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The Pigeon Movement – A rallying cry for French startups
- pefavre 14y agoYou can follow the movement with the hashtag #geonpi alongside the handle @DefensePigeons.
- whatusername 14y agoTo put the 43% approval rating in even more context - Julia Gillard's (PM of Australia) rating hit 28% last year -- http://www.essentialmedia.com.au/tag/approval-of-julia-gillard/ http://www.essentialmedia.com.au/tag/approval-of-julia-gilla... 43% does not seem all that low.
- yannickmahe 14y agoIt is somewhat low for a government that should still be in its honeymoon period. They were only let into office this May.
- digitalengineer 14y agoTimed out, no Google cache (yet). Anyone got a summary?
- carlob 14y agoRegarding the soundbite in the article on the 60% tax rate: I find it extremely misleading, bordering on bad faith. 1. The baseline is not the money made selling, but the capital _gain_, that is income, not revenue. 2. Keeping those 15% social charges into account negates the fact that those will accrue your retirement, invalidity, unemployment, what-have-you fund 3. France has a 35 hour workweek. Companies who ask their employees to work longer than that without compensating them in extra days of holiday are breaking the law. So much for the quoted 70 hour workweek. 4. The 10 years of uncertainty are not so uncertain in a country with such a strong welfare state: in case of failure you would have several months of unemployment checks which have a very high cap (as demonstrated by a recent scandal with soccer players).
- bdfh42 14y agoPhew - some "straw men" there don't you think? It is the entrepreneurs who do the 70 hour weeks (no 35 hour limits for the boss/owner). Start a company with €100 and grow it to be worth €500,000 on exit - that is an almost total capital gain (if you get to put something in a pension fund at the same time then you would be very lucky). And all the while paying the very high social charges that accrue in France
- carlob 14y agoWell you don't need to put money in a pension fund if you pay social charges.
- harscoat 14y agoWrong: the state funds/agencies themselves recommend and propose extra (non obligatory) pension funds on top of obligatory social charges because, as they warn every French working, return on social charges is forecasted to steadily decreases over the years. (Aging population: less people working to pay for more retirees)
- mercurial 14y agoRegarding your points 3 and 4, he is talking about founders, not regular employees.
- digitalengineer 14y agoIt says "60% Capital Gains tax - the real innovation killer" in a big bold font. We're talking about startups in France here. You can be in 3 other (more tax-friendly) country's in a few hours drive. Also founders are not employees. You can easily work 70 hours (and still fail, that's why people looking to sell their company will hate the 60% capital gains tax). And again: As founders are not employees they do not receive the same benefits when they fail / get sick / whatnot.
- carlob 14y ago
- RudeBaguette 14y agoHere's the Mailchimp-version of the article, if the site is down. http://us5.campaign-archive1.com/?u=a2b057f584a796c0582820944&id=0a93827421&e= http://us5.campaign-archive1.com/?u=a2b057f584a796c058282094...
- digitalengineer 14y agoThanks!
- subsystem 14y agoI not so sure that mixing business and politics is such a good idea and I'm having somewhat of a hard time concluding what it is exactly that they want. Times when things get thrown up in the air is generally a good for my "kind" of entrepreneur, because even the established players have to work to stay relevant.
- VSerge 14y agoWe think considering the risks we take as founders, being taxed 32.5% (the current rate) is already quite enough. But more to the point, investors who make do with this kind of taxes on their return will never accept an increase to 60% and will by and large invest somewhere else, effectively killing off funding for startups in France. That's the whole ecosystem we're trying to protect here.
- mempko 14y agoMaybe VC funding is not the best way to fund technology.. just throwing that out there. Maybe France should figure out a different way to fund technology than VC. If France cannot figure out an alternative, I would say that killing existing funding is bad...
- bdfh42 14y agothere is a solution for French entrepreneurs (particularly in the context of software and services) - move across the channel to the UK and run your business from there. Easy to pop home for the weekends and there is already a very large French working community.
- Fjslfj 14y agoFrench entrepreneurs are upset because they can't get as rich in an exit as they would like, so they protest? And you want the rest of the country to support you in this? Okaaaaay.... This is the sort of greedy childishness that we could do without in the tech business world. If you're in it for hacking cool shit, you're not going to spend this much time thinking about your exit. This is similar to people protesting the tax rate on lottery winnings -- absurd. Go back to work, stop whining.
