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There is a lot of discussion here trashing EU programs for startups and not a lot of specific details, which is disappointing. I will try to provide a more subs

There is a lot of discussion here trashing EU programs for startups and not a lot of specific details, which is disappointing. I will try to provide a more substantive critique. My personal experience, having been involved with many startups in both the EU and US, is that EU government funding is completely useless for almost all startups. Why? First of all, you have to be part of the existing networks. If your business does not have university affiliations with people that get existing grants, or connections to EU bureaucracy, then you can forget about getting a dime. Then there is the risk aspect: if you are doing anything even remotely novel, or with any amount of risk, forget about it. This is not just my opinion, Mario Draghi, previous president of the ECB and Italian PM, said that the EU does not take enough risk to produce real innovation. And finally there's the timelines: from researching funding to cash in your bank account is always measured in years. So, my expectation is that these funds will be distributed to members of the bureaucratic class and their network, for low-risk, low-reward projects, on a timescale too slow for most startups. I hope to be proven wrong, but the results of previous decades of EU funding programs do not make me optimistic.

NooneAtAll3 1y ago
...so it's corruption with extra steps?
- ithkuil 1y ago
  It's a weird kind of corruption where the most diligent and patient and boring wins
- arlort 1y ago
  No, it's the result of the public's/politicians' pathologic risk aversion and swiftness in calling everything corruption Since it'd be obviously bad (sarcasm) if public money were spent on projects that deliver nothing or the people receiving them used them for anything other than the narrowest interpretation of the goal then you absolutely (sarcasm^2) have to have 50 different layers of checks and plans and assessment to make sure the little money is spent on the entities that lie the best. But at least no opposition politician can complain someone bought a fancier watch than they'd like or didn't deliver enough Anyway the EIB is a different kind of funding process than EU grants and should be more effective (even just because capital doesn't come out of the EU budget or member states directly), though how much I don't know
- owenversteeg 1y ago
  Personally I wouldn't call it corruption, at least not all of it. If you were to drill down into the individual grants, you would find a lot of things that are broadly useful but not revolutionary. There's 4M euros to produce a new additive for beeswax and 500k euros to research migratory snails and 6M euros to study some new roads and that sort of thing. There's certainly obvious corruption too, but it isn't the majority of grant money. Most stuff is just very boring and vaguely useful. I think a more useful description: it is an ossified structure where you have to play by the rules. Much like, say, the Catholic Church. You're not going to get a grant for your startup, or become Archbishop of Salzburg, by having an idea and sending some emails. You're going to have to fully commit yourself to the institution over a period of decades, and then you're in, and you're respected, and you can do some things, as long as they're not too revolutionary. Is that good for innovation? No. But corruption? I think it's something else.
- FjordWarden 1y ago
  Imagine a committee of 10 people granting funding to a firm to commercialise NFTs of digital fashion where the owner of the company is also a member of the committee. The company isn't even a real company but a general partnership without limited liability. Your inquiries into this affair under the public information act get stonewalled by a obscure law that where voted on as part of the budget of 2018. When members are asked about this incestuous relationship they react in an indigenous fashion saying there can not be a conflict of interest because they abstained from voting on their own project. You make some noice about this and you get ostracised. This is just one example. A dutch sociologist has coined a term for this calling it network corruption, we had to invent a word for it because it is so prevalent, there isn't even a page about this on the English language Wikipedia: https://nl.wikipedia.org/wiki/Netwerkcorruptie https://nl.wikipedia.org/wiki/Netwerkcorruptie
smokel 1y ago
> If your business does not have university affiliations with people that get existing grants, or connections to EU bureaucracy, then you can forget about getting a dime. So, then simply get in contact with your local university. It helps the university to get grants when commercial parties are involved, so this is a win-win.
- owenversteeg 1y ago
