6 ms·

It's not "European startup ecosystem", it's basically "European societies". Imagine how well would SV work if being involved in a bankrupt company (co-founder,

by lrem 5y ago

It's not "European startup ecosystem", it's basically "European societies". Imagine how well would SV work if being involved in a bankrupt company (co-founder, major investor, C-suite) made banks refuse to talk to you again for 10-20 years. I believe that was the case in France. You wouldn't even be able to open a checking account, never mention any credit again.

qwerty456127 5y ago
AFAIK banks are legally required to open checking accounts on demand of any resident in Germany, no matter their background. But I am not sure, just a rumor.
- deleted 5y ago
  [deleted]
- gyulai 5y ago
  Not just a rumor. If you speak the right incantations at the counter, invoking the relevant legal reference, a bank in Germay will be obliged to give you a "basic bank account" with no credit facilities of any kind. There's also nothing stopping them from making that bank account the least attractive bank account you've ever heard of by charging insanely high fees and prohibiting you from using the regular ATM network, restricting you to just a few machines in a restricted geographical area.
  - qwerty456127 5y ago
    > If you speak the right incantations at the counter, invoking the relevant legal reference What are these? > There's also nothing stopping them from making that bank account the least attractive bank account you've ever heard of Why would they want to? What do they actually risk? > restricting you to just a few machines in a restricted geographical area. Officially area-specific or just through the specific kind of machines accepting specific kind of cards being absent outside of it? I've heard of the unreasonably complicated system of types of cards in Germany: normal debit, "electronic cash" etc.
    - hectormalot 5y ago
      For the Netherlands. There is the concept of the 'basic bank account'. This is an agreement that safeguards that everyone can have at least 1 bank account. [1] You can't open an account like this if you already have an account. You can't pick the bank either. You're obliged to go to your last bank for this type of account. The price is fixed at the same level as the normal accounts. You can even have this account if you're homeless and don't have an address. Typical requests are done via support organisations rather than yourself, but it is is possible to do it yourself as well. At least in the Dutch situation I don't see them introducing deliberately unattractive pricing or conditions once you have the bank account. There is a burden to open one though. That said, I don't think bankruptcy would usually result in being account-less. More likely, you can't get a credit card, mortgage or other consumer loans, which can be inconvenient. Personal bankruptcy (as opposed to an LLC imploding) also likely means a few years of handing over all your income above minimum wage to the government in exchange for nullifying your outstanding debt. (Note that the Netherlands mostly runs on debit cards, and that most people don't have a credit card). [1]: https://www.basisbankrekening.nl https://www.basisbankrekening.nl
    - gyulai 5y ago
      > > If you speak the right incantations at the counter, invoking the relevant legal reference > What are these? "Basiskonto nach § 31 Zahlungskontengesetz" [1], and tell them that you are aware that the regulator BaFin has a specific process in place for complaints about banks who refuse an application for a basic account [2] > > There's also nothing stopping them from making that bank account the least attractive bank account you've ever heard of > Why would they want to? What do they actually risk? My theory is that it has to do with outdated technology in the German banking sector that implies that it's actually impossible for them to make absolutely sure through technology that your account can't end up in overdraft. > > restricting you to just a few machines in a restricted