[seibelj]

> It seems to me that about half of our “new deal activity” right now is happening outside of the US. And very little of it is in western Europe where most of our non-US investing has been for the last decade.

I always thought the problem with European startups was lack of a VC critical mass and risk taking ethos. So I thought the globalization of VC would help, but this sounds like it’s bleaker than ever.

Is it the absurd bureaucracies? Taxes? Red tape? Europeans are a super-smart bunch but their devs make far less and they lack any superstar tech giants. Makes no sense.

[jcfrei]

The European market is not a single market like the US - that's a big disadvantage when you're growing a company. It's a quasi-single market (and only for about 20 years at that). You still have to take lots of different national regulations into account, as well as the language barriers and very different cultures from country to country. The US is still the largest, single, free market - and that's what attracts entrepreneurs (and VCs).

[Swizec]

> but their devs make far less and they lack any superstar tech giants

These two are related. You can’t have high salaries without a competitive market full of money sloshing around.

A company making $300k/employee can never pay as much as a company making $1mm/employee. Even if it wants to.

I wonder how much brain drain the EU tech scene experiences by people working for US tech companies. Either remotely, via local offices, or plain old moving to USA.

[csomar]

> I always thought the problem with European startups was lack of a VC critical mass and risk taking ethos. So I thought the globalization of VC would help, but this sounds like it’s bleaker than ever.

Europe only makes 10% of the world population, and the EU population is a bit over the half of that. I don't have the numbers, but I'm confident the EU gets more per capita.

> Is it the absurd bureaucracies? Taxes? Red tape?

All of that plus Europe is quite developed. VC wants a high return and under-developed emerging countries can give more for your buck.

[R0b0t1]

I have a lot of friends and acquaintances in Europe. From the ones who tried to start a business I have been told the issue is taxes and regulation. It is nearly impossible for someone with limited initial income to maintain the appropriate legal entities. The overhead you pay just for existing in Europe makes small European businesses noncompetitive. There are other valid issues highlighted here, but first and foremost this is what I have seen.

[dopidopHN]

I've been involved in the French/Parisien startup world for half a decade. If you pay taxes as a startup you missed a few turn and you should talk to a accountant. ( At least the first 5 years )

Regulations can also be a opportunities. Your client might start dedicating money to fulfill that regulation. If you are able to help your client with that in a timely manner, it's easy money. ( B2B setting )

To the point: Our main frustration as a high growth entity was how hard it was to jump from market to market.

We got into Spain because nobody was there, cool. let's replicate in Germany. Oups. Total failure and the brand is damaged.

Every single country is a battle that you have to understand intimately. We got a way out thought a random re-seller in Holland that started distributing us in China.

Our roadblocks were made of small market with already implanted competitor. Not regulation or taxes.

( To be fair: we were selling hard/softaware on very niche and finite market. )

[toyg]

As a counterpoint - that's not what I've experienced in the UK. I know it's arguably one of the "friendliest" legislations, but still, red tape wasn't a big deal.

From what I heard from others, the main issue is access to credit and funding. European investors are risk-averse and ask for too much in return, probably because their experience is in traditional low-margins sectors; sadly that's a vicious circle, where low margin begets low margin and things never improve. Also, people just don't like to pull the insane working hours that are normal in the US.

[R0b0t1]

The UK is the sole exception afair. It's not just access to funding because many businesses in the US are created with no external funding. If you attempt to do that in mainland Europe you're going to bankrupt yourself just setting up the company. In most US states you just pay ~$100 and can 1099 your first employees.

[disgruntledphd2]

Europe is not a coherent place, much of the important regulations are national. At the very least, one should divide between Northern/Western Europe (more entrepreneurial) and Southern Europe (more regulations, less money and less entrepreneurship).