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> It is a wealth-sharing problem as well. The reality is that it's just not possible to start these kinds of Unicorn companies anywhere except in the USA. The

> It is a wealth-sharing problem as well. The reality is that it's just not possible to start these kinds of Unicorn companies anywhere except in the USA. The EU's extreme policies contribute to an overwhelming burden of tax and employment regulations, which results in risk-averseness. So entrepreneurial Europeans go to USA to start their company.

wbsss4412 4y ago
That thesis is hard to square with the fact that it’s not that these unicorns are started in the US, it’s that they are almost all started in one metropolitan area. The distinguishing factors here aren’t simply European regulations and taxes.
- VWWHFSfQ 4y ago
  It's a matter of locality sure. But also access. SF and NYC have easy access to startup incubators and venture capital. Do you have a great idea and looking for an angel to give it a chance? You'll probably find it in New York or San Francisco. Pretty unlikely in Munich or Paris.
  - jhugo 4y ago
    I realise it's maybe clear from the context of the thread, but it's worth reiterating that this is only true for unicorn-scale. There is plenty of startup capital available for good ideas in both Paris and Munich as well as many other European cities, they are just unlikely to breed unicorns.
    - tluyben2 4y ago
      I think this is important; I am in a bunch of startup hubs in the eu/uk as technical validator and tech expert and over the last 10 years of doing that, I haven’t heard 1 team that wanted to go for unicorn growth. There is money enough here for a healthy, profit making company; just generally (Revolut as counter example) not for burning a few 100m$ to become a (loss making) unicorn.
    - greenhorn123 4y ago
      And if perchance they do some US company will buy them.
  - randomsearch 4y ago
    It’s a cultural difference not regulation, at least according to every VC and mentor I’ve ever met who has worked in both the US and Europe. I know of American VCs who have been just as ambitious investing with U.K. startups as with American ones.
- beaned 4y ago
  There might be a bit of observational bias here (better technical term?). HN is overwhelmingly about the tech industry, but most US companies are started outside of SF/California.
  - wbsss4412 4y ago
    Most are started outside of California, yes, but there are plenty of large scale companies in the EU too. So unless we are limiting the discussion to large scale tech companies of the sort that are predominately in the Bay Area, the discussion just isn’t congruent.
- bogomipz 4y ago
  Yes but that concentration in the Bay area has historically been because of its proximity to Sand Hill Road no? Or am I misunderstanding your point?
  - wbsss4412 4y ago
    Well that’s basically is my point. The thesis I was responding to was that tech unicorns don’t exist in Europe due to taxes and regulations. If we are to take the content of your post at face value, that thesis is wrong. It was due to sand hill road being where sand hill road is. That may have something to do with taxes and regulations to a degree, but that isn’t a sufficient explanation.
    - fsckboy 4y ago
      taxes and regulations could be a sufficient explanation for why unicorns are birthed in the US. and within the US, "why SV?" might simply have another orthogonal explanation.
      - tsimionescu 4y ago
        > taxes and regulations could be a sufficient explanation for why unicorns are birthed in the US. If that were the case, you would have to see unicorns in Delaware and Texas and many other places in the US, especially since many of these have a much more lax tax regime than California or New York. The fact that unicorns are almost exclusively bred in two cities in the US actually suggests that the influence of the tax and employment regimes is overwhelmingly dwarfed by other factors.
pbreit 4y ago
Checkout.com, Klarna, Revolut, Transferwise, Mollie, Deliveroo, Spotify, Hopin, Trustly.
- VWWHFSfQ 4y ago
  > Checkout.com, Klarna, Revolut, Transferwise, Mollie, Deliveroo, Spotify, Hopin, Trustly. No offense to Europeans, but I've only heard of Spotify.
  - aiisjustanif 4y ago
    Not hearing about Klarna and Deliveroo is surprising. Klarna is everywhere I turn in the US.
    - ricardonunez 4y ago
      Transferwise/wise too. I use it to pay employees in Europe. I remember going to Clearwater and seeing their logo on i4 all the time. It is a known company. Revolut also known but still doesn’t work well for US costumers.
    - nickstinemates 4y ago
      Klarna is like a layaway program? I'm like the GP never heard of these companies other than Spotify and the Klarna website isn't very helpful
      - cmckn 4y ago
        It’s kind of like a payday loan type of micro-lending that integrates with merchants similarly to PayPal. I’ve never understood the appeal, it feels super predatory. But most creditors do, I guess. I first heard of it a few years ago when they did a huge ad campaign with a lot of the popular queens from RuPaul’s Drag Race.
        pbreit 4y ago
        It’s frequently way less predatory: merchants pays the finance charges and payoff time is much shorter.

wbsss4412 4y ago

That thesis is hard to square with the fact that it’s not that these unicorns are started in the US, it’s that they are almost all started in one metropolitan area. The distinguishing factors here aren’t simply European regulations and taxes.