geographical area. > Officially area-specific or just through the specific kind of machines accepting specific kind of cards being absent outside of it? I've heard of the unreasonably complicated system of types of cards in Germany: normal debit, "electronic cash" etc. The reasons are a bit difficult. In Germany there is the "Sparkasse", which is a network of small banks local to municipalities and where the municipalities have large ownership stakes (so it's weirdly-state-owned). They are legally separate but share a backoffice. Last time I did research on this the situation was this: The Sparkasse-network has more than twice as many ATM-machines than all the other banks (like Commerzbank, Deutsche Bank, foreign banks) combined. A normal bank account at one of the branches of Sparkasse will give you access to their whole network. But a basic bank account will only give you access to the ATM machines by that specific branch, which ends up being highly restrictive geographically. If you get a normal bank account from, say, Commerzbank, you can use the entire network of non-Sparkasse-ATMs, i.e. use all Commerzbank-machines countrywide, plus all Deutsche Bank machines, etc. But if you get a basic account, they'll restrict you to just the machines by Commerzbank, which are few and far between, but, at least that would give you some semblance of country-wide coverage. ...long story short, life really sucks with a basic bank account, even if you don't want/need credit. [1] http://www.gesetze-im-internet.de/zkg/ZKG.pdf http://www.gesetze-im-internet.de/zkg/ZKG.pdf [2] https://www.bafin.de/SharedDocs/Downloads/DE/Formular/dl_fo_basiskonto_antrag_verwaltungsverfahren.html?nn=7906374 https://www.bafin.de/SharedDocs/Downloads/DE/Formular/dl_fo_...
  - deleted 5y ago
    [deleted]
- Cthulhu_ 5y ago
  That's what I'm thinking; you can't pay bills or receive wages without a bank account. But I can see not being able to get any credit though, if the European or country-local equivalent of a credit score is not good enough.
  - qwerty456127 5y ago
    Do start-ups actually use bank loans? I thought they mostly are funded by private investors who take risks more practically.
oblio 5y ago
> You wouldn't even be able to open a checking account, never mention any credit again. Is this just hearsay? It seems extreme, even for French levels of bureaucracy.
- aardshark 5y ago
  I'm fairly sure you have the right to a bank account under French law, but banks have the right to refuse you as a client. This means that if you get rejected as a client by enough banks you can go to the Banque de France and they will select a bank that is then obligated to provide you with an account.
  - oblio 5y ago
    I don't get why they'd refuse you a checking account, even if you were the founder or one (or several bankrupt) companies. Would they be worried you wouldn't pay their crummy fees? :-)
    - p4bl0 5y ago
      In practice they don't. The comment to which you reply is 100% correct.
- maeln 5y ago
  I think he is confusing "interdit bancaire" and bankruptcy. If you end up being put in the interdit bancaire file, yeah life pretty much sucks and most bank will refuse to do business with you. But having a company that go bankrupt doesn't mean you will be put in the file. You usually need to do things like stop paying your loan to be put on this file.
  - lrem 5y ago
    I likely am. The idea to try a startup in France was very short lived for me. Every card was stacked against me (many particuarly against me/my ideas, not everything is a reflection on society), so I moved on after just a few conversations.
StreamBright 5y ago
Exactly. If you live in a safe and secured society why would you want to do something risky like creating a startup. One of the biggest success for the EU startup scene was just copying what is done in California, avoiding the risk of trying out new ideas. On the top of that, regulation in the EU is much worse than in the US. This does not help either.
- CrLf 5y ago
