[HN Gopher] Tech investors can't get enough of Europe's fizzing ...
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Tech investors can't get enough of Europe's fizzing startup scene
Author : simonebrunozzi
Score : 92 points
Date : 2021-11-23 15:08 UTC (7 hours ago)
(HTM) web link (www.economist.com)
(TXT) w3m dump (www.economist.com)
| gardaani wrote:
| Slush, one of the Europe's largest startup events, is happening
| next week (1-2 Dec 2021) in Finland. The program contains lots of
| interesting talks and they will be streamed. Definitely something
| anyone interested in European startup scene should follow.
|
| https://www.slush.org/events/helsinki/agenda-2021/#/
| secondcoming wrote:
| An article from earlier today seems to decry Europe's startup
| scene [0]
|
| [0] https://news.ycombinator.com/item?id=29316357
| skohan wrote:
| I've worked on startups in the US and Europe, and there
| definitely are differences. Say what you want about the US, but
| the general risk tolerance and attitude of forgiveness around
| failure are a good match for startup culture.
| bluefirebrand wrote:
| > attitude of forgiveness around failure
|
| This has never been my experience anywhere I've worked. I
| wonder if maybe this only applies to the right kinds of
| people and isn't really true in a general sense.
| yourapostasy wrote:
| Depends upon your audience, and how you present your
| experience.
|
| US division of Japanese-owned industrial concern, you come
| from a flamed-out fintech, and you present it as five years
| of your life you'd like back: obviously not very forgiving
| scenario.
|
| US sales financing department of US division of Japanese-
| owned industrial concern, you come from a flamed-out
| fintech, and you excitedly show them how you worked on
| getting automated factoring decision-making to work: much
| different result.
|
| Know your audience, know their market, know their needs.
| arthur_sav wrote:
| Main issue in the EU is still compensation. They are pretty
| stingy with equity and salary.
|
| And risk wise, yes, US tends to swing for the fences more
| often which produces unicorns. EU tends to go more
| traditional and safe routes (aka boring).
| pas wrote:
| ... nonsense! EU startups are not "talent" but capital
| limited. Boring or not, EU startups lack money to develop
| their product to a decent stage, grow to a sort of minimum
| size to be taken seriously, etc.
|
| It's not magic though. Keeping a company alive takes money.
| (And if it's the investors' money it's called capital.) US
| startups pour a really ridiculous money into growth exactly
| because they want to break out of this stage. And naturally
| that's risky.
|
| Of course if the access to capital was a lot easier
| compensation would be higher too.
| varjag wrote:
| They lack money because European capital is risk averse.
| KingMachiavelli wrote:
| They could even have a similar risk tolerance but Europe
| just has more risks. If any one of the big US startups
| was based in the EU they would have been regulated a long
| time ago.
| varjag wrote:
| Some perhaps (Uber? even that is debatable) but _any one_
| is really a stretch. Most of them would be entirely fine
| in Europe, just that it 's not happening.
| alecco wrote:
| What's the point of high compensation when most of it will
| end up getting taxed away? If you combine employee/employer
| taxes/contributions it gets to 80%. Add a huge amount of
| regulations and unions to the mix.
|
| There are some exceptions in places like Bulgaria, Belarus,
| or Poland. But they have much higher barriers like language
| and climate.
| oblio wrote:
| > If you combine employee/employer taxes/contributions it
| gets to 80%.
|
| Where are you getting that crazy number? US salary
| overhead is slightly higher than Denmark's (which I think
| is the highest in OECD), despite the supposedly low rates
| in the US you hear about.
|
| In most of Europe at very high salaries the overhead is
| about 50%, maybe a bit more, which is basically what it
| is in the US in most states.
|
| The main thing is that the US just pays a <<ton>> more.
| So there's more left at the end :-)
| KptMarchewa wrote:
| Not sure what is your source, but this seems to disprove
| that: https://taxfoundation.org/publications/comparison-
| tax-burden...
| oblio wrote:
| You're right, I missed this:
| https://www.oecd.org/tax/tax-policy/taxing-wages-
| denmark.pdf
|
| But I can't find the other source, the point was the
| total overhead: income tax + healthcare + social
| security.
|
| The US is surprisingly high when you add everything up.
| xyzzyz wrote:
| VAT (sales tax) is much higher in Europe (20%+), though
| it won't bring the total tax to 80%. On the other hand,
| taxes in the US are much generally much more progressive
| than in Europe. In the States, the wealthy pay large
| majority of the taxes, while in Europe, these are covered
| mostly by middle class. Therefore, for median wage
| earners in Europe, effective tax rate is much higher than
| in US.
| oblio wrote:
| The initial comment was about top earners, not median
| earners.
|
| And my guess is that it wasn't about VAT or sales tax,
| but about income tax + healthcare + social security.
| flavius29663 wrote:
| I think only top tax states tax you at 50% in the US. The
| majority of developers don't live there.
