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Y Combinator’s European founder intake continues to grow

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Re: Y Combinator’s European founder intake continues to grow

#81

Post by gyulai »

I'm wondering if this actually implies that Y-Combinator is willing to touch even with a 10-foot-pole companies incorporated in jurisdictions where company law works very differently from the U.S. For example in Germany & Austria, if a startup is organized as a GmbH ("Gesellschaft mit beschränkter Haftung"), regulations around transfer of shares and minority shareholder protections are a lot heavier than for U.S. corporations and AG ("Aktiengesellschaft") with freely-transferable shares come with a high regulatory burden in all kinds of areas.

My working hypothesis until obtaining information to the contrary is that the answer is "no", and that "European" in the article basically just means "London".

Re: Y Combinator’s European founder intake continues to grow

#82

Post by ToJans »

In my experience (Belgian guy that dabbled a bit with EU VCs for my SaaS) Europe is very risk-adverse, and you either have to give up ridiculous amounts of equity for a little amount (i.e. 50k€ for a 25% to +50% stake) when not established yet, or have a recurring revenue of at least 50k€/month to get reasonable propositions.

Also, European culture is slightly different: most people consider a startup failure as something bad that you drag along for the rest of your career.

I've talked to some European VCs, and while they have big ambitions and are starting to gain momentum, it might take a while before the shift in the European mentality happens, and we end up with a thriving ecosystem. Some hubs (Switzerland and Berlin for example) seem to be doing quite good.

I also assume a big difference with the US is the fragmented market: different languages, cultural differences, legislative constraints, market demands, ... For example, in my experience high touch B2B sales are highly impacted by the language gap, in fact some countries (France, Spain, Italy, ...) are notoriously against working with people who don't speak their mother tongue. (On the bright side most of us Belgians do speak at least 3 languages, so it is still somewhat doable.)

As an alternative to VCs in Europe, you could look at some of the national and European subsidized tracks, although they tend to be mostly coupled to the trend-of-the-decade (sustainability is hot right now), and also require quite some effort to enter with no guarantees of success. (Disclaimer: it's on my to-do list, so no real experience with this.)

I would presume the combination of all of these factors results in people looking on other continents for better opportunities.

(I personally think Africa might offer huge opportunities in the coming decades, but that's for another time.)

Re: Y Combinator’s European founder intake continues to grow

#83

Post by raverbashing »

pjc50 wrote: post #59
Grustaf wrote: post #50

Earlier quoted context omitted.

> On the top of that, regulation in the EU is much worse than in the US Worse as in better for consumers and citizens, but more costly for companies that can't do exactly what they want?

EU regulation generally doesn't have "de minimis" exemptions. If you have something that takes a flat cost of €10k or €100k to comply with, that burdens small businesses much more than large businesses, and a startup is a small business in the beginning. Theoretically if you want to build an electronic product and sell one (1) unit of it in the EU you need to give it the full works of CE compliance. I don't believe U…

I was curious about this so went to Google. https://europa.eu/youreurope/business/product-requirements/l...

So it seems it's not that clear cut that you need it (and it can be self assessed). But yeah, if it's an electronic device that plugs into the wall or connects to WiFi probably yes - or at least the modules that do that)

Re: Y Combinator’s European founder intake continues to grow

#84

Post by TeMPOraL »

rapsey wrote: post #43
cblconfederate wrote: post #34

Earlier quoted context omitted.

there is also a lot of money thrown in businesses in the form of EU subsidies. YC gives a miniscule amount of money ($125K), i believe european entrepreneurs can (and do) milk naive US VCs for a lot more than what YC offers. The YC data is clear about one thing: if you remove the need to travel to the US , a lot more europeans flock to YC. We 've become a terribly sclerotic continent and it's very visible now. I beli…

> there is also a lot of money thrown in businesses in the form of EU subsidies. And that money is mostly a complete waste. EU money comes with so many strings and baggage that you are either big enough and have the resources to deal with it (and thus you don't actually need it), or you are small and make it your entire business model to live off EU funds and not produce anything of value ever.

That's unfortunate, and also ironic - most of those strings weren't there initially; they were added because of "entrepreneurs" stealing the funds and producing nothing of value.

Re: Y Combinator’s European founder intake continues to grow

#85

Post by dagw »

gyulai wrote: post #81

I'm wondering if this actually implies that Y-Combinator is willing to touch even with a 10-foot-pole companies incorporated in jurisdictions where company law works very differently from the U.S. For example in Germany & Austria, if a startup is organized as a GmbH ("Gesellschaft mit beschränkter Haftung"), regulations around transfer of shares and minority shareholder protections are a lot heavier than for U.S. cor…

You can be from anywhere but your company has to be incorporated in United States, Canada, Singapore or the Cayman Islands. If you already have a GmbH and want to join YC you have to incorporate a parent company in one of those jurisdictions and make your existing company a subsidiary of that new parent company. YC will then invest and take a stake in the parent company rather than your 'real' company

https://www.ycombinator.com/faq/

Re: Y Combinator’s European founder intake continues to grow

#86

Post by antupis »

mytailorisrich wrote: post #73
antupis wrote: post #51

Earlier quoted context omitted.