VWWHFSfQ 4y ago
It's a matter of locality sure. But also access. SF and NYC have easy access to startup incubators and venture capital. Do you have a great idea and looking for an angel to give it a chance? You'll probably find it in New York or San Francisco. Pretty unlikely in Munich or Paris.
- jhugo 4y ago
  I realise it's maybe clear from the context of the thread, but it's worth reiterating that this is only true for unicorn-scale. There is plenty of startup capital available for good ideas in both Paris and Munich as well as many other European cities, they are just unlikely to breed unicorns.
  - tluyben2 4y ago
    I think this is important; I am in a bunch of startup hubs in the eu/uk as technical validator and tech expert and over the last 10 years of doing that, I haven’t heard 1 team that wanted to go for unicorn growth. There is money enough here for a healthy, profit making company; just generally (Revolut as counter example) not for burning a few 100m$ to become a (loss making) unicorn.
  - greenhorn123 4y ago
    And if perchance they do some US company will buy them.
- randomsearch 4y ago
  It’s a cultural difference not regulation, at least according to every VC and mentor I’ve ever met who has worked in both the US and Europe. I know of American VCs who have been just as ambitious investing with U.K. startups as with American ones.
beaned 4y ago
There might be a bit of observational bias here (better technical term?). HN is overwhelmingly about the tech industry, but most US companies are started outside of SF/California.
- wbsss4412 4y ago
  Most are started outside of California, yes, but there are plenty of large scale companies in the EU too. So unless we are limiting the discussion to large scale tech companies of the sort that are predominately in the Bay Area, the discussion just isn’t congruent.
bogomipz 4y ago
Yes but that concentration in the Bay area has historically been because of its proximity to Sand Hill Road no? Or am I misunderstanding your point?
- wbsss4412 4y ago
  Well that’s basically is my point. The thesis I was responding to was that tech unicorns don’t exist in Europe due to taxes and regulations. If we are to take the content of your post at face value, that thesis is wrong. It was due to sand hill road being where sand hill road is. That may have something to do with taxes and regulations to a degree, but that isn’t a sufficient explanation.
  - fsckboy 4y ago
    taxes and regulations could be a sufficient explanation for why unicorns are birthed in the US. and within the US, "why SV?" might simply have another orthogonal explanation.
    - tsimionescu 4y ago
      > taxes and regulations could be a sufficient explanation for why unicorns are birthed in the US. If that were the case, you would have to see unicorns in Delaware and Texas and many other places in the US, especially since many of these have a much more lax tax regime than California or New York. The fact that unicorns are almost exclusively bred in two cities in the US actually suggests that the influence of the tax and employment regimes is overwhelmingly dwarfed by other factors.

pbreit 4y ago

Checkout.com, Klarna, Revolut, Transferwise, Mollie, Deliveroo, Spotify, Hopin, Trustly.

VWWHFSfQ 4y ago
> Checkout.com, Klarna, Revolut, Transferwise, Mollie, Deliveroo, Spotify, Hopin, Trustly. No offense to Europeans, but I've only heard of Spotify.
- aiisjustanif 4y ago
  Not hearing about Klarna and Deliveroo is surprising. Klarna is everywhere I turn in the US.
  - ricardonunez 4y ago
    Transferwise/wise too. I use it to pay employees in Europe. I remember going to Clearwater and seeing their logo on i4 all the time. It is a known company. Revolut also known but still doesn’t work well for US costumers.
  - nickstinemates 4y ago
    Klarna is like a layaway program? I'm like the GP never heard of these companies other than Spotify and the Klarna website isn't very helpful
    - cmckn 4y ago
      It’s kind of like a payday loan type of micro-lending that integrates with merchants similarly to PayPal. I’ve never understood the appeal, it feels super predatory. But most creditors do, I guess. I first heard of it a few years ago when they did a huge ad campaign with a lot of the popular queens from RuPaul’s Drag Race.
      - pbreit 4y ago
        It’s frequently way less predatory: merchants pays the finance charges and payoff time is much shorter.