- VSerge 14y agoGreedy childiness? We sweat our asses off trying to build a business and overnight we're being told that in the rare case we do get an exit, it'll be taxed at 60% as opposed to 30%. How is that either greed or childiness? Do you even know what the live of a founder with little funding and no personal income can be like? And of course we love what we do, but bills don't pay themselves. And maybe one day I want to have a family and a better income to support it, as opposed to not paying myself for over a year now (goodbye savings from 5 years of working before that), year during which I did pay my team btw. We're not whining. We're fighting this.
- digitalengineer 14y ago(Trolling here but) perhaps president Hollande can take an example from another famous president and claim " If you’ve got a business. you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet".
- justincormack 14y agoOr go to Belgium just next door where there is no capital gains tax on exits at all.
- digitalengineer 14y agoWho do you think provides jobs and economic growth? Your government or new businesses?
- hbbio 14y agoThis also means that there is an opportunity for US buyers (or others) to grab high-quality French startups as founders might be willing to settle for less. Selling their company twice the price in a few months will give them the same return!
- jgrahamc 14y agoI used to live in France and work in technology. To be honest increasing capital gains tax to 60% is not that significant. The entire structure of taxation and social charges and the rights of employees means that French entrepreneurs should simply abandon their country if they want to build a startup as might be seen in the US or UK. Between the inability to fire people who aren't working out, to the huge amount of time off people can claim (on top of their vacation) because of all sorts of rights, to the 35 hour employee work week, to the amount of tax and social charges the employer contributes, France is unsuitable for startups. Various governments have talked about different incentives for small companies, but the on the ground situation has not really changed. I have a good friend who runs a small company in France making medical devices. The litany of employee problems that he has to face because he cannot fire people is a nightmare and then there's the taxation. The reality is that he is working to transfer the company's IP away from France and then leave. At that point France starts getting 0 EUR in revenue from him and his firm. Now, in case you think I 'hate France', here's the thing: I think it's a wonderful country to live in, but it is not suited to startups.
- RudeBaguette 14y agoI rebut everything you just said with one article: http://www.rudebaguette.com/2012/02/07/six-lies/ http://www.rudebaguette.com/2012/02/07/six-lies/
- draggnar 14y agocould you maybe summarize your refutations here?
- jgrahamc 14y agoNo, you didn't. My major points were: high taxation and employee laws. Your rebuttal on taxation is: "In addition, these high taxes are the same high taxes that allow entrepreneurs in France to live off of a 70% unemployment salary for 18 months after they are let go from their company. What goes around comes around." And? That's fine, but that's not what a startup cares about. Sure, it's what a person cares about, but it does nothing to address my fundamental point about the tax/social charge burden. And your other point about there being an 18 month delay in the first tax return is pointless: the taxes still have to be paid. On employee mobility, you say: "well, unless of course, you have a periode d’essai (“trial period”) written into the contract (which is the case ~100% of the time), which allows you to let go of an employee with little to no notice for the first three months. Oh, and you can also request to renew the trial period for an additional three months, legally – but you know, if you suddenly hate your employee after six months, well then, buddy, you’re S.O.L." And? After 6 months you hit all the problems of an employee who is very, very hard to fire.
- thibaut_barrere 14y ago"Funny" side-effect: "bootstrapped in France" may soon become a label of perennity, given the complete counter-incentive to take outside funding... We may see less "Sparrow effects" now.
- troels 14y agoI don't know how it works in France, but in Denmark, we have a capital gains tax of ~50%. However, that only applies if you pull the cash out directly. You can do all sorts of things, such as moving the money into another company, which you then use to make investments from or pull it into a pension fund, both of which gives you a huge tax benefit. So I don't think that part is as prohibitive as it is made out to, although it certainly has some impact. The bigger problems are probably with labour law and general cultural issues.
- shin_lao 14y agoWe don't need more help, we already have a lot of it. We're one of the most generous country of the OECD in terms of help for R&D. If you add more help, companies will stay in France as long as they can benefit them an relocate the minute they expire. I already know, that in order to grow our company, I will have to relocate it in the forthcoming years. The problem is cultural. Big Companies don't work with small companies. The labor laws are extremely rigid and employees care more about vacations than getting things done. Failure will doom you forever. Taking risks is "bad". Everybody looks up the government for help instead of getting things done, and this call for action is another example "Please give us more money!". We don't need more money, we need a cultural shift.