  Hah! I studied at an excellent Dutch university that's an EU funding darling and had plenty of connections. But because I had "just" a bachelor's degree from a top university, plus substantial relevant experience, nobody would take me seriously. Even with a master's, you will find most people think you are unserious in most "hard" fields. You often need a PhD. And then God help you if you choose to leave the existing ossified structures of academia and industry. And then you still run up against the issues of risk tolerance (which is zero) and long timelines. Look, the stated goal of this program is to compete with American venture capital, right? Then look at the founders who got American venture capital money. Look at how many don't even have a bachelor's! Count the number that participated in traditional structures of academia and grant-receiving corporations. Virtually none of those people would have ever gotten a dime of this money, let alone an offer to collaborate from a university.
  - hoppp 1y ago
    A lot of founders are uni dropouts in America because the money flows easily and you dont have to study in university to have skills. Its quite a stupid idea that only the most educated people can get these grants because people who excel at academia might not make it in the world of business.
  - mcv 1y ago
    Why such a crippling policy? Like you said, many successful entrepreneurs are university dropouts. For research grants, sure, go to PhDs. But if you want a tech industry, you need to cast a much wider net than that. Although there's also NLNet that hands out open source subsidies from the EU. That might be more accessible, although I also get the impression that the money is a lot less. I don't have any experience with it, though.
krick 1y ago
Skimming the comments, this is pretty much what everyone is saying. And I'm sure it's true, but I'd like to also point out the amount of money in question. What was the investment amount for that toy project of Altman? Right. I don't mean to say 70B is not a lot of money, of course it is. But perhaps that's part of the point: it's a lot of money to feed these technology partners of academia and other friends of friends you are talking about, it's also big enough to make the frontpage on HN, but when it's seen as a sudden huge investment into the whole market, it's kinda telling by itself that startups are not exactly thriving in EU. And also that money is cheap now.
baxtr 1y ago
I agree with everything except for one thing: I think their risk appetite is "u" shaped: low-risk is funded but they’d also fund insane-risk pie-in-the-sky academia dreams where many experts would immediately say that it will never work. The stuff in between with sensible risk-reward ratios will indeed be ignored.
- krick 1y ago
  > they’d also fund insane-risk pie-in-the-sky academia dreams Just out of curiosity, can you throw a couple of examples?
  - woah 1y ago
    Particle accelerators?
    - hoppp 1y ago
      Those I think serve a good purpose. We can discover the universe one atom smashed at a time. It's non-profit and would not exist without external funding. The discussion is more about businesses I think.
  - zmb_ 1y ago
    The Human Brain Project comes to mind.
  - Borg3 1y ago
    ITER and cold fussion. Its either impossible (my opinion) or far too early. ITER itself will not even produce single watt of electricity. Its PoC for net positive energy gain from cold fussion (we will see...)
    - BlueTemplar 1y ago
      ITER has nothing to do with cold fusion. And all cold fusion attempts so far ended up as scams.
- 1y ago
hoppp 1y ago
You are right. Eu has great plans but unable to fulfill them. I have been waiting for the Capital Markets Union for 11 years. THe European blockchain infrastructure? Dead because only some universities can use it. Eu is unable to fund innovation and it's not able to fund risky businesses. No VC culture either. some Scandinavian countries have a little startup culture and government sponsored grants but the tax system drives startups that serve international audience away.
loxodrome 1y ago
Wow it’s so refreshing to know that other people can see this. There is simply not enough private capital investment in Europe. The public money is inevitably passed through academic hands or other public sector bureaucrats. And it is simply an ineffective way to allocate capital. The money should be returned to private hands where it belongs and those individuals should be the ones to decide how to invest their own capital. Why do so few Europeans get this? It’s like they just can’t stand the idea of a wealthy person investing their own money.
- whatshisface 1y ago
  Instead of giving it all to a few people to spend buying real estate and mineral rights, you could tell the funding agencies that they're allowed to take risks, or give it to people's retirement accounts and let companies seek public investment.
- jampekka 1y ago
  Looking at what the billionaires are doing in US politics, perhaps there's something to this.
  - deleted 1y ago
    [deleted]
- greenavocado 1y ago
  [flagged]
  - loxodrome 1y ago
    Amen, I should frame this on my wall.
  - pembrook 1y ago
