8 ms·

Meanwhile in Silicon Valley, single companies can raise the same amount of money in one round of funding. It's quite pathetic in its lack of ambition.

barbazoo 5y ago
From the government though?
yohannparis 5y ago
In the Silicon Valley it's mostly private money, this is a government fund. Not the same thing.
- azinman2 5y ago
  Who do you think in part supplies the cash for SV VCs :)
- BobbyJo 5y ago
  The larger point is: you can't replace a healthy investment ecosystem with grants. A government fund is itself representative of a lack of ambition. If the EU actually wants its own SV, they're going to have to address regulation, not throw money around. The real problems startups face in the EU are labor and tax laws. Companies can't use equity as compensation (which is a big lure for talent) and it's extremely hard to fire people (which makes pivoting or dealing with general market changes impossible for small companies). Pro-employee policies are necessarily anti-employer. Smaller, more innovative, companies have a harder time surviving such policies. So long as there is greater risk in EU companies, investors will take their money elsewhere.
  - jiofih 5y ago
    It’s expensive to fire people, it can be done. Money doesn’t seem to be an issue for startups these days. Every company I’ve worked for has given equity as compensation here. Opening a company is insanely easier than anywhere else I’ve been. I can’t relate any of those factors to lack of innovation from my own experience. It must be something else?
  - hef19898 5y ago
    Well, it is easy to get rid of employees in case revenue is declining. ESOPs and RSUs are a very real thing as well. Of course, equity in an unproven company is basically short changing employees on salary. Also, the EU has what, almost 30 different sets of tax and labour laws.
    - BobbyJo 5y ago
      I was making generalizations based on things I had heard from people I know in Europe. The things I said may not apply everywhere, but I know from coworkers overseas that they definitely apply to Germany, France, and Italy.
      - hef19898 5y ago
        Having had a failed start-up myself in Germany, I take issue with the sentiment that equity isn't feasible as part of compensation. That usually comes from founders unwilling to work inside the legal framework to find a solution. And from investors, because paying employees with shares, that get deluded and take the second seat compared to investors, reduces HR costs for their portfolio companies.
        BobbyJo 5y ago
        > That usually comes from founders unwilling to work inside the legal framework to find a solution. I appreciate your engagement, but this statement feels like it proves my point. In the US, startups have simple, standard, procedures for creating option pools for future employees. I had my own failed startup in the US, and never had to give a thought to how to structure equity compensation.
        hef19898 5y ago
        Same goes here, again ESOPs or RSUs. You do need the correct legal entity. And I don't see any reason why stock based compensation would be the main reason holding European start ups back. Edit: Thinking of it, you can even do that with GmbH in Germany by handing out equity that is tied to to the employment, at least for directors and the like. Don't ask me about the details, obviously it never came to it in my case.
  - yokaze 5y ago
    > Companies can't use equity as compensation (which is a big lure for talent) What? Where do you get that? Then I better return all the equity I got. > and it's extremely hard to fire people I would say that is hyperbolic, unless you find anything but at-will employment "extremely hard". Small companies (<20?) in Germany, can fire people without reason. I do not know any country (Edit: in the EU), where restructuring is not a valid reason to fire someone (with a severance of 0.5-1.1 monthly salaries per year of employment). (Edit: But then, I cannot claim to know all the labour laws in the EU)
    - BobbyJo 5y ago