| oblio wrote:
| Yeah, but what are we talking about, then? Most European
| devs who would move to the US would move to the top
| states, for the top salaries.
|
| You need to compare like with like.
| arthurcolle wrote:
| I really like that Rocket Investments group that just copies
| existing products and launches them in into LATAM/Emerging
| markets. I think this is a German group - does anyone have any
| info on them?
| thenthenthen wrote:
| They are from berlin (rocket internet). Cant find it anywhere
| but heard a rumor they once sold a german ebay clone to Google
| for big $$$ by pretending to be a huge company. They hired a
| aircraft hangar for the occassion
| leobg wrote:
| Yeah. They started out in the early 2000s by selling overpriced
| ringtone subscriptions to minors, essentially.
| nicooo wrote:
| That was already their second gig. They made their first
| millions by copying eBay for Germany and selling it back to
| eBay 100 days after incorporation.
| [deleted]
| boringg wrote:
| When I want investment news on the hottest global markets I go to
| the economist for the cutting edge trends.
| Zealotux wrote:
| So uh... How do I get in the club? Because I could use a few
| millions.
| mrweasel wrote:
| Pretty interesting question. I know at least one company which
| have burned more than $5mil in VC funding over ten years, and
| they only have a semi stable prototype built on 15 years old
| tech (which they claim is an actual product). Clearly there's
| money to be had, but how to get them is the question.
| xyzzyz wrote:
| $5M over 10 years? I forgot how to count that low.
| mrweasel wrote:
| Yeah, I know, not a lot for a Silicon Valley startup. It's
| still a ton of money else where in the world. In Denmark,
| $100.000 will buy you a top notch developer for a year.
|
| HN always assume Facebook, Twitter and Uber when talking
| startups, but the vast majority of startups in Europe are
| going to be much smaller, and $5M over 10 years is
| something that would be a godsend to most startups.
| xyzzyz wrote:
| In SV, $5M funding over 10 years would allow you to,
| maybe, like, rent some coworking space, rent some
| computing, and hire 1-2 people.
| johnebgd wrote:
| Have ability to believe lies.
| toomuchtodo wrote:
| Sell a dream to those with deep pockets and shallow
| expectations. The dream and equity sold is the product.
| lumost wrote:
| Isn't this fundamentally the best strategy when money is
| free? Scarcity/speculation should dominate returns.
| jbverschoor wrote:
| So which "startups" are they talking about? If they're talking
| about scaleups, sure. Less risky.
| zz865 wrote:
| I thought fizz means eventually to fizzle out and disappear.
| escapecharacter wrote:
| They have to say fizzing because not all of the startups are in
| the Champagne region of France.
| [deleted]
| rexreed wrote:
| It's an unfortunate use of term, because while fizzy does mean
| bubbly and frothy, it can also mean unsustainable because the
| fizz in drinks never lasts.
|
| Author should have / could have used the title "Tech Investors
| can't get enough of Europe's growing startup scene". Would have
| conveyed a much less bubbly / frothy / transient nature.
| echelon wrote:
| My mind jumped to "fizzling out" before the "fizz" = "frothy"
| or "fizz is just temporary" associations kicked in. This is
| definitely a poor choice of adjective.
| jetrink wrote:
| In this context, it's an allusion to carbonated drinks and is a
| different way to say 'bubbly.'
| brezelgoring wrote:
| Here is the archive link:
|
| https://archive.md/SsgdQ
| 1cvmask wrote:
| https://archive.md/SsgdQ
| SkyMarshal wrote:
| Headlines like this sound more like they're trying to convince
| the reader of something that isn't actually happening.
| yoran wrote:
| It's paradoxical that entrepreneurship is less of a thing in the
| EU than in the US. After all, Europeans can afford a lot more
| risk than Americans. There's a strong safety net in the form of
| social security. Health insurance is not tied to your employer.
| European university graduates don't start with lives with several
| $100k in debt, while having gotten an education of similar
| quality. Maybe the culture is shifting?
| whizzter wrote:
| Like others mention, while you might not be on the hook for
| huge hospital bills there are other parts of the safety net
| that are more or less denied to you.
|
| Myself I ran into "problems" when it came to parental leave,
| parents in Sweden usually gets a combined 480 days of parental
| leave, of which about 360 are at 80% of your income levels.
|
| Problem is that if you (like me) plan on bootstrapping
| something then you're not taking out salary during that period,
| so even if you paid a lot of money in taxes the year before you
| still get marked down as a zero-earner if you plan to take time
| off with your kids.
|
| Luckily the Swedish govt realized that this hurts things in the
| long term so they actually relaxed the rules in this area so
| you can retain your previous income levels for 3 years if you
| want to take advantage of parental leave.