    Your description of the European intellectual climate is admittedly accurate if somewhat hyperbolic. But I think your analysis of the root causes is lacking. European humans aren't different organisms than non-european humans. Culture does not form in a vacuum. It comes from base properties of the geography and experiences of humans in the region. In my opinion, it's primarily down to 3 things: 1) Population density: Europe has 3X the population density (and subsequent urbanization) as the US. Urbanization leads to more collectivist attitudes. If you compare European attitudes to those in a high density American location like New York City, you'll be amazed how similar (in everything from religiosity to socialist economic leaning to political philosophy). It's the higher proportion of low population density areas of the US that lead to major differences in political philosophy. 2) Experience of downside risk: European risk aversion is quite easily explained by the fact they have experienced the most extreme version of downside risk imaginable in recent memory (WWII). The worst thing the US knows is a depression. Not total annihilation, fire bombing and markets going to 0. 3) Ethnocentrism: Europe's nationalist ethno-states are far less culturally diverse than the broader US. This leads to a higher capacity of empathy for strangers (because people in a mono-culture are more similar to you, you empathize with them more easily). Ironically though, this empathy is what leads to a higher percentage of GDP being driven by centralized government spending (50% in Europe vs. 30-35ish% in USA). The market is less empathetic, but ultimately more efficient and grows the overall pie faster...even accounting for the additional increase in inequality. Growth compounds exponentially, so this gets more dramatic over time. People in podunk US Midwest States now have a higher disposable income per capita (on both mean and median measures) than people in London, a place you would traditionally think of as among the richest in the world. But again, the US didn't get here because 'culture.' It got here due to design decisions made hundreds of years earlier. Being a multicultural society reveals base human racist leanings, which results in more individualist governance, which leads to a greater embrace of markets and private capital, which leads to faster growth.
PicassoCTs 1y ago
They are also milked by companies, who re-designate pre-existing works (like software projects) as "innovation" and R&D. Its basically a hidden tax-refund with loads of busy-work bureaucracy.
jopicornell 1y ago
I cofounded a startup, trying to get innovation funding and I can say this is 100% my experience. Universities don't think a Software for managing dance and culture academies is innovative, but they are in the field. That was one of the requeriments: to be certified by a university professor. That doesn't make sense: universities are research centers, but not the unique source of innovation (and in our country, not even a source in most fields). Your comment is pretty on point!
TacticalCoder 1y ago
[dead]
huqedato 1y ago
You are perfectly right! I would just add this, from my experience with Horizon 2020: we were working on an R&D project at the time. Applied for grant. We got €16,000, peanuts. (We needed a few hundred thousand....) My point is that this type of EC/EU financing is distributed in a somewhat "social-democratic" manner, under the principle of "everyone should get something". Not mentioning the bureaucratic hell we went through to apply and get the funding.
thih9 1y ago
The article addresses some of these points: > EIB President Nadia Calviño emphasizes the bank's willingness to take more risks, notably speeding up the venture capital financing process, which could be pivotal for startups in a fast-moving market > The bank aims to process startup financing applications within six months, significantly improving from the current 18-month timespan.
- alephnerd 1y ago
  That's part of the problem. 6 months is too long for an early stage venture to get capital unlocked. And this rightfully causes a lot of us to worry that this foreshadows a significant lack of domain experience in the EIB's proposal (which btw hasn't been made public yet)
ajb 1y ago
There are a lot of grants for universities because a) that's how universities are funded and b) to encourage technology transfer. But pure startup funding does exist, eg the EIC accelerator. If you want to get it there are companies like Inspiralia which specialise in navigating the process.
HenryBemis 1y ago
> will be distributed to members of the bureaucratic class and their network, for low-risk, low-reward projects a quick search at the comments (so far) yielded zero results on "data prot", "GDPR", "privacy", so let me bring those up. GDPR is a _great_ tool for civilians GDPR is a _horrible_ tool if you are a business and want to innovate, expand, 'exploit' (positively). EU money will come with E(U) DP Supervisor and the many directives. There is no way someone can do a proper DPIA and find it 'clean' if you are honestly appraising processes x GDPR. And these people are fierce nay-sayers. I've worked in banks, and I've worked in the EU. Those EU folks shit their pants when the DPOs walk in the room. Say "Legal basis" to someone working in the EU and see them cry (ok I exaggerate). US has been 'stealing' the talent from all around the planet, for decades (and good for both the US and the talents). Why would someone try hard and have regulations every step of the way, and not work for Google? Many years now I've felt that US is 30 years back in "tech" and will never catch up. US companies are dominating the space, and for every 10 steps we do in the EU, they go 10 miles, so every last year was better gap-wise. And I fear it won't change.
tclover 1y ago
Yes EU is corrupt shithole, this title means they have 70b to steal from

