3 ms·

What are the conditions regarding creating and running a modern tech company in France, Germany, Spain, Italy in comparison with California - or Delaware? I me

by avmich 3y ago

What are the conditions regarding creating and running a modern tech company in France, Germany, Spain, Italy in comparison with California - or Delaware? I mean, if European society - and particularly European governments, as "conscious" agents of that - wants to have better startup results, do they make it's easier to achieve from their side, do they see any problems with European modern approach which they can improve?

csomar 3y ago
Europe is not less competitive. US companies/startups just happen to have more capital and also network effects (lots of tech companies are already there).
- avmich 3y ago
  I've heard some opinions about technicalities for small young companies which are easier in California than in Europe. Capital and networking are important, but it's something which changes slower, and some efforts could be put towards improving the regulatory environment.
- nxm 3y ago
  But it is - a few examples: - bankruptcy laws in the US encourage more risk taking by not financially punishing founders/investors in case of failure - more dynamic labor market… hire fast but also fire fast if required - less of a work/life balance culture - fewer government regulations
  - NoZZz 3y ago
    This. Many banks as a condition of giving out a loan require a house as collateral. A house that's underwater also tacks a debt to your personal name for instance.
    - jjeaff 3y ago
      Very few tech startups are working with bank loans. Banks in the US will almost never loan to a new business without a personal guarantee and collateral.
  - csomar 3y ago
    Most of the tech is concentrated in California. If this was about regulation/labor market, it would have happened some place else in the US. That was not the case. Regarding taxes/gov. regulations, the US also has its own share of crazy. I don't think all of these elements matter much (otherwise Estonia and Malta would be the tech hubs of Europe).
    - pfannkuchen 3y ago
      I believe California was much less regulated as you go back in time. Once a hotspot has started it might persist even into conditions that would have choked it early on.
- 847448rr 3y ago
  Investors don't care where you are as long as they're confident you match a certain risk/reward profile. If they're piling money into US and US-acquired companies it implies expectations are lower for the European counterparts. The most emblematic trend in recent times to signal this is how Europe has had to focus on legislating ai to seem remotely relevant while the US and China dominate actual innovation in the field. If that's not admittance that the industry is uncompetitive I don't know what is.
PeterStuer 3y ago
It is not a tech problem, not a culture ptoblem, but a monetary one. Reserve currency status and the petrodollar gives the US accrss to unlimited consequence free cash. This is why they can just treat the EU as a free research lab and buy up every promising result.
- junofan 3y ago
  I thought there was a big compliance burden with AIFMD. The money’s often in the Caymans. I could be way off.
- zaptheimpaler 3y ago
  Yet China or India have tons of startups without reserve currency status.
- TheLoafOfBread 3y ago
  From my perspective as European, it is big taxes, lot of bureaucracy and sane investors (compared to VC from Silicon Valley).
- amadeuspagel 3y ago
  There are many recent non-american consumer tech companies like TikTok and Telegram. It's not just that the US is a unique success in tech, it's also that the EU is a unique failure and that cannot be explained with the dollar's reserve currency status.
- AniseAbyss 3y ago
  [dead]
simne 3y ago
In Europe is much more bureaucracy, and much more welfare economy, and in US is more free market. This is exact reason for European entrepreneurs, to start business in Europe, because easier to gather smart people, but, at some scale, become much more convenient to run business in US, so an some growth step, business owners have to consider US more freedom against strict EU regulations.
janosdebugs 3y ago
Austria here. Relatively high corporate taxes (25% on corporate profits, then 27% on distributed profits to shareholders if I remember correctly), and it's hard to give employees shares. The latter they are trying to fix now by adding a new company type called a FlexCorp which essentially works like a GmbH, but you can give out up to 25% of non-voting shares to employees in a simplified process. I don't know how attractive that is, it sounds dumb to me because I don't understand why they can't be normal shares and your company will be named Example FlexCorp instead if Example GmbH. (Doesn't sound shady at all.) On the funding side, we have the Austria Wirtschaftsfond, which provides angel-level funding on some level, but the amounts are relatively low and there are restrictions what the money can be spent on. (E.g. only employees, which shareholder-CEOs are not in all circumstances, etc.) Basically, it's tricky and a jungle to navigate. I have never done a US startup, but from what I saw it seemed less intricate. On the flipside, my wife and I have a GmbH and since we got over the initial unknowns, it seem relatively straight forward to actually run the company on a day-to-day basis, provided one actually makes money.