|
| (Not entirely sure if they fixed this if you get sick though,
| regular employees that get sick can retain most of their income
| for a while but not entirely sure if these 3 years startup
| grace period applies when getting sick)
| jacquesm wrote:
| If you push enough people off a cliff some of them will learn
| to swim. If you don't push people off a cliff only those that
| think they'll be able to swim may jump.
| andreyk wrote:
| I'd guess a lot of it is cultural - I believe much of Europe
| also has a far less workaholic culture than the US, with more
| emphasis on living life and whatnot. And I'm sure there are
| other factors (France's labor laws presumably make things
| harder, although that's a barely informed guess on my part).
| otikik wrote:
| My not-very researched take: entrepreneurship is a game played
| mostly by people from already wealthy families. Since the % of
| wealthy people in the US is higher, and their rich are richer,
| you get more "initially rich" entrepreneurs.
| Axsuul wrote:
| Interesting take but how do you explain almost half of all
| companies being founded by immigrants or their children?
| otikik wrote:
| Are those poor immigrants, or rich immigrants?
| TTPrograms wrote:
| 1) Less upside for entrepreneurs/investors/early employees due
| to tax policy,
|
| 2) greater hiring/firing friction due to stronger employee
| protections,
|
| 3) greater fixed operating costs/overhead all around due to
| increased incorporation costs/bureaucratic requirements.
|
| I don't think these things are necessarily negative, but in a
| world with competition between markets with high incorporation
| friction and low incorporation friction you'd expect
| entrepreneurship to concentrate in lower friction markets.
| jbay808 wrote:
| I can't speak for Europe, just for Canada, but I assume that
| a similar dynamic might exist. "Less upside" for successful
| founders due to taxes is frequently cited but I seriously
| doubt it. Instead, less risk appetite in the investment
| community is far more likely. Investors offer less money,
| with far more strings attached, and so founders move to the
| US to seek better investment terms. Taxes are a distant
| afterthought.
| TTPrograms wrote:
| If taxes affect upside for investors (especially in large
| gain outcomes) then it would definitely reduce rational
| risk appetite.
|
| Say it's rational for some untaxed investor to take a
| chance on 1% on no less than $10M return. If after taxes
| somewhere that turns into a $5M outcome then you would need
| a 2% chance for equivalent expected value.
| jorblumesea wrote:
| Europe has very progressive policies on some level, but also
| very regressive or unfriendly policies for business owners.
| Classic example is bankruptcy. In the US, chapter 11 is done as
| an almost routine "get me out of debt". This was impossible in
| Europe until very recently (EU Restructuring Directive, July
| 2021 was the deadline to implement).
|
| Personal bankruptcy is another good example where Europe just
| has no equivalent.
| flir wrote:
| In the UK personal bankruptcy costs PS680 and is normally
| discharged after twelve months. Is the US less onerous than
| that?
| ArtRichards wrote:
| In general, as an individual entrepreneur/'business
| owner'/selbstandiger in germany, and also in the US, its neigh
| impossible in Germany to perform your own accounting/tax
| filings; and the idea of an LLC is very difficult to obtain
| (see how companies like Starbucks structure their limited
| liability with an 'AG & Co. KG')
|
| Combine this with the lack of 'safety net' for someone who owns
| the business (you dont qualify the same as if you were a
| regular non participatory employee) and the lack of angel
| funding/froth in general... its not as simple as you may
| imagine, especially for non citizens.
|
| Its possible, but its not as simple :)
|
| Edit typo
| jashmatthews wrote:
| Paying private health insurance and pension is, inalmost all
| cases, better for an internationally mobile founder anyway!
| zemvpferreira wrote:
| There is no paradox, only innocence. Did you know here in
| Portugal company directors used to be personally liable for
| social security payments for a business's employees in case of
| bankruptcy, until the end of their former contract? That meant
| for every engineer you hire, you might easily be on the hook
| for 10K with the government in case you go under. Try failing
| fast with that.
|
| America was built in part by swindlers and robber-barons in a
| system who let them get away with it by design. In many of
| Europe's different legislations, failure in the bankruptcy way
| has/had serious consequences for the business person
| responsible. Play fast and loose with your responsibilities
| like you might in the US, confident that the corporate veil
| will bail you as long as you don't do anything criminal, and
| you might find yourself staring down the barrel of a loaded
| fiscal gun.
| TTPrograms wrote:
| If this perspective of "startup failure is a deep moral sin
| insufficiently penalized by the government" is common in
| Europe then the lack of entrepreneurship is not very
| surprising.
| igorkraw wrote:
| Startup failure is fine, not being accountable to your
| employees is what we have a problem with. The concept of
| the workers council in German law keeps throwing wrenches
| into the attempts to import the more exploitative business
| models from the US (N26 and Gorillas are recent cases) and
| Walmart completely flopped for related reasons. I do admire
| the business and entrepreneurship culture over the pond,
| but I think we can import the best bits of that without
| treating humans like fungible capital and burnout culture.