NooneAtAll3 1y ago

...so it's corruption with extra steps?

ithkuil 1y ago
It's a weird kind of corruption where the most diligent and patient and boring wins
arlort 1y ago
No, it's the result of the public's/politicians' pathologic risk aversion and swiftness in calling everything corruption Since it'd be obviously bad (sarcasm) if public money were spent on projects that deliver nothing or the people receiving them used them for anything other than the narrowest interpretation of the goal then you absolutely (sarcasm^2) have to have 50 different layers of checks and plans and assessment to make sure the little money is spent on the entities that lie the best. But at least no opposition politician can complain someone bought a fancier watch than they'd like or didn't deliver enough Anyway the EIB is a different kind of funding process than EU grants and should be more effective (even just because capital doesn't come out of the EU budget or member states directly), though how much I don't know
owenversteeg 1y ago
Personally I wouldn't call it corruption, at least not all of it. If you were to drill down into the individual grants, you would find a lot of things that are broadly useful but not revolutionary. There's 4M euros to produce a new additive for beeswax and 500k euros to research migratory snails and 6M euros to study some new roads and that sort of thing. There's certainly obvious corruption too, but it isn't the majority of grant money. Most stuff is just very boring and vaguely useful. I think a more useful description: it is an ossified structure where you have to play by the rules. Much like, say, the Catholic Church. You're not going to get a grant for your startup, or become Archbishop of Salzburg, by having an idea and sending some emails. You're going to have to fully commit yourself to the institution over a period of decades, and then you're in, and you're respected, and you can do some things, as long as they're not too revolutionary. Is that good for innovation? No. But corruption? I think it's something else.
FjordWarden 1y ago
Imagine a committee of 10 people granting funding to a firm to commercialise NFTs of digital fashion where the owner of the company is also a member of the committee. The company isn't even a real company but a general partnership without limited liability. Your inquiries into this affair under the public information act get stonewalled by a obscure law that where voted on as part of the budget of 2018. When members are asked about this incestuous relationship they react in an indigenous fashion saying there can not be a conflict of interest because they abstained from voting on their own project. You make some noice about this and you get ostracised. This is just one example. A dutch sociologist has coined a term for this calling it network corruption, we had to invent a word for it because it is so prevalent, there isn't even a page about this on the English language Wikipedia: https://nl.wikipedia.org/wiki/Netwerkcorruptie https://nl.wikipedia.org/wiki/Netwerkcorruptie

smokel 1y ago

> If your business does not have university affiliations with people that get existing grants, or connections to EU bureaucracy, then you can forget about getting a dime. So, then simply get in contact with your local university. It helps the university to get grants when commercial parties are involved, so this is a win-win.

owenversteeg 1y ago
Hah! I studied at an excellent Dutch university that's an EU funding darling and had plenty of connections. But because I had "just" a bachelor's degree from a top university, plus substantial relevant experience, nobody would take me seriously. Even with a master's, you will find most people think you are unserious in most "hard" fields. You often need a PhD. And then God help you if you choose to leave the existing ossified structures of academia and industry. And then you still run up against the issues of risk tolerance (which is zero) and long timelines. Look, the stated goal of this program is to compete with American venture capital, right? Then look at the founders who got American venture capital money. Look at how many don't even have a bachelor's! Count the number that participated in traditional structures of academia and grant-receiving corporations. Virtually none of those people would have ever gotten a dime of this money, let alone an offer to collaborate from a university.
- hoppp 1y ago
  A lot of founders are uni dropouts in America because the money flows easily and you dont have to study in university to have skills. Its quite a stupid idea that only the most educated people can get these grants because people who excel at academia might not make it in the world of business.
- mcv 1y ago
  Why such a crippling policy? Like you said, many successful entrepreneurs are university dropouts. For research grants, sure, go to PhDs. But if you want a tech industry, you need to cast a much wider net than that. Although there's also NLNet that hands out open source subsidies from the EU. That might be more accessible, although I also get the impression that the money is a lot less. I don't have any experience with it, though.