  "If you live in a safe and secured society why would you want to do something risky like creating a startup." Isn't that just another way of saying "quality of life"?
  - StreamBright 5y ago
    Depends what you are looking for. If you are in your 20s / 30s you might want to have higher salary and less social safety. Later in your life this changes. Many Europeans (including myself) went to work in California for higher wages and less taxation. Some of us wanted to have family and moved back. Quality of life is subjective above a certain threshold.
- RobertoG 5y ago
  It seems to me that this article is saying exactly the opposite of what you say. The article is about how Europeans, that live in that "safe and secured society", are creating more startups than before. >>"On the top of that, regulation in the EU is much worse than in the US. This does not help either. " If you check those start-ups you can see that most of them are joining Y-combinator but they stay in Europe. So, also the opposite of what you are implying.
  - StreamBright 5y ago
    >> "safe and secured society" What is the distribution of Eastern vs Western Europeans in the sample?
    - 5y ago
awelkie 5y ago
There was an article on this in The Economist recently. Apparently what you're describing is no longer the case. https://www.economist.com/business/2021/08/14/one-way-to-make-europe-more-like-silicon-valley https://www.economist.com/business/2021/08/14/one-way-to-mak...
- gyulai 5y ago
  It's a pretty regular occurrence for the political PR machinery to try to get stories published that basically say that (thanks to some politician's doing) European region X is now going to be the next silicon valley. ...none of that ever actually filters through to the daily realities of a European entrepreneur. ...omg, the war stories I could tell, being an E.U. entrepreneur who was dumb enough for large stretches of time to believe the hype.
Grustaf 5y ago
I don't think this is the case, in France or anywhere. And I'm certain it's not the reason SV creates more startups. The real reason is that this is where startups were invented, so for historical reasons the concentration of capital and talent is extremely high.
- quietbritishjim 5y ago
  > SV ... is where startups were invented What exactly do you think "startup" means? To me, the word just means a new small business. Such things have been around for centuries, before the USA even existed never mind SV. That's true even if you take startup to mean specifically those taking large outside capital with a goal to grow large quickly (which I don't think is necessary, a bootstrapped startup is still a startup IMO).
  - Grustaf 5y ago
    If you take it to mean "new small business" then there is no lack of startups in Europe, or Bangladesh for that matter. I'm using the word in the Paul Graham sense, new companies that aim for really fast growth. And yeah, that also sort of existed before SV but I think you actually know what I mean.
    - deleted 5y ago
      [deleted]
antupis 5y ago
I think it is set of different problems Southern Europe and France are almost hostile to entrepreneurship and startups. Nordics, Baltic and Benelux countries mostly nail culture and regulatory frameworks but small markets slows down starting and scaling business. Personally I don't know what is problem with Germany probably something to do with how German is organised around manufacturing.
- mytailorisrich 5y ago
  In my experience the UK has a very simple and friendly system and, I believe, London has grown into an European centre for startups and funding. France makes things overly-complicated and costly for the sake of it, not just for entrepreneurs but for everyone, this is very puzzling (and I was born there!).
  - antupis 5y ago
    Yeah did not add UK because Brexit but I agree that UK and especially London is best location to start startup in Europe.
    - mod50ack 5y ago
      Wonder how Ireland will be affected due to their status as an English-speaking country with major business operations already there that's uniquely able to hire effortlessly from both the UK and EU.