| It will just take a lot of time, especially in Germany (my
| native country), the business culture is still very
| conservative in the sense of rule based and
| authority/hierarchy oriented. I think if Germany adopted
| californias laws on non-competes and employee IP a lot
| would be gained already.
|
| Notably, Sweden has a very robust social security network
| and a lot of entrepreneurship as well, the Swedes I talked
| to explicitly pointed to it as something that eased their
| way into taking risks.
| TTPrograms wrote:
| Are you implying that startup success in America requires
| exploitation of workers? I don't think most people would
| consider the management of early employees at successful
| startups to be "exploitative". Most of them are heavily
| incentivized.
|
| There are specific issues with the worker models of Uber
| et al, but that's an orthogonal point to the general
| formation of startups.
| kevinventullo wrote:
| For ultra successful startups, sure everyone gets rich.
|
| I think the issue is with the 95% of startups that have
| no or moderate success who convince employees that lotto
| ticket equity and beanbag chairs are worth more than
| work-life balance, healthcare, and cold hard cash.
| vletal wrote:
| Ltds are a common thing all around the world and work as
| you'd expect. What OP mentions seems to be specific to
| Portuguese law.
| PostOnce wrote:
| Running a bankrupt ltd means a lot of serious
| consequences in a lot of countries... like not being
| allowed to run another one for a long time.
| zemvpferreira wrote:
| You'd be surprised. If I'm not mistaken in some central
| European countries you could be sentenced to jail time
| after bankruptcy up to the 2000s. My point is precisely
| that ltds exist but are not the same world-wide. People
| (like myself) raised on American business folklore can be
| in for very rude awakenings when things start going
| badly.
| zemvpferreira wrote:
| That's the wrong framing. I suspect the reality is that
| many 20th century European law-books were written to
| protect workers and state from exploitative/criminal
| business owners. Rightly so.
|
| It's an accident that the most important bits of corporate
| and labor law don't distinguish between a 300-person shoe
| factory and a 20-person series-A startup. They weren't
| around when these concepts were codified and written in
| stone. The systemic and personal consequences are
| unfortunate but impossible to prevent.
| kwere wrote:
| BANKRUPTCY IN ITALY: Before turning to the text of the
| Italian Bankruptcy Law, it seems appropriate to reflect
| briefly on the profound changes that have been progressively
| introduced by Parliament since 2005. The bankruptcy law's
| very basis, and its philosophical point of view have been
| radically transformed in order to adapt to changing economic
| and historic circumstances. Traditionally, the law was
| directed at punishing those entering into bankruptcy for
| their bad faith behavior and breach of market rules; i.e. for
| failing to honor their obligations. The bankrupt was expelled
| from society and deprived of his civil capacity - a morte
| civile or civil disenfranchisement. The law as it
| historically stood did not envision those situations where
| the businessman was "honest, but unfortunate" or provide the
| leeway necessary for the exercise of business judgment in the
| running of an enterprise. Bankruptcy as a punishment, not as
| a tool for coping with economic factors often beyond our
| control, was the product of the unique economic and political
| circumstances that dominated Italy when the law was enacted
| on March 16, 1942. Over time the circumstances underlying the
| law's approach slowly disappeared as society became ever more
| industrialized. The structural changes in the economy that
| accompanied it clashed with bankruptcy rules developed and
| intended for the predominately agricultural economy that
| existed during the first half of the last century. This
| scenario, from a subjective point of view, is then inserted
| in an objective context that has completely changed over the
| intervening 60 years. Globalization, and ever bigger and
| unstable markets, steeper competition, products that rapidly
| become obsolete and a society bombarded by advertisements
| have necessitated modification in the Italian bankruptcy law.
| The incompatibility of the law with the facts and developing
| international practice required a Copernican revolution of
| the very basis of bankruptcy in the Italian legal system by
| issuing a series of innovative reforms to overcome - through
| procedures allowing for agreements between creditors and
| debtors - obstacles that the lack of liquidity introduces
| into the relationship between employees, suppliers, creditors
| and businesses. The work of modernizing the law moved the
| process' center of gravity from one focused on judicial
| proceedings and court control to one that involved all
| interested stakeholders, including the "piano attestato", or
| in more complicated situations, restructuring plans and the
| "concordato preventivo". In more recent times (October 2012),
| the automatic stay was introduced to protect the value of the
| whole business when timely action is taken to avert the
| crisis by filing for bankruptcy protection in order to obtain
| the time necessary to enter into a restricting plan or
| "concordato preventivo". All these procedures involve the
| debtor reaching some form of an agreement with creditors.
