[yoran]

I agree. I think that a problem in the EU is the wide abundance of government subsidies. The intentions are good but in fact it messes up the mechanism of natural selection in startups. Companies that haven't managed to raise money from private investors because they shouldn't really be funded (for various reasons e.g. their business model isn't viable, not a good team, or have exterior obligations and aren't fully committed,...) manage to keep their business running for 2-3 years because they're being held in life support through a government subdidy. In the end, they still have to shut down when the funding runs out, resulting in a net loss for everyone.

Don't get me wrong, subsidies are generally still important, for instance for initiatives that have a positive societal impact but that are hard to monetize. It's crucial that these organizations can still exist (not everything needs to be able to generate shareholder value to have a right to exist) and if subsidies allow them to do their thing, then that's great. But for the private sector, I think that there are other mechanisms that achieve the same goal but that maintain the much-needed Darwinism of startups, e.g. by offering tax breaks for angel investors.

[fsloth]

"Companies that haven't managed to raise money from private investors"

This comment is a bit off topic for Finland. It does not have large capital markets looking for a good investment. It's a capital poor country.

Which is a good thing to know, if you come here looking for startup funding. The reason you don't find strong local seed funding is not because government blocks them. The reason is there is no capital for seeding, so to speak.

[reaperducer]

Startups don't need large capital markets.

The vast majority of new businesses in the United States don't get VC funding. They get small investments from friends, families, local banks, etc...

[fsloth]

Well, you do need capital markets, even small ones. For cultural reasons Finland really does not have them. For example, there are no local banks. The whole country has only a few large banks which all require collateral. And here, you don't really go asking for an investment from friends and families.

The main cultural difference here that failure is seemed extremely shamefull. And taking loans from friends and family more or less dubious. And if you failed, and had asked loans from friends and families, would be crushingly shamefull. Hence this creates fear, hence it's not really done.