by lrem 5y ago

qwerty456127 5y ago

AFAIK banks are legally required to open checking accounts on demand of any resident in Germany, no matter their background. But I am not sure, just a rumor.

deleted 5y ago
[deleted]
gyulai 5y ago
Not just a rumor. If you speak the right incantations at the counter, invoking the relevant legal reference, a bank in Germay will be obliged to give you a "basic bank account" with no credit facilities of any kind. There's also nothing stopping them from making that bank account the least attractive bank account you've ever heard of by charging insanely high fees and prohibiting you from using the regular ATM network, restricting you to just a few machines in a restricted geographical area.
- qwerty456127 5y ago
  > If you speak the right incantations at the counter, invoking the relevant legal reference What are these? > There's also nothing stopping them from making that bank account the least attractive bank account you've ever heard of Why would they want to? What do they actually risk? > restricting you to just a few machines in a restricted geographical area. Officially area-specific or just through the specific kind of machines accepting specific kind of cards being absent outside of it? I've heard of the unreasonably complicated system of types of cards in Germany: normal debit, "electronic cash" etc.
  - hectormalot 5y ago
    For the Netherlands. There is the concept of the 'basic bank account'. This is an agreement that safeguards that everyone can have at least 1 bank account. [1] You can't open an account like this if you already have an account. You can't pick the bank either. You're obliged to go to your last bank for this type of account. The price is fixed at the same level as the normal accounts. You can even have this account if you're homeless and don't have an address. Typical requests are done via support organisations rather than yourself, but it is is possible to do it yourself as well. At least in the Dutch situation I don't see them introducing deliberately unattractive pricing or conditions once you have the bank account. There is a burden to open one though. That said, I don't think bankruptcy would usually result in being account-less. More likely, you can't get a credit card, mortgage or other consumer loans, which can be inconvenient. Personal bankruptcy (as opposed to an LLC imploding) also likely means a few years of handing over all your income above minimum wage to the government in exchange for nullifying your outstanding debt. (Note that the Netherlands mostly runs on debit cards, and that most people don't have a credit card). [1]: https://www.basisbankrekening.nl https://www.basisbankrekening.nl
  - gyulai 5y ago
    > > If you speak the right incantations at the counter, invoking the relevant legal reference > What are these? "Basiskonto nach § 31 Zahlungskontengesetz" [1], and tell them that you are aware that the regulator BaFin has a specific process in place for complaints about banks who refuse an application for a basic account [2] > > There's also nothing stopping them from making that bank account the least attractive bank account you've ever heard of > Why would they want to? What do they actually risk? My theory is that it has to do with outdated technology in the German banking sector that implies that it's actually impossible for them to make absolutely sure through technology that your account can't end up in overdraft. > > restricting you to just a few machines in a restricted geographical area. > Officially area-specific or just through the specific kind of machines accepting specific kind of cards being absent outside of it? I've heard of the unreasonably complicated system of types of cards in Germany: normal debit, "electronic cash" etc. The reasons are a bit difficult. In Germany there is the "Sparkasse", which is a network of small banks local to municipalities and where the municipalities have large ownership stakes (so it's weirdly-state-owned). They are legally separate but share a backoffice. Last time I did research on this the situation was this: The Sparkasse-network has more than twice as many ATM-machines than all the other banks (like Commerzbank, Deutsche Bank, foreign banks) combined. A normal bank account at one of the branches of Sparkasse will give you access to their whole network. But a basic bank account will only give you access to the ATM machines by that specific branch, which ends up being highly restrictive geographically. If you get a normal bank account from, say, Commerzbank, you can use the entire network of non-Sparkasse-ATMs, i.e. use all Commerzbank-machines countrywide, plus all Deutsche Bank machines, etc. But if you get a basic account, they'll restrict you to just the machines by Commerzbank, which are few and far between, but, at least that would give you some semblance of country-wide coverage. ...long story short, life really sucks with a basic bank account, even if you don't want/need credit. [1] http://www.gesetze-im-internet.de/zkg/ZKG.pdf http://www.gesetze-im-internet.de/zkg/ZKG.pdf [2] https://www.bafin.de/SharedDocs/Downloads/DE/Formular/dl_fo_basiskonto_antrag_verwaltungsverfahren.html?nn=7906374 https://www.bafin.de/SharedDocs/Downloads/DE/Formular/dl_fo_...
- deleted 5y ago
  [deleted]
Cthulhu_ 5y ago
That's what I'm thinking; you can't pay bills or receive wages without a bank account. But I can see not being able to get any credit though, if the European or country-local equivalent of a credit score is not good enough.
- qwerty456127 5y ago
  Do start-ups actually use bank loans? I thought they mostly are funded by private investors who take risks more practically.

oblio 5y ago

> You wouldn't even be able to open a checking account, never mention any credit again. Is this just hearsay? It seems extreme, even for French levels of bureaucracy.

aardshark 5y ago
I'm fairly sure you have the right to a bank account under French law, but banks have the right to refuse you as a client. This means that if you get rejected as a client by enough banks you can go to the Banque de France and they will select a bank that is then obligated to provide you with an account.
- oblio 5y ago
  I don't get why they'd refuse you a checking account, even if you were the founder or one (or several bankrupt) companies. Would they be worried you wouldn't pay their crummy fees? :-)
  - p4bl0 5y ago
    In practice they don't. The comment to which you reply is 100% correct.
maeln 5y ago
I think he is confusing "interdit bancaire" and bankruptcy. If you end up being put in the interdit bancaire file, yeah life pretty much sucks and most bank will refuse to do business with you. But having a company that go bankrupt doesn't mean you will be put in the file. You usually need to do things like stop paying your loan to be put on this file.
- lrem 5y ago
  I likely am. The idea to try a startup in France was very short lived for me. Every card was stacked against me (many particuarly against me/my ideas, not everything is a reflection on society), so I moved on after just a few conversations.