| Under the old system, a judge would oversee the proceedings
| with the assistance of a trustee who operated much as the
| court's right hand or executor. Following the reform, the
| proceedings are now entrusted to a team composed of a trustee
| and a creditors' committee who work in tandem to protect the
| interests of the creditors and the procedure as a whole. In
| those cases where the sole goal of the proceedings is to
| liquidate the bankruptcy estate, the trustee and committee
| develop a liquidation plan designed to transition the
| estate's assets back in to the market. The judge still has a
| role to play in this system, however he or she adopts a less
| visible role only intervening in those cases where disputes
| arise or the creditors' committee is not timely formed or
| some extraordinary activities have to be authorized such as
| settlements, special agreements etc. Moving from a "judge-
| centered" to a "stakeholder-centered" model was dictated by
| another related change: the move of the judicial system as a
| whole from a formal procedural model to one based on the will
| of the parties. This change was induced by a desire to remove
| formal barriers to resolving the economic crisis of the
| entity entering bankruptcy. The new model took inspiration
| from other systems and implemented a process that includes
| that possibility of concluding settlements, debt
| restructuring agreements and other arrangements with
| creditors. A single philosophical line of thought runs
| between all these "therapeutic" mechanisms: they are designed
| to forward an economic purpose by sanitizing the enterprise
| in crisis and transition its assets back into the market as
| quickly as possible. The new law promotes agreement and
| supports it by employing a flexible and informal system.
| Accordingly, those actions taken in pursuance of any approved
| agreement will be protected from third party challenges. In
| many ways the reforms have brought about a "futuristic"
| system where the interests of the creditors and the debtors
| can be merged in a "New Co.", a new company, to which the
| task of overcoming the crisis is entrusted. This includes the
| conversion of debt into equity, or the application of "put
| and call" selling, or protecting a company while it weathers
| the crisis, or debt restructuring so as to allow more time
| for payment or alternative methods thereof. The reform was
| also influenced by other public interest considerations. One
| such important factor was the cost associated with the
| judicial management and coordination of bankruptcies.
| Considerable public resources are required for the court
| system to oversee and manage multidisciplinary proceedings
| such as the liquidation of a company or its administration
| while agreements are made with creditors. Every judge who
| essentially becomes a company's administrator is another not
| sitting in other cases where delegated administration is not
| possible. The requirements for admission to the bankruptcy
| procedure have also worked to keep in check the number of
| cases that can be filed before the courts by permitting only
| those cases that are of sufficient economic weight. The new
| law looks to defend the economic value and production
| capabilities by finding an agreement between all the
| stakeholdersto put the enterprise back in motion, to provide
| a "fresh start" and allow the entity to overcome the crisis.
| The philosophy animating the new bankruptcy law no longer
| revolves around an interest in the punishment of the bankrupt
| and the liquidation of his assets, but one that seeks to
| protect the public interest in a functioning economy saving
| and maximizing the value of the enterprise. Today, bankruptcy
| finds its greatest value through the system's ability to
| provide a discharge of debt. A bankrupt who understands early
| on that he is headed toward insolvency and that collaborates
| with the system, by placing all the company's future revenues
| at the disposal of the bankruptcy proceedings, can under the
| terms thereof liberate himself from unsatisfied creditors at
| the end of the liquidation proceedings. Discharge, a new
| fresh start for the debtor, is made possible in light of the
| authoritative jurisprudence of the Court of Cassation. The
| actual criteria established by the Supreme Court require a
| case-by-case evaluation to be made by the court to ensure
| greater fairness and a more realistic result. Bankruptcy is
| an unfortunate part of any healthy functioning economy. The
| role of the law in such circumstances is to provide a
| mechanism by which the public interest is best served, that
| is to say, that secures the timely recovery of the economic
| assets involved so that they may continue to contribute to
| the general welfare. The Italian Bankruptcy Law as modified
| in 2012 attempts to strike the right balance between favoring
| the continuing concern and not sheltering those economic
| actors who abuse the system to the detriment of society. The
| historical origins of the law are still apparent in its
| structure, however, no system will ever be completely
| divorced from its past. The reforms have attempted to keep
| the best of what came before while adapting to new
| challenges. The systematic reforms discussed above are the
| reason I felt it opportune to offer an English translation of
| the Nuova legge fallimentare, the new Italian bankruptcy law.
| The reforms have brought about a modern, efficient and
| effective system that is attuned to the market and the
| capable of coping with economic ebbs and flows. While it is
| not perfect, the new law is a fine tool for providing answers
| to the questions that any investor or creditor asks during
| bankruptcy: When and how much of my investment/claim will I
| recover? and how much will it cost me? The reformed Italian
| law ensures needed predictability to the response to these
| questions.
|
| https://www.iiiglobal.org/sites/default/files/the_italian_ba.
| ..
| duped wrote:
| Framed another way, perhaps the existence of strong social
| safety nets is evidence of cultures that discourage behavior
| and ideologies that encourage entrepreneurship.
|
| Even in the United States the conditions for a startup
| ecosystem to thrive are localized mostly to California, both
| financially and culturally. Risk intolerance and shortness of
| ambition is pervasive in our society too, just that a few
| historical factors have allowed for a business counterculture
| to thrive in parts of it.
