| EU has plenty of VC, maybe not enough to sustain crazy rounds rounds like those we see often in the US, but capital is not the biggest blocker to founding your company in Europe, law is. US has a very advanced corporate law, which is crucial in protecting investors, founders, employees and shareholders. In Italy and most of Europe, if I create a startup, there is *no* legal way to give people stock options. I am bound to give it upfront, or the employees are bound to believe they will receive some. Even a legal contract signed at a notary cannot enforce stock options mechanisms 100%. And this is a problem also for raising equity by the way. There's no C-Corp equivalent for low capitalized companies (e.g. any young startup) and emitting shares at small scale is borderline, as is cancelling shares after a buy back (which is why they are uncommon in European stock markets, it's feasible but very complicated). This has been the killer of a startup of some friends of mine. They split a company in 3 and then one of the 3 left after some months and retained all of the equity and benefits without doing nothing and effectively held the company hostage for years pretending a huge exit. They had troubles raising equity because of him as well. On top of that, in Italy, worker's protection is such that if you hire the wrong person and that person stops working after the brief period you can cancel the contract (generally 3 months) it's your problem and it's up to you to prove you had a valid cause. Even when you have and provide carrots for your employees and coworkers, there's no stick. You're at the mercy of lucking into the right people. And, on top of that, you have taxes. Just to make an example. In Italy, it costs a business 70k euros to give 30k net to an employee. How am I supposed to compete for international talent if, even if I had the money to pay them very well and compete with higher cost of living countries, I then get hit by a truck of taxes? And that's not even mentioning corporate taxes. And, bureaucracy is another issue. Let that sink in: it's easier for me in Italy to create a C-Corp in Delaware than create a basic ltd in my own country. And that bureaucracy scales at every level of your operations. And, last but not least, the EU is still a fragmented market where regulations change dramatically as you cross borders. Scaling in the EU is hard in virtually every business, the unified market is just not there. But every country and government will repeat populist propaganda that "we do our own way and protect only our interest, we won't delegate to Bruxelles". UK is the only feasible place in Europe to make a startup, but even UK does not have as strong and mature corporate law as US does. Pre Trump, if I had to found a company I would've just went with a Delaware C-Corp, even if I didn't need venture capital, let alone if I did. Nowadays being a US company is increasingly risky, so I would probably look at Malta or UK. |