percent of billionaires are self-made while around 30 percent inherited their wealth. Once we exclude inherited wealth, the United States has around 1 self-made billionaire per million inhabitants compared to 0.6 for Sweden. https://www.nationalreview.com/the-agenda/guest-post-tino-sanandaji-swedish-billionaires-reihan-salam/ https://www.nationalreview.com/the-agenda/guest-post-tino-sa...
  - whimsicalism 5y ago
    50% of all wealth in the United States is inherited by the top 5% wealthiest families. 60% of all wealth in the United States is inherited.
    - mannerheim 5y ago
      Not particularly relevant. A significant chunk of that inherited wealth comes in the form of housing. The US has a total wealth of $105t, $36.2t of that is housing, which then ends up getting inherited by homeowners' children. We're talking about how billionaires make their wealth as a proxy for entrepreneurship. It makes no sense to talk about how many billionaires Sweden has as a measure for their entrepreneurship if most of them inherited their wealth.
      - CRConrad 5y ago
        > > 50% of all wealth in the United States is inherited by the top 5% wealthiest families. > Not particularly relevant. A significant chunk of that inherited wealth comes in the form of housing. The US has a total wealth of $105t, $36.2t of that is housing, which then ends up getting inherited by homeowners' children. Feels utterly relevant; what's irrelevant is your fact that much of US wealth is bound up in housing: The top 5% wealthiest families are hardly likely to live in 50% of all housing.
    - WalterBright 5y ago
      Gates/Allen/Bezos/Jobs/Ellison/Google/Netflix/etc did not inherit their wealth.
- hackerNoose 5y ago
  Sweden is unusual in that way. You often hear about that it's one of the countries with the most equal income distribution but at the same time it has one of the highest wealth inequalities. Basically it's hard to make any money by working you have to own things.
socialdemocrat 5y ago
While it may seem connected, it isn’t. Just look at history. America has been infamous as a country of get-rich-fast people almost since it was founded. Long before progressive taxes and social welfare. It is a cultural difference. This was at a time when the US was actually more egalitarian than Europe.
- tored 5y ago
  Some parts are probably cultural. The type of economy that the article is describing, rent-seeking, doesn't feel like it culturally could work in Europe when trying to build something large like Google or Facebook, that is at least my subjective feeling. That is why I'm somewhat skeptical against the article's proposition, offer it for free and then later come up with a scheme to extort users. I think there are other steps that can be taken first.
Gravityloss 5y ago
It could well be the opposite. For example free education improves a software company's hiring prospects as there are lots of employee candidates available with good education. In some countries social mobility is a real thing. As a practical counter example, Sweden has massive taxation and something like most billionaires per capita and a very vibrant software and startup scene. One could actually do some kind of survey what happens to European software companies. Take for example this one started by three Danish guys: https://en.wikipedia.org/wiki/Borland https://en.wikipedia.org/wiki/Borland
- _-david-_ 5y ago
  Sweden does not have the highest billionaires per capita. Hong Kong, Monaco, Switzerland all have higher rates for example. There are several additional places as well. Is Borland actually a European company? It looks like it was started in California and has a headquarters in Texas. It is now owned by a company in the UK, but it doesnt really seem European to me.
  - egman_ekki 5y ago
    From the wikipedia article: > Borland Ltd. was founded in August 1981 by three Danish citizens, Niels Jensen, Ole Henriksen, and Mogens Glad, to develop [...] However, response to the company's products at the CP/M-82 show in San Francisco showed that a U.S. company would be needed to reach the American market. They met Philippe Kahn, who had just moved to Silicon Valley... So yes, Borland is a US company, but founded by 3 Danish folks. That might indicate that Europe doesn't lack innovation or talent, but a large unified market with high purchasing power.
    - raverbashing 5y ago
      Well in 1981 if you wanted to sell stuff for personal computers you would have to be in the Valley. No question about it. I'd say it would have been hard to sell anything that specific even elsewhere in the US at the time.

by jpttsn 5y ago

whimsicalism 5y ago

Maybe, but I might need actual evidence as to that being the case.

jpttsn 5y ago
Evidence is hard: a double blind randomized control trial would be unrealistic and at a high level there would be innumerable confounders. However, the mechanism seems simple: 1. Regulation is designed to combat inequality 2. Lower inequality is achieved thanks to this regulation 3. As inequality is lower, fewer people have spare capital for risky investments Meanwhile, if this mechanism doesn’t work as above, that might imply we don’t (yet) have an effective way to regulate inequality down.

coryrc 5y ago

Sweden has more billionaires per capita than the USA. Similar to the US, they also pay less in taxes than the middle class. I wonder if Sweden has higher funding than the rest of the continent?