| csa wrote:
| > Even in the United States the conditions for a startup
| ecosystem to thrive are localized mostly to California, both
| financially and culturally.
|
| I largely agree with this, and I (mostly) love California for
| many of these traits.
|
| That said, I think startup ecosystem 2.0 will be centered
| around Austin. It will look very different than the
| California startup scene, but it will be just as
| transformative (if not moreso) imho.
| b20000 wrote:
| in europe, you cannot file for personal bankrupcy. you will be
| stuck with debt forever.
| Hglgrd wrote:
| This isn't true. For example, France and Germany both have a
| complete personal bankruptcy legislation
| kall wrote:
| I don't think that is the case across the board. I've
| certainly heard of Privatinsolvenz. But you might not be able
| to claim this for business related debts (which should be
| covered by your limited liability cooperation in theory)?
| jacquesm wrote:
| This is complete nonsense. I don't know where you picked that
| up but wherever you did it isn't true.
| robin_reala wrote:
| That's categorically not true. For example, in the UK you can
| file for bankruptcy[1] and in Sweden you can apply through
| Kronofogden to have personal debts cancelled after a
| supervised three year period.
|
| [1] https://www.gov.uk/bankruptcy
| whizzter wrote:
| Slight correction, In Sweden you can apply for "debt-
| sanitation" from Kronofogden, it requires you to pay all
| earned money above an level called "existential minimum"
| for _5_ years (ie you'll live as a really "poor person").
|
| After that point in time all the old debts are cleared off
| (although you might still be stuck with bad credit scores).
| [deleted]
| marmaduke wrote:
| At least for France, there is less to recommend doing a startup
| than in the US. The social security regime is worse (than for
| others eg employees, govt workers), the tax schemes are complex
| and penalizing at the low end, and the amount a company has to
| pay an employee is near double what the employee sees in the
| bank, because near half goes to support the social security
| net. I've been here a decade and wouldn't start one, even after
| doing autoentrepreneur unless it was the only choice.
| sokoloff wrote:
| If you're stuck in France, could you not start a company
| anyway and only hire remote workers from outside of France?
| vkou wrote:
| > and the amount a company has to pay an employee is near
| double what the employee sees in the bank, because near half
| goes to support the social security net
|
| In dollar values, in the US, that same amount will go to pay
| for health insurance and benefits and social security and
| medicare taxes. Combined with lower wages, and your overall
| payroll expenses will still be _much_ lower in France.
|
| There aren't a lot of senior engineers making north of
| $300,000 USD/year in France. But there are a lot in SV.
| medo-bear wrote:
| this is paywalled for me
| chillel wrote:
| http://archive.today/SsgdQ
| trutannus wrote:
| > Skype, was in 2011 bought for $8.5bn by Microsoft
|
| Figured Estonia would make it into this at some point.
| varjag wrote:
| Estonia was where its Sweidsh and Danish co-founders outsourced
| the development.
| 1270018080 wrote:
| European countries still pay a solid 80% less than in America.
| How can they ever get talent?
| CraftingLinks wrote:
| Because we don't want to live in US. Because we dont like US
| culture. Because there's more to quality if living than just
| raw dollars.
| oezi wrote:
| I think many of us Europeans like US culture, but don't want
| to get shot by a teenager with an assault rifle.
| durnygbur wrote:
| >40% deductions from the already subpar salaries certainly
| compensate this /s
| jowdones wrote:
| Because European talent is largely confined to EU so gotta take
| what's being offered.
| jp57 wrote:
| "fizzing" and "fizzling" are too similar.
| asdfman123 wrote:
| It has to come from the fizzing region of France, otherwise
| it's just a sparkling startup.
| 0des wrote:
| I think this is partly the fault of the word "effervescent"
| being too hard to spell.
| bingohbangoh wrote:
| they should've said "bubbling tech scene"
| 0des wrote:
| Then the reader could associate it with a tech-bubble.
| mynegation wrote:
| r/whoosh
| bingohbangoh wrote:
| idk if "red hot" would be any better -- bubbling is what
| first came to mind
| kyleblarson wrote:
| Came here to say that. I read it as 'fizzling' and
| immediately thought the title was sarcastic.
| bryanrasmussen wrote:
| gassy
| dr_dshiv wrote:
| No really, it's about to pop
| zeristor wrote:
| Meta, Amazon, Google, Tesla:
|
| MAGGOT
|
| Arse, that 'o' is in the wrong place.
| 1cvmask wrote:
| Funny they didn't mention UI Path and some others like Darktrace,
| Deliveroo, Getir, Trendyol etc... :
|
| https://sifted.eu/articles/europe-unicorns-2021/
|
| https://sifted.eu/articles/uipath-seed-investors/
| bschne wrote:
| > "Now Spotify is the winner in music streaming, Klarna is the
| winner in buy-now-pay-later and UiPath is the winner in robotic
| process automation--they're all European," he says.