      > What? Where do you get that? Then I better return all the equity I got. Startups normally use options for equity compensation rather than direct shares because of the tax benefits for employees and simplicity for reporting. Options are look at more like regular shares in the EU. Can't was a bad way of phrasing it. More like shouldn't because tax laws make it a crap shoot. > I would say that is hyperbolic, unless you find anything but at-will employment "extremely hard"... Anything but at-will is extremely hard with knowledge work, especially for small companies.
  - vecinu 5y ago
    > Pro-employee policies are necessarily anti-employer I can't help but feel offended that you feel this way. As a technocrat, sure, let's treat employees as numbers on a sheet that we can hire and fire at will because who cares about them as people right? Don't forget employees are people, with families, who are usually working to sustain their own lives. It saddens me how deep this US-centric rhetoric on treating employees unfairly has gone.
    - BobbyJo 5y ago
      What way do I feel? I'm very pro-worker's rights, I'm just pointing out the flaw in the EUs approach.
      - vecinu 5y ago
        I'm not sure how you feel, that's up to you to tell us. The EU has done a fantastic job of respecting worker rights, from the right to disconnect, to time off / vacation from work, worker's rights for employment and having a social safety net if you become unemployed. If you like metrics you can read the world happiness report [1] or look at how the OECD measures income inequality across the world [2], the US is below most European countries. [1] https://happiness-report.s3.amazonaws.com/2021/WHR+21.pdf https://happiness-report.s3.amazonaws.com/2021/WHR+21.pdf [2] https://data.oecd.org/inequality/income-inequality.htm https://data.oecd.org/inequality/income-inequality.htm
  - marto1 5y ago
    There is also a bright side here. This indirectly incentives alternative organizational structures such as cooperatives. Some would argue it's also a healthier way to grow and has existed in more traditional sectors such as farming for a long time. Personally I think EU has a long way to go, but it's not all doom and gloom.
  - notbatmanyet 5y ago
    This accelerator is just to make more high risk capital available in certain select fields. It's actually a very small thing that the EU has fielded, the real solution has been and continues to be The Capital Markets Union (https://ec.europa.eu/info/business-economy-euro/growth-and-investment/capital-markets-union_en https://ec.europa.eu/info/business-economy-euro/growth-and-i...) It's far from completed, but I understand some of the more important actions have been done and it's already had a significant impact.
onion2k 5y ago
The only funding that's equivalent to the EU's $1.1bn this year has been GoPuff's $1.2b series G round, in a company that's been going for 8 years and has absolutely proved its market. Last year there were some bigger ones, Rivian's $2.5bn round for example, but even that wasn't exactly in a startup considering they'd already raised $3bn before. The VC funds in SV are definitely bigger and better than anything on this side of the Atlantic, but even in SV they're not exactly throwing huge bundles of cash at seed rounds any more. I wish they were. It was fun when people got a couple of mil to prove an idea. Reading the daft things that founders did (on Fucked Company) was a good laugh.
- jiofih 5y ago
  Crazy times when a company with zero revenue and no products launched is “not a startup” because of their funding…
estaseuropano 5y ago
Isn't that the problem? SV has too much cash going around so lots of bullshit is funded or companies run for decades on VC with the single mission to drive out all competitors and then hike prices. SV has given the world a lot but what actually usually innovation has come from there in the past 10 years (not companies that moved there for easy money, but rather actual innovation creation)?