Gwypaas 5y ago
Sweden has higher funding per capita, but does not answer why it became this way. https://www.statista.com/statistics/1071105/value-of-investments-by-venture-capital-worldwide-by-key-market/ https://www.statista.com/statistics/1071105/value-of-investm...
- coryrc 5y ago
  Wow, thanks for the link! Four times Germany and almost the same as the USA.
  - aapl88888 5y ago
    You are using a false equivalence. Almost none of Swedish billionaires are in high tech.
aapl88888 5y ago
Almost all of them are old people outside of tech https://en.wikipedia.org/wiki/List_of_Swedish_billionaires_by_net_worth https://en.wikipedia.org/wiki/List_of_Swedish_billionaires_b...
- coryrc 5y ago
  Overall, little of Europe's VC goes into the kind of things we talk about on this site. But if levels are much smaller than the USA it just produces another burden. Looking at these numbers, if I was going to get funding I would try Sweden before France.
mannerheim 5y ago
> In the 2013 list, approximately 40 percent of Sweden’s billionaires are self-made while 60 percent inherited their wealth. In the United States, by contrast, 70 percent of billionaires are self-made while around 30 percent inherited their wealth. Once we exclude inherited wealth, the United States has around 1 self-made billionaire per million inhabitants compared to 0.6 for Sweden. https://www.nationalreview.com/the-agenda/guest-post-tino-sanandaji-swedish-billionaires-reihan-salam/ https://www.nationalreview.com/the-agenda/guest-post-tino-sa...
- whimsicalism 5y ago
  50% of all wealth in the United States is inherited by the top 5% wealthiest families. 60% of all wealth in the United States is inherited.
  - mannerheim 5y ago
    Not particularly relevant. A significant chunk of that inherited wealth comes in the form of housing. The US has a total wealth of $105t, $36.2t of that is housing, which then ends up getting inherited by homeowners' children. We're talking about how billionaires make their wealth as a proxy for entrepreneurship. It makes no sense to talk about how many billionaires Sweden has as a measure for their entrepreneurship if most of them inherited their wealth.
    - CRConrad 5y ago
      > > 50% of all wealth in the United States is inherited by the top 5% wealthiest families. > Not particularly relevant. A significant chunk of that inherited wealth comes in the form of housing. The US has a total wealth of $105t, $36.2t of that is housing, which then ends up getting inherited by homeowners' children. Feels utterly relevant; what's irrelevant is your fact that much of US wealth is bound up in housing: The top 5% wealthiest families are hardly likely to live in 50% of all housing.
  - WalterBright 5y ago
    Gates/Allen/Bezos/Jobs/Ellison/Google/Netflix/etc did not inherit their wealth.
hackerNoose 5y ago
Sweden is unusual in that way. You often hear about that it's one of the countries with the most equal income distribution but at the same time it has one of the highest wealth inequalities. Basically it's hard to make any money by working you have to own things.

socialdemocrat 5y ago

While it may seem connected, it isn’t. Just look at history. America has been infamous as a country of get-rich-fast people almost since it was founded. Long before progressive taxes and social welfare. It is a cultural difference. This was at a time when the US was actually more egalitarian than Europe.

tored 5y ago
Some parts are probably cultural. The type of economy that the article is describing, rent-seeking, doesn't feel like it culturally could work in Europe when trying to build something large like Google or Facebook, that is at least my subjective feeling. That is why I'm somewhat skeptical against the article's proposition, offer it for free and then later come up with a scheme to extort users. I think there are other steps that can be taken first.

Gravityloss 5y ago

It could well be the opposite. For example free education improves a software company's hiring prospects as there are lots of employee candidates available with good education. In some countries social mobility is a real thing. As a practical counter example, Sweden has massive taxation and something like most billionaires per capita and a very vibrant software and startup scene. One could actually do some kind of survey what happens to European software companies. Take for example this one started by three Danish guys: https://en.wikipedia.org/wiki/Borland https://en.wikipedia.org/wiki/Borland

_-david-_ 5y ago
Sweden does not have the highest billionaires per capita. Hong Kong, Monaco, Switzerland all have higher rates for example. There are several additional places as well. Is Borland actually a European company? It looks like it was started in California and has a headquarters in Texas. It is now owned by a company in the UK, but it doesnt really seem European to me.
- egman_ekki 5y ago
  From the wikipedia article: > Borland Ltd. was founded in August 1981 by three Danish citizens, Niels Jensen, Ole Henriksen, and Mogens Glad, to develop [...] However, response to the company's products at the CP/M-82 show in San Francisco showed that a U.S. company would be needed to reach the American market. They met Philippe Kahn, who had just moved to Silicon Valley... So yes, Borland is a US company, but founded by 3 Danish folks. That might indicate that Europe doesn't lack innovation or talent, but a large unified market with high purchasing power.
  - raverbashing 5y ago
    Well in 1981 if you wanted to sell stuff for personal computers you would have to be in the Valley. No question about it. I'd say it would have been hard to sell anything that specific even elsewhere in the US at the time.