I think it is set of different problems Southern Europe and France are almost hostile to entrepreneurship and startups. Nordics, Baltic and Benelux countries mostly nail culture and regulatory frameworks but small markets slows down starting and scaling business. Personally I don't know what is problem with Germany probably something to do with how German is organised around manufacturing.

In my experience the UK has a very simple and friendly system and, I believe, London has grown into an European centre for startups and funding. France makes things overly-complicated and costly for the sake of it, not just for entrepreneurs but for everyone, this is very puzzling (and I was born there!).

Yeah did not add UK because Brexit but I agree that UK and especially London is best location to start startup in Europe.

Re: Y Combinator’s European founder intake continues to grow

#87

Post by p4bl0 »

oblio wrote: post #30
aardshark wrote: post #25

Earlier quoted context omitted.

I'm fairly sure you have the right to a bank account under French law, but banks have the right to refuse you as a client. This means that if you get rejected as a client by enough banks you can go to the Banque de France and they will select a bank that is then obligated to provide you with an account.

I don't get why they'd refuse you a checking account, even if you were the founder or one (or several bankrupt) companies. Would they be worried you wouldn't pay their crummy fees? :-)

In practice they don't. The comment to which you reply is 100% correct.

Re: Y Combinator’s European founder intake continues to grow

#88

Post by stevoski »

ToJans wrote: post #82

In my experience (Belgian guy that dabbled a bit with EU VCs for my SaaS) Europe is very risk-adverse, and you either have to give up ridiculous amounts of equity for a little amount (i.e. 50k€ for a 25% to +50% stake) when not established yet, or have a recurring revenue of at least 50k€/month to get reasonable propositions. Also, European culture is slightly different: most people consider a startup failure as some…

> “European culture is slightly different: most people consider a startup failure as something bad that you drag along for the rest of your career.”

I hear this over and over, but in my 20 years of living in Europe, I haven’t found this to be the case.

Perhaps it is only in some European countries or cultures?

Re: Y Combinator’s European founder intake continues to grow

#89

Post by dmitriid »

cblconfederate wrote: post #72
dmitriid wrote: post #53

Earlier quoted context omitted.

> there is also a lot of money thrown in businesses in the form of EU subsidies. Show me any subsidy in the EU that supports a business losing 500 million dollars a year for 10 years. > We 've become a terribly sclerotic continent No. The US has become reckless with money, and the concept of a successful business has been entirely substituted by "but this unbelievably unprofitable company with no chance of ever earni…

> that supports a business losing 500 million dollars a year for 10 years. That assumes that those startups get investment from outside YC , which is not what i m talking about. Also, the EU just approved a giant stimulus package which will be used to support a lot of failing companies, just take a look at the air carrier subsidies around the continent. It's true that US is subsidizing unsustainable businesses, proba…

> That assumes that those startups get investment from outside YC

Yes, they do. And that's the main difference between the EU and the US. Especially with YC startups expect to get significant investments after the incubator.

> Also, the EU just approved a giant stimulus package which will be used to support a lot of failing companies

You do realize there have been two years of pandemic?

> But that doesnt change the fact europe is repelling entrepreneurs.

What's your definition of entrepreneurs? A company that always loses money "in the hopes that something good will come out of them"?

The EU is a complex multi-lingual multi-cultural market unlike the uniform US market flooded with unlimited investor money. All of the "successful" incubators, investors, startups would fail miserably here, outside their near-ideal conditions.

Re: Y Combinator’s European founder intake continues to grow

#90

Post by qwerty456127 »

gyulai wrote: post #68
qwerty456127 wrote: post #8

Earlier quoted context omitted.

AFAIK banks are legally required to open checking accounts on demand of any resident in Germany, no matter their background. But I am not sure, just a rumor.

Not just a rumor. If you speak the right incantations at the counter, invoking the relevant legal reference, a bank in Germay will be obliged to give you a "basic bank account" with no credit facilities of any kind. There's also nothing stopping them from making that bank account the least attractive bank account you've ever heard of by charging insanely high fees and prohibiting you from using the regular ATM networ…

> If you speak the right incantations at the counter, invoking the relevant legal reference

What are these?

> There's also nothing stopping them from making that bank account the least attractive bank account you've ever heard of

Why would they want to? What do they actually risk?

> restricting you to just a few machines in a restricted geographical area.

Officially area-specific or just through the specific kind of machines accepting specific kind of cards being absent outside of it? I've heard of the unreasonably complicated system of types of cards in Germany: normal debit, "electronic cash" etc.

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