[tastroder]

From that paper: "Of course, there are caveats to these findings. First of all, GDPR has only been in effect in the EU for a short time, and the effects we’ve observed may be temporary, with investors potentially taking a wait-and-see approach."

Given the year-over-year trends shown in [0] I feel like one should not overemphasize the timeframe that article looked at. The decline seems to be relatively contained at best and future development is unclear at best. And honestly, who cares, even if we suddenly got 20% of startup failures due to GDPR concerns alone. If those concerns are reasonable I'm totally fine with that.

[0] https://news.crunchbase.com/news/decade-in-review-trends-in-...

[ggreer]

It's not due to larger industry trends. The paper shows that startups in the US got more funding in the same time period, including early stage startups.

I remember warning about this when GDPR was being considered. People said it wasn't a concern. Later in 2018 I linked to a draft whitepaper that showed a decline in funding for EU startups. People replied that it was a statistical fluke and that we needed more time before we could draw conclusions. Now it's been a full year and the US-EU investment disparity is higher than ever.

At this point I don't know what would change people's minds. It's like talking to climate change denialists. I get the same response: "There's not enough data. The data doesn't support that conclusion. Even if it did, the trade-offs are worth it."

[tastroder]

Okay, let's say there is enough data and you are absolutely correct. How does that invalidate the "Even if it did, the trade-offs are worth it." response?

The US-EU funding disparity was always there, in my book this leads to less people copying ethically dubious startup patterns from their US counterparts. If GDPR is the sole reason for the decline... doesn't the benefit of the population, of quite a few countries, outweigh the impact on a few startup folks and their investors?

[ggreer]

The EU doesn't prevent the "bad" startups from existing. They just prevent them from starting in the EU, which means the EU misses out on a lot of the potential upside.

Companies like Microsoft, Google, Uber, Facebook, and PayPal started in the US, but they eventually expanded to the rest of the world. Since those companies weren't founded in the EU, EU workers missed out on being early employees. That means those company cultures are far more American than they otherwise would be. The EU missed out on having those companies headquartered in Europe where they'd create more jobs, more wealth, and more profits that could be taxed. Having them headquartered in the EU would also make those companies easier to influence.

It's hard to quantify exactly how much these things matter, but I think the long term cost is far higher than the consumer benefits of GDPR.

[tastroder]

> The EU doesn't prevent the "bad" startups from existing. They just prevent them from starting in the EU, which means the EU misses out on a lot of the potential upside.

To me that sentence just isn't logical. Yes, they'd prevent some them from starting in the European market with their exact original business model if they were starting out now (and not like half of them in the last millenium). None of them started out here back in their time so that sounds more like a question of market penetration than benefit for the startup culture anyhow. With the GDPR they will hopefully also prevent said market penetration for bad actors when the time comes for the next generation of startups.

If GDPR is the sole reason and, subsequently, the US chooses to foster such businesses to win in a market, more power to them. Your examples might be huge successes, but many of them are at this time considered to be either unethical (Facebook, for the most part; Google had their share of negative attention) or plain illegal (Uber for example still hasn't managed to really start out in Germany, let's throw in AirBNB for good measure - I think they were founded in about the same year - huge financial hit that leads users to break laws and contracts left and right).

The calculation of long term cost and benefit is honestly the point where this discussion switches from economical concerns to political, at least for me since I'm not versed enough in macroeconomics to begin to judge that and would always place society over monetary concerns. I'm sure neither of us can win over the other so I'd suggest we leave it at that.

[henrikschroder]

> Later in 2018 I linked to a draft whitepaper that showed a decline in funding for EU startups.

Correlation is not causation. That the GDPR caused this decline is a pretty hefty claim for which you have offered zero evidence.