- conradfr 14y agoLike in "The Wire", problems are never simple and usually systemic. France is rigid : - renting is hard which makes moving and adjusting to varying earnings hard. - banks are rigid : lots of companies need liquidity especially during the crisis and banks give them a hard time, lending to unnecessary bankruptcies. - laws are rigid : labor laws tend to make bosses and employees assholes "fighting" each other. Finance laws prevent more capital coming in. On the other hand, Health and natality rate are one of the better of the world and general quality of life remains very good.
- kryptiskt 14y agoI see several comments saying that welfare is worth this tax rate, that is a false dilemma. There are no shortage of countries in Europe with all the welfare you could wish for with a capital gains tax rate around 30%. And with the inner market there is no way for French authorities to stop companies from these countries from targeting the French market. So, welcome to Sweden!
- subsystem 14y agoIf welfare includes things like having somewhere to live and being able to get around I wouldn't exactly choose Sweden as the poster boy. If I were to start a more SV style startup I would move to Berlin like Soundcloud, Readmill, Researchgate, Twago, Wooga etc.
- Millennium 14y agoI'm trying to get the pigeon symbology. The article says it's essentially the French word for what would be called a "sucker" in the US, so the people who are using it are obviously calling themselves suckers. But is this a protest of the French tax situation (i.e. French society is for suckers), or is a statement in defiance of traditional capitalist attitudes toward this sort of thing (i.e. perhaps we ARE suckers, but we don't care; we're still doing what we were before)? I couldn't get a sense from the article.
- VSerge 14y agoFor the Frenchies reading this, if you feel like it would be a good thing for us to show our faces and that we're just regular people trying to build something, maybe we should just talk a few minutes on youtube and send it to people we know to raise awareness. Here's my attempt (in french, sorry): https://www.youtube.com/watch?v=zvMxlTavMVU https://www.youtube.com/watch?v=zvMxlTavMVU
- mgallezot 14y agoThis article does not mention CIR. When you factor-in CIR the French tax environment becomes extremely favorable for entrepreneurs, at least those who hire developers.
- corford 14y agoI live in France and the feeling I get talking to small business owners and my French friends who work in these environments is that everyone knows the system is broken and simply accept that the only way things can work is through liberal bending of the rules. Business owners abuse CDD contracts, effectively running full time employees on rolling short term contracts (making it easier to hire and fire). Lots of employees work beyond 35 hours a week, with any hours over the 35 limit paid cash in hand i.e. black. A lot of businesses that deal with cash (garages, repair men, small bed and breakfasts, florists etc.) regularly declare much less turnover than they should. Newsagents, butchers etc. usually use family members to help out and pay them in cash (because they need staff but can't afford the tax burden if they were to legitimately hire them). It's not uncommon for pool installation or irrigation companies (i.e. the ones who fit sprinkler systems in your garden) to offer to quote a job in two parts in return for a discount on the overall job price. One part will be the official invoice and the second part is paid in cash. Without bending the current tax and labour laws, most small businesses in France would simply cease to trade.
- mempko 14y agoI find it funny that the underlying assumption in all the arguments against the 60% exit rate is that VC funding is the only way technology is funded. Maybe the French as a society should figure out how to fund technology in a different way. It appears to me that Silicon Valley, which is supposed to be innovative, is really only producing one kind of technology. Even in the USA, technology used to be funded primarily in other ways. At some point the US government decided to give all the technology funded by the public away to private interests. Notice that we went from distributed systems like email, IRC, etc to centralized systems like facebook, twitter. This is no accident and it is because the funding system changed.
- deleted 14y ago[deleted]
- davidwg 14y agoThe thing that people are missing here is that complaining about this is not even anti-left. Current French civil servant's pensions (the govt. accounts for the majority of the French economy at 55% GDP) are worth more than a million euros and employees pay tax on this at 7% (average retirement under age of 60 on 75% of your maximum salary) http://en.wikipedia.org/wiki/French_special_retirement_plan http://en.wikipedia.org/wiki/French_special_retirement_plan So in other words, a person who takes a 'blue collar' job gets to be a guaranteed millionaire paying 7% tax whereas an entrepreneur taking the risk of making nothing will pay 60% tax if he makes the same as a civil servant's pension. If people don't point this out it makes French people think that not giving back tax is some kind of capitalist arrogance, when in fact the socialists pay a tenth of what the capitalists do.
- abrown28 14y agoFrance is dead... they just don't know it yet.