by avmich 3y ago

csomar 3y ago

Europe is not less competitive. US companies/startups just happen to have more capital and also network effects (lots of tech companies are already there).

avmich 3y ago
I've heard some opinions about technicalities for small young companies which are easier in California than in Europe. Capital and networking are important, but it's something which changes slower, and some efforts could be put towards improving the regulatory environment.
nxm 3y ago
But it is - a few examples: - bankruptcy laws in the US encourage more risk taking by not financially punishing founders/investors in case of failure - more dynamic labor market… hire fast but also fire fast if required - less of a work/life balance culture - fewer government regulations
- NoZZz 3y ago
  This. Many banks as a condition of giving out a loan require a house as collateral. A house that's underwater also tacks a debt to your personal name for instance.
  - jjeaff 3y ago
    Very few tech startups are working with bank loans. Banks in the US will almost never loan to a new business without a personal guarantee and collateral.
- csomar 3y ago
  Most of the tech is concentrated in California. If this was about regulation/labor market, it would have happened some place else in the US. That was not the case. Regarding taxes/gov. regulations, the US also has its own share of crazy. I don't think all of these elements matter much (otherwise Estonia and Malta would be the tech hubs of Europe).
  - pfannkuchen 3y ago
    I believe California was much less regulated as you go back in time. Once a hotspot has started it might persist even into conditions that would have choked it early on.
847448rr 3y ago
Investors don't care where you are as long as they're confident you match a certain risk/reward profile. If they're piling money into US and US-acquired companies it implies expectations are lower for the European counterparts. The most emblematic trend in recent times to signal this is how Europe has had to focus on legislating ai to seem remotely relevant while the US and China dominate actual innovation in the field. If that's not admittance that the industry is uncompetitive I don't know what is.

PeterStuer 3y ago

It is not a tech problem, not a culture ptoblem, but a monetary one. Reserve currency status and the petrodollar gives the US accrss to unlimited consequence free cash. This is why they can just treat the EU as a free research lab and buy up every promising result.

junofan 3y ago
I thought there was a big compliance burden with AIFMD. The money’s often in the Caymans. I could be way off.
zaptheimpaler 3y ago
Yet China or India have tons of startups without reserve currency status.
TheLoafOfBread 3y ago
From my perspective as European, it is big taxes, lot of bureaucracy and sane investors (compared to VC from Silicon Valley).
amadeuspagel 3y ago
There are many recent non-american consumer tech companies like TikTok and Telegram. It's not just that the US is a unique success in tech, it's also that the EU is a unique failure and that cannot be explained with the dollar's reserve currency status.
AniseAbyss 3y ago
[dead]

simne 3y ago

In Europe is much more bureaucracy, and much more welfare economy, and in US is more free market. This is exact reason for European entrepreneurs, to start business in Europe, because easier to gather smart people, but, at some scale, become much more convenient to run business in US, so an some growth step, business owners have to consider US more freedom against strict EU regulations.

janosdebugs 3y ago

Austria here. Relatively high corporate taxes (25% on corporate profits, then 27% on distributed profits to shareholders if I remember correctly), and it's hard to give employees shares. The latter they are trying to fix now by adding a new company type called a FlexCorp which essentially works like a GmbH, but you can give out up to 25% of non-voting shares to employees in a simplified process. I don't know how attractive that is, it sounds dumb to me because I don't understand why they can't be normal shares and your company will be named Example FlexCorp instead if Example GmbH. (Doesn't sound shady at all.) On the funding side, we have the Austria Wirtschaftsfond, which provides angel-level funding on some level, but the amounts are relatively low and there are restrictions what the money can be spent on. (E.g. only employees, which shareholder-CEOs are not in all circumstances, etc.) Basically, it's tricky and a jungle to navigate. I have never done a US startup, but from what I saw it seemed less intricate. On the flipside, my wife and I have a GmbH and since we got over the initial unknowns, it seem relatively straight forward to actually run the company on a day-to-day basis, provided one actually makes money.