| nostrebored wrote:
| > Klarna is the winner in BNPL
|
| lol what a bold and wrong statement
| MikeKusold wrote:
| Swedish Klarna is privately valued at 45.6B.
|
| US Affirm is publicly valued at 34.55B.
|
| AUS Afterpay is publicly valued at 31.19.
|
| I don't think it is a bold statement. All the major
| competitors are pretty close.
| nostrebored wrote:
| That is why it's a bold statement. The landscape is still
| rich with competitors and seeing new entries. Affirm and
| Afterpay are public. Klarna is private and the
| beneficiary of a very frothy VC market. Their rounds are
| led by Softbank which many investors think is leading a
| charge in overvaluing unicorns.
|
| We'll see how things shake out. Calling them 'the winner'
| of the market is just odd.
| onion2k wrote:
| _Calling them 'the winner' of the market is just odd._
|
| Calling them the winner right now is fine. They _are_
| winning.
|
| They have not won though. The game is still on.
| nostrebored wrote:
| Measuring private valuations vs. public valuations is
| dubious. I don't think it's as clear cut as people are
| making it.
| jackTheMan wrote:
| Valuations is dubious regardless private/public. See
| Tesla or Rivian...
| WJW wrote:
| I don't really have a horse in this race, but surely the
| big credit card companies are the big dogs in the "buy
| now pay later" market? Or is there some highly tech-
| specific submarket these days?
| nine_zeros wrote:
| Buy now, pay later platforms allow random e-commerce
| sites to support installment payments. Thus, mom and pop
| e-commerce sites don't need to build it out. It's all
| provided as a SaaS.
| yladiz wrote:
| It's similar but a little different, as it is usually
| shorter (you need to pay it in a set number of
| installments over a fixed schedule, like 4 weeks) and
| there's no interest if you pay on time, at least with
| Klarna. I have no idea how they make money (maybe they
| make some money from the interchange?) but that's the
| gist of their business model.
| nivenkos wrote:
| They make money when you don't pay on time.
| hogFeast wrote:
| They earn a fee from merchants and, despite what they
| say, I believe most of these companies also have products
| that aren't zero interest (Affirm also sells some of its
| loans...I have no idea about this, I have relatively good
| knowledge of accounting but I am not 100% on the
| accounting for this so I have no idea whether it actually
| generates income).
|
| The fee from merchants is interesting because the claim
| is: the fee from merchants is going to be larger than the
| losses from making bad loans (and the costs of
| servicing). I am very sceptical of this. Management
| describe their underwriting model as largely using stuff
| like the product bought, the retailer used, the value of
| the order...it just sounds very suspect. And that is
| before you consider the valuation, the legislative risks,
| the interest rate risk (doing 0% loans stops making sense
| if interest rates rise), etc. I am in the UK and these
| kind of businesses usually trade at very low multiples
| because the regulation in the space is so high.
|
| I would regard $10bn market cap as a pretty jazzy
| valuation for Affirm, the stock is at $35bn.
| mistrial9 wrote:
| credit has been the ruin of whole societies -- what can
| go wrong?
| cactus2093 wrote:
| Credit cards are in a great position to get into this
| market since they can use your existing line of credit
| and don't require a new credit check in order to give you
| a loan. The Apple credit card is a great example, where
| now you can buy any apple products on a monthly payment
| plan with no interest and without any extra friction at
| check-out.
|
| But I don't think most banks issuing credit cards are in
| this business yet. And of course making normal purchases
| on credit cards is a terrible way to "buy now pay later"
| because the interest rates are so ridiculously high.
|
| It will be interesting to see if more banks get into this
| market seeing how successful Klarna, Affirm, etc. seem to
| be, because it does eat into their existing high interest
| rate profits on credit cards.
| stef25 wrote:
| > Deliveroo
|
| How perceptions of this company has changed. Prices are
| ridiculous, both from the Deliveroo mark up and what the
| restaurants charge extra to make up for that markup (4EUR
| bottled water seriously?)
|
| More than half the riders here in Belgium are illegal
| immigrants using fake rider accounts that don't speak the local
| language. There's a squat near my house where they all hang out
| waiting for a call.
|
| Seriously, look in side the window and you see a bunch of guys
| sitting around on broken chairs and crates surrounded by their
| Deliveroo backpacks (which are all filthy and worn out).
| They're so destitute and sorry looking that when one comes in
| to a restaurant to pick up a delivery you think omg.
|
| I'm not someone who usually takes the side of "those poor
| workers" but in this case Deliveroo really runs on paying the
| poorest, more vulnerable people in society pennies to deliver
| over priced meals that a restaurant sold them for something
| like 30% less than they usually would.
|
| Meanwhile the industry's gravitating toward ghost kitchens,
| putting even more unfair pressure on local restaurants.