barbazoo 5y ago

From the government though?

yohannparis 5y ago

In the Silicon Valley it's mostly private money, this is a government fund. Not the same thing.

azinman2 5y ago
Who do you think in part supplies the cash for SV VCs :)
BobbyJo 5y ago
The larger point is: you can't replace a healthy investment ecosystem with grants. A government fund is itself representative of a lack of ambition. If the EU actually wants its own SV, they're going to have to address regulation, not throw money around. The real problems startups face in the EU are labor and tax laws. Companies can't use equity as compensation (which is a big lure for talent) and it's extremely hard to fire people (which makes pivoting or dealing with general market changes impossible for small companies). Pro-employee policies are necessarily anti-employer. Smaller, more innovative, companies have a harder time surviving such policies. So long as there is greater risk in EU companies, investors will take their money elsewhere.
- jiofih 5y ago
  It’s expensive to fire people, it can be done. Money doesn’t seem to be an issue for startups these days. Every company I’ve worked for has given equity as compensation here. Opening a company is insanely easier than anywhere else I’ve been. I can’t relate any of those factors to lack of innovation from my own experience. It must be something else?
- hef19898 5y ago
  Well, it is easy to get rid of employees in case revenue is declining. ESOPs and RSUs are a very real thing as well. Of course, equity in an unproven company is basically short changing employees on salary. Also, the EU has what, almost 30 different sets of tax and labour laws.
  - BobbyJo 5y ago
    I was making generalizations based on things I had heard from people I know in Europe. The things I said may not apply everywhere, but I know from coworkers overseas that they definitely apply to Germany, France, and Italy.
    - hef19898 5y ago
      Having had a failed start-up myself in Germany, I take issue with the sentiment that equity isn't feasible as part of compensation. That usually comes from founders unwilling to work inside the legal framework to find a solution. And from investors, because paying employees with shares, that get deluded and take the second seat compared to investors, reduces HR costs for their portfolio companies.
      - BobbyJo 5y ago
        > That usually comes from founders unwilling to work inside the legal framework to find a solution. I appreciate your engagement, but this statement feels like it proves my point. In the US, startups have simple, standard, procedures for creating option pools for future employees. I had my own failed startup in the US, and never had to give a thought to how to structure equity compensation.
        hef19898 5y ago
        Same goes here, again ESOPs or RSUs. You do need the correct legal entity. And I don't see any reason why stock based compensation would be the main reason holding European start ups back. Edit: Thinking of it, you can even do that with GmbH in Germany by handing out equity that is tied to to the employment, at least for directors and the like. Don't ask me about the details, obviously it never came to it in my case.
- yokaze 5y ago
  > Companies can't use equity as compensation (which is a big lure for talent) What? Where do you get that? Then I better return all the equity I got. > and it's extremely hard to fire people I would say that is hyperbolic, unless you find anything but at-will employment "extremely hard". Small companies (<20?) in Germany, can fire people without reason. I do not know any country (Edit: in the EU), where restructuring is not a valid reason to fire someone (with a severance of 0.5-1.1 monthly salaries per year of employment). (Edit: But then, I cannot claim to know all the labour laws in the EU)
  - BobbyJo 5y ago
    > What? Where do you get that? Then I better return all the equity I got. Startups normally use options for equity compensation rather than direct shares because of the tax benefits for employees and simplicity for reporting. Options are look at more like regular shares in the EU. Can't was a bad way of phrasing it. More like shouldn't because tax laws make it a crap shoot. > I would say that is hyperbolic, unless you find anything but at-will employment "extremely hard"... Anything but at-will is extremely hard with knowledge work, especially for small companies.
- vecinu 5y ago
  > Pro-employee policies are necessarily anti-employer I can't help but feel offended that you feel this way. As a technocrat, sure, let's treat employees as numbers on a sheet that we can hire and fire at will because who cares about them as people right? Don't forget employees are people, with families, who are usually working to sustain their own lives. It saddens me how deep this US-centric rhetoric on treating employees unfairly has gone.
  - BobbyJo 5y ago
    What way do I feel? I'm very pro-worker's rights, I'm just pointing out the flaw in the EUs approach.
    - vecinu 5y ago
      I'm not sure how you feel, that's up to you to tell us. The EU has done a fantastic job of respecting worker rights, from the right to disconnect, to time off / vacation from work, worker's rights for employment and having a social safety net if you become unemployed. If you like metrics you can read the world happiness report [1] or look at how the OECD measures income inequality across the world [2], the US is below most European countries. [1] https://happiness-report.s3.amazonaws.com/2021/WHR+21.pdf https://happiness-report.s3.amazonaws.com/2021/WHR+21.pdf [2] https://data.oecd.org/inequality/income-inequality.htm https://data.oecd.org/inequality/income-inequality.htm
- marto1 5y ago
  There is also a bright side here. This indirectly incentives alternative organizational structures such as cooperatives. Some would argue it's also a healthier way to grow and has existed in more traditional sectors such as farming for a long time. Personally I think EU has a long way to go, but it's not all doom and gloom.
- notbatmanyet 5y ago
  This accelerator is just to make more high risk capital available in certain select fields. It's actually a very small thing that the EU has fielded, the real solution has been and continues to be The Capital Markets Union (https://ec.europa.eu/info/business-economy-euro/growth-and-investment/capital-markets-union_en https://ec.europa.eu/info/business-economy-euro/growth-and-i...) It's far from completed, but I understand some of the more important actions have been done and it's already had a significant impact.

onion2k 5y ago

The only funding that's equivalent to the EU's $1.1bn this year has been GoPuff's $1.2b series G round, in a company that's been going for 8 years and has absolutely proved its market. Last year there were some bigger ones, Rivian's $2.5bn round for example, but even that wasn't exactly in a startup considering they'd already raised $3bn before. The VC funds in SV are definitely bigger and better than anything on this side of the Atlantic, but even in SV they're not exactly throwing huge bundles of cash at seed rounds any more. I wish they were. It was fun when people got a couple of mil to prove an idea. Reading the daft things that founders did (on Fucked Company) was a good laugh.

jiofih 5y ago
Crazy times when a company with zero revenue and no products launched is “not a startup” because of their funding…

estaseuropano 5y ago

Isn't that the problem? SV has too much cash going around so lots of bullshit is funded or companies run for decades on VC with the single mission to drive out all competitors and then hike prices. SV has given the world a lot but what actually usually innovation has come from there in the past 10 years (not companies that moved there for easy money, but rather actual innovation creation)?