krick 1y ago

Skimming the comments, this is pretty much what everyone is saying. And I'm sure it's true, but I'd like to also point out the amount of money in question. What was the investment amount for that toy project of Altman? Right. I don't mean to say 70B is not a lot of money, of course it is. But perhaps that's part of the point: it's a lot of money to feed these technology partners of academia and other friends of friends you are talking about, it's also big enough to make the frontpage on HN, but when it's seen as a sudden huge investment into the whole market, it's kinda telling by itself that startups are not exactly thriving in EU. And also that money is cheap now.

baxtr 1y ago

I agree with everything except for one thing: I think their risk appetite is "u" shaped: low-risk is funded but they’d also fund insane-risk pie-in-the-sky academia dreams where many experts would immediately say that it will never work. The stuff in between with sensible risk-reward ratios will indeed be ignored.

krick 1y ago
> they’d also fund insane-risk pie-in-the-sky academia dreams Just out of curiosity, can you throw a couple of examples?
- woah 1y ago
  Particle accelerators?
  - hoppp 1y ago
    Those I think serve a good purpose. We can discover the universe one atom smashed at a time. It's non-profit and would not exist without external funding. The discussion is more about businesses I think.
- zmb_ 1y ago
  The Human Brain Project comes to mind.
- Borg3 1y ago
  ITER and cold fussion. Its either impossible (my opinion) or far too early. ITER itself will not even produce single watt of electricity. Its PoC for net positive energy gain from cold fussion (we will see...)
  - BlueTemplar 1y ago
    ITER has nothing to do with cold fusion. And all cold fusion attempts so far ended up as scams.
1y ago

hoppp 1y ago

You are right. Eu has great plans but unable to fulfill them. I have been waiting for the Capital Markets Union for 11 years. THe European blockchain infrastructure? Dead because only some universities can use it. Eu is unable to fund innovation and it's not able to fund risky businesses. No VC culture either. some Scandinavian countries have a little startup culture and government sponsored grants but the tax system drives startups that serve international audience away.

loxodrome 1y ago

Wow it’s so refreshing to know that other people can see this. There is simply not enough private capital investment in Europe. The public money is inevitably passed through academic hands or other public sector bureaucrats. And it is simply an ineffective way to allocate capital. The money should be returned to private hands where it belongs and those individuals should be the ones to decide how to invest their own capital. Why do so few Europeans get this? It’s like they just can’t stand the idea of a wealthy person investing their own money.

whatshisface 1y ago
Instead of giving it all to a few people to spend buying real estate and mineral rights, you could tell the funding agencies that they're allowed to take risks, or give it to people's retirement accounts and let companies seek public investment.
jampekka 1y ago
Looking at what the billionaires are doing in US politics, perhaps there's something to this.
- deleted 1y ago
  [deleted]
greenavocado 1y ago
[flagged]
- loxodrome 1y ago
  Amen, I should frame this on my wall.
- pembrook 1y ago
  Your description of the European intellectual climate is admittedly accurate if somewhat hyperbolic. But I think your analysis of the root causes is lacking. European humans aren't different organisms than non-european humans. Culture does not form in a vacuum. It comes from base properties of the geography and experiences of humans in the region. In my opinion, it's primarily down to 3 things: 1) Population density: Europe has 3X the population density (and subsequent urbanization) as the US. Urbanization leads to more collectivist attitudes. If you compare European attitudes to those in a high density American location like New York City, you'll be amazed how similar (in everything from religiosity to socialist economic leaning to political philosophy). It's the higher proportion of low population density areas of the US that lead to major differences in political philosophy. 2) Experience of downside risk: European risk aversion is quite easily explained by the fact they have experienced the most extreme version of downside risk imaginable in recent memory (WWII). The worst thing the US knows is a depression. Not total annihilation, fire bombing and markets going to 0. 3) Ethnocentrism: Europe's nationalist ethno-states are far less culturally diverse than the broader US. This leads to a higher capacity of empathy for strangers (because people in a mono-culture are more similar to you, you empathize with them more easily). Ironically though, this empathy is what leads to a higher percentage of GDP being driven by centralized government spending (50% in Europe vs. 30-35ish% in USA). The market is less empathetic, but ultimately more efficient and grows the overall pie faster...even accounting for the additional increase in inequality. Growth compounds exponentially, so this gets more dramatic over time. People in podunk US Midwest States now have a higher disposable income per capita (on both mean and median measures) than people in London, a place you would traditionally think of as among the richest in the world. But again, the US didn't get here because 'culture.' It got here due to design decisions made hundreds of years earlier. Being a multicultural society reveals base human racist leanings, which results in more individualist governance, which leads to a greater embrace of markets and private capital, which leads to faster growth.