|
| Seriously I'd love drag whatever MBA is behind this company and
| show them what their "high valued startup" looks like here. I
| don't understand how these people sleep at night.
|
| And then there's Lendable: "Loans at 28.6% Representative APR"
| and we're supposed to be amazed they turn a profit?!
| jacquesm wrote:
| All of the food delivery companies are predatory. Haven't
| seen a single one yet that is doing anything other than to
| squeeze the restaurants, the customers and the deliverators
| for every last dime.
| stef25 wrote:
| takeaway.com employs their riders, I think.
| rexreed wrote:
| UiPath, while founded in Romania, is officially headquartered
| in the US (NYC) and is counted in US / NYC funding amounts. 80%
| of the team is not in Europe either, with the entire management
| team in the US. So they aren't usually included in any Europe
| VC roundups, despite the origin of the company.
| oblio wrote:
| > 80% of the team is not in Europe either, with the entire
| management team in the US.
|
| Is that really the case? Their main R&D center is in Romania
| and it's huge.
|
| If anything, it's probably the other way around since
| management is the top of the pyramid, which kind of by
| definition, is not a lot of people.
| rexreed wrote:
| Yes, counting the sales, marketing, solutions development,
| partner management, education, consulting, and other parts
| of the company, the vast bulk of the team are not in
| Romania, even though a large part (but not all) of the R&D
| team is there.
|
| More details here: https://craft.co/uipath
| oblio wrote:
| I'm not sure I agree with your original estimate (80%
| being outside of Romania, let alone 80% in the US).
| Checking some Romanian articles, they had 800 out of 2800
| people in Romania in January 2021.
|
| On top of that, they have offices around the world, so
| it's very unlikely that all the other 2000 are only in
| the US.
| rexreed wrote:
| My original comment was "80% of the team is not in Europe
| either". I didn't say 80% in the US, and I wouldn't make
| that claim now.
|
| Furthermore, as per above link, Employees (est.) (Jan
| 2021) 2,863. Romanian employees are not 800 as claimed in
| that article, and closer to 600. 20% of 2863 is 572.
|
| Even 800 out of 2863 is 28%, and the actual number is
| less than 800. It seems we are much on the same page.
| oblio wrote:
| https://www.zf.ro/burse-fonduri-mutuale/cati-angajati-
| are-ui...
|
| Which takes me to:
|
| https://sec.report/Document/0001193125-21-094920/#rom9855
| 6_2
|
| > As of January 31, 2021, we had a total of 2,863 full-
| time employees. Of our employees, 714 were engaged in
| research and development. 122 full-time employees were
| based at our headquarters in New York, New York, and 727
| full-time employees were based in Bucharest, Romania
|
| And that's from January. What are your sources? You're
| very confident for someone contradicting their IPO
| documents ;-)
|
| Plus you're moving the goalposts. I proved that more than
| 20% are in Romania alone (your own math says 28%), UIPath
| has other European offices. So it's entirely possible
| that around 50% of UIPath employees are in Europe. I'm
| too lazy to check.
|
| My point is that UIPath was started in Europe and has a
| strong presence in Europe. The main development center is
| in Europe. The top management is European. It can't be
| considered a purely American startup.
| sebow wrote:
| Should not be double-counted in regarding the funding,
| indeed, but it still is a 'romanian company', and it's not
| really in the "startup phase" anymore, it actually has some
| long history but only post-covid became very successful.
|
| European startups that are remotely successful literally have
| to move to NYC(or any other US city i guess, but NYC is the
| preferred choice, though it may be expensive) to not die
| off.It's not even a joke, and it's the sad reality of living
| in the grandious European Union that suffocates you with
| bureaucracy.There have been places that became lax towards
| tech startups (see cz for example), but even with laws being
| slowly changed/ignored, the money either isn't there compared
| to US, and even if there is (see france, uk especially post
| brexit), the investing entities lean on the fact that there's
| more talent/square meter, so they're not really that quick to
| pull the trigger if they can save on some bucks.
| outside1234 wrote:
| Wow, so content free. What companies are representative of this
| new scene?
|
| Don't get me wrong - I'd love this trend - but I just don't see
| it yet.
| NicoJuicy wrote:
| Eg. Someone i met through a friend: OTA Insight.
|
| ( I'm not related to the scene)
| endymi0n wrote:
| TL;DR: They aren't as visible on average because there's not
| such a big prevalence of outliers (even if we do have some,
| such as Spotify).
|
| EU creates 39% of global startups, but only 14% of unicorns.
| Success rate
|
| It's historically much more revenue than growth focused, but
| there's quite a lot of successful startups over here as well.
| It ties in closely with the local culture of "Mittelstand" and
| a far larger share of SMB's/family businesses than bigcorps in
| the US.
|
| https://www.mckinsey.com/industries/technology-media-and-tel...
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