StreamBright 5y ago

Exactly. If you live in a safe and secured society why would you want to do something risky like creating a startup. One of the biggest success for the EU startup scene was just copying what is done in California, avoiding the risk of trying out new ideas. On the top of that, regulation in the EU is much worse than in the US. This does not help either.

CrLf 5y ago
"If you live in a safe and secured society why would you want to do something risky like creating a startup." Isn't that just another way of saying "quality of life"?
- StreamBright 5y ago
  Depends what you are looking for. If you are in your 20s / 30s you might want to have higher salary and less social safety. Later in your life this changes. Many Europeans (including myself) went to work in California for higher wages and less taxation. Some of us wanted to have family and moved back. Quality of life is subjective above a certain threshold.
RobertoG 5y ago
It seems to me that this article is saying exactly the opposite of what you say. The article is about how Europeans, that live in that "safe and secured society", are creating more startups than before. >>"On the top of that, regulation in the EU is much worse than in the US. This does not help either. " If you check those start-ups you can see that most of them are joining Y-combinator but they stay in Europe. So, also the opposite of what you are implying.
- StreamBright 5y ago
  >> "safe and secured society" What is the distribution of Eastern vs Western Europeans in the sample?
  - 5y ago

awelkie 5y ago

There was an article on this in The Economist recently. Apparently what you're describing is no longer the case. https://www.economist.com/business/2021/08/14/one-way-to-make-europe-more-like-silicon-valley https://www.economist.com/business/2021/08/14/one-way-to-mak...

gyulai 5y ago
It's a pretty regular occurrence for the political PR machinery to try to get stories published that basically say that (thanks to some politician's doing) European region X is now going to be the next silicon valley. ...none of that ever actually filters through to the daily realities of a European entrepreneur. ...omg, the war stories I could tell, being an E.U. entrepreneur who was dumb enough for large stretches of time to believe the hype.

Grustaf 5y ago

I don't think this is the case, in France or anywhere. And I'm certain it's not the reason SV creates more startups. The real reason is that this is where startups were invented, so for historical reasons the concentration of capital and talent is extremely high.

quietbritishjim 5y ago
> SV ... is where startups were invented What exactly do you think "startup" means? To me, the word just means a new small business. Such things have been around for centuries, before the USA even existed never mind SV. That's true even if you take startup to mean specifically those taking large outside capital with a goal to grow large quickly (which I don't think is necessary, a bootstrapped startup is still a startup IMO).
- Grustaf 5y ago
  If you take it to mean "new small business" then there is no lack of startups in Europe, or Bangladesh for that matter. I'm using the word in the Paul Graham sense, new companies that aim for really fast growth. And yeah, that also sort of existed before SV but I think you actually know what I mean.
  - deleted 5y ago
    [deleted]

antupis 5y ago

I think it is set of different problems Southern Europe and France are almost hostile to entrepreneurship and startups. Nordics, Baltic and Benelux countries mostly nail culture and regulatory frameworks but small markets slows down starting and scaling business. Personally I don't know what is problem with Germany probably something to do with how German is organised around manufacturing.

mytailorisrich 5y ago
In my experience the UK has a very simple and friendly system and, I believe, London has grown into an European centre for startups and funding. France makes things overly-complicated and costly for the sake of it, not just for entrepreneurs but for everyone, this is very puzzling (and I was born there!).
- antupis 5y ago
  Yeah did not add UK because Brexit but I agree that UK and especially London is best location to start startup in Europe.
  - mod50ack 5y ago
    Wonder how Ireland will be affected due to their status as an English-speaking country with major business operations already there that's uniquely able to hire effortlessly from both the UK and EU.