PicassoCTs 1y ago

They are also milked by companies, who re-designate pre-existing works (like software projects) as "innovation" and R&D. Its basically a hidden tax-refund with loads of busy-work bureaucracy.

jopicornell 1y ago

I cofounded a startup, trying to get innovation funding and I can say this is 100% my experience. Universities don't think a Software for managing dance and culture academies is innovative, but they are in the field. That was one of the requeriments: to be certified by a university professor. That doesn't make sense: universities are research centers, but not the unique source of innovation (and in our country, not even a source in most fields). Your comment is pretty on point!

TacticalCoder 1y ago

[dead]

huqedato 1y ago

You are perfectly right! I would just add this, from my experience with Horizon 2020: we were working on an R&D project at the time. Applied for grant. We got €16,000, peanuts. (We needed a few hundred thousand....) My point is that this type of EC/EU financing is distributed in a somewhat "social-democratic" manner, under the principle of "everyone should get something". Not mentioning the bureaucratic hell we went through to apply and get the funding.

thih9 1y ago

The article addresses some of these points: > EIB President Nadia Calviño emphasizes the bank's willingness to take more risks, notably speeding up the venture capital financing process, which could be pivotal for startups in a fast-moving market > The bank aims to process startup financing applications within six months, significantly improving from the current 18-month timespan.

alephnerd 1y ago
That's part of the problem. 6 months is too long for an early stage venture to get capital unlocked. And this rightfully causes a lot of us to worry that this foreshadows a significant lack of domain experience in the EIB's proposal (which btw hasn't been made public yet)

ajb 1y ago

There are a lot of grants for universities because a) that's how universities are funded and b) to encourage technology transfer. But pure startup funding does exist, eg the EIC accelerator. If you want to get it there are companies like Inspiralia which specialise in navigating the process.

HenryBemis 1y ago

> will be distributed to members of the bureaucratic class and their network, for low-risk, low-reward projects a quick search at the comments (so far) yielded zero results on "data prot", "GDPR", "privacy", so let me bring those up. GDPR is a _great_ tool for civilians GDPR is a _horrible_ tool if you are a business and want to innovate, expand, 'exploit' (positively). EU money will come with E(U) DP Supervisor and the many directives. There is no way someone can do a proper DPIA and find it 'clean' if you are honestly appraising processes x GDPR. And these people are fierce nay-sayers. I've worked in banks, and I've worked in the EU. Those EU folks shit their pants when the DPOs walk in the room. Say "Legal basis" to someone working in the EU and see them cry (ok I exaggerate). US has been 'stealing' the talent from all around the planet, for decades (and good for both the US and the talents). Why would someone try hard and have regulations every step of the way, and not work for Google? Many years now I've felt that US is 30 years back in "tech" and will never catch up. US companies are dominating the space, and for every 10 steps we do in the EU, they go 10 miles, so every last year was better gap-wise. And I fear it won't change.

tclover 1y ago

Yes EU is corrupt shithole, this title means they have 70b to steal from