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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

#131

Post by tester34 »

pembrook wrote: post #124
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…

Europe’s lack of competitiveness in tech has been true pretty much since the birth of Silicon Valley. It was the same with the PC business back in the 80s and 90s. Here’s an article from the New York Times in 1996, struggling to understand why European PC manufacturers were all failing to expand outside their home markets: https://www.nytimes.com/1996/10/07/business/why-european-com... 25 years later, the story is th…

>failed to create an internationally relevant social media company

Those are pros or cons?

>Tech salaries in Europe are now just 1/5th of what they are in Silicon Valley.

Are SV salaries 5 times higher than in Zurich or London? seriously? or you're talking about peak of peak of peak?

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

#132

Post by ToJans »

eyko wrote: post #127
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…

You can't paint all of Europe with the same brush, and whilst most of Europe may be in the single market, they're not the "same" market. In my experience, there is a high variance amongst European countries (Eurozone or not) in risk-aversion vs risk-tolerance, which seems to be echoed in some studies/observations[1]. I've never really been able to see what the main factors that determine this may be -- I used to thin…

Interesting line of thought; another POV that emerged during a late-night discussion a while ago, was to look at the percentage of people that work in public service in each country.

We assumed that, the closer the percentage was to the median, the more risk-averse people would be (assuming the median represents some optimal size for the government).

We never validated the idea though; I'm quite curious to see how that would hold up after verification.

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

#133

Post by libertine »

stevoski wrote: post #88
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?

Well the question that might be cynical is: do they actually mean it?

Like saying, "oh at least you tried!"/"good for you!"/"you learning something right!"?, this is something I get.

No one ever asked, "What went wrong, what went right?" / "What did you learn, what would you do differently?" / "Next time you'll try something hit me up!" / "I have something I'm working on, check this out, are you interested?" / "We should talk more about this"

You may say, those are different types of persons, one shows support the other shows curiosity and drive - but in the case of the latter they actually care and are "invested" in your failure as well to the point they'll give up some of their time and attention to ask about it, so they can learn something from your experience as well.

What we lack in Europe aren't patting on the back, it's actually to value the experience of failure.

It's "easy" to say nice words.

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

#134

Post by _fizz_buzz_ »

antupis wrote: post #4

This is basically failure in European startup ecosystem that companies needs to go SF, but good for Y Combinator and SF that they can attract best talent.

If the headline had been "only 1% of Y Combinator startups are European", there would have also been a comment on how this was a failure of the European startup ecosystem ;)

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

#135

Post by cblconfederate »

dmitriid wrote: post #109
rapsey wrote: post #93

Earlier quoted context omitted.

The root of the problem is that the EU funding system is just a bad way of going about funding innovation. The US private VC model is superior in every way.

How is it superior? I linked to a description of YC's top companies: they lose hundreds of millions of dollars a year . Aren't successful companies supposed to, you know, earn money and turn a profit? Or is superiority is strictly in the amount of money thrown at unbelievably unprofitable companies?

> How is it superior?

First, you have to compare EU today with US of the 00s when there were actual new ideas in the market and profitable companies. The current US startup market may have been taken over by grubby marketers who market themselves as entrepreneurs, they may be buying their way to user growth, and may fail, but it doesnt matter. Because the big guys have cornered and monopolized every fundamental infrastructure , are already bringing in tons and tons of cash, and basically guarantee the cash flow towards that ecosystem ... forever. Whatever money is burnt in AWS ends up back in the same SV ecosystem. That's sustainable.

Now, take for example the EU's H2020 system that funds partnerships between academia and industry. There are a lot of fancy proposals in there, with fancy names and fancy-sounding tech. And most of them deliver exactly what they describe in the proposal. If you look closely, most of the projects are minimum and viable, but they are not products. And when the project ends, there isn't a push to continue the project if the partners don't want to, even the bureaucrat in charge of it may be a different person at that time. While on the other hand , a VC acts as a permanent point of reference who has long-term-interest and investment in seeing the idea bear fruit.

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

#136

Post by pembrook »

tester34 wrote: post #131
pembrook wrote: post #124

Earlier quoted context omitted.

Europe’s lack of competitiveness in tech has been true pretty much since the birth of Silicon Valley. It was the same with the PC business back in the 80s and 90s. Here’s an article from the New York Times in 1996, struggling to understand why European PC manufacturers were all failing to expand outside their home markets: https://www.nytimes.com/1996/10/07/business/why-european-com... 25 years later, the story is th…

>failed to create an internationally relevant social media company Those are pros or cons? >Tech salaries in Europe are now just 1/5th of what they are in Silicon Valley. Are SV salaries 5 times higher than in Zurich or London? seriously? or you're talking about peak of peak of peak?

If we’re talking Zurich specifically, the difference would probably only be 2-3X less than FANMAG/ETC. London salaries are high too (not Zurich levels from what I’ve seen), but that market is now separate from the EU.

But most places in Europe with tech scenes and outsized VC investment, eg. helsinki, stockholm, berlin, amsterdam, etc you’re talking 5X less salary than in Silicon Valley.

Given the tech talent in those cities, there must be some arbitrage opportunity there.

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

#137

Post by [deleted] »

ggrrhh_ta wrote: post #130
_qsgk wrote: post #116

I am an American founder that accidentally built a company in Europe. I hired my first person there, and through the path of least resistance, most of our 45 person team is based in Europe. I believe I am playing 'business' on easy mode compared to European founders. As an American founder it's pretty easy for my US company to pay my European team as contractors. European founders have to comply with European employm…

Which European country are you referring to?

[deleted]

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

#138

Post by teekert »

ggrrhh_ta wrote: post #130
_qsgk wrote: post #116

I am an American founder that accidentally built a company in Europe. I hired my first person there, and through the path of least resistance, most of our 45 person team is based in Europe. I believe I am playing 'business' on easy mode compared to European founders. As an American founder it's pretty easy for my US company to pay my European team as contractors. European founders have to comply with European employm…

Which European country are you referring to?

The 1 year parenting leave makes me think Norway? Or anything Scandinavian at least… here in the Netherlands it’s something like 16 weeks for women and 7 days for men? It was 2 days last year but it recently changed.

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

#139

Post by another-dave »

_qsgk wrote: post #116

I am an American founder that accidentally built a company in Europe. I hired my first person there, and through the path of least resistance, most of our 45 person team is based in Europe. I believe I am playing 'business' on easy mode compared to European founders. As an American founder it's pretty easy for my US company to pay my European team as contractors. European founders have to comply with European employm…

This sounds really odd to me (UK-based, previously was contracting) — if someone is hired as a contractor, normally your company would be engaging their limited company as some type of consultancy arrangement.

So you wouldn't have any maternity leave or paid time off at all. In fact, from the contractor's point-of-view, you'd want to run a mile from these things as if the revenue believed you were a de facto employee (since you're getting company benefits) your tax liability would balloon.

But see no reason that a European founder couldn't hire freelancers/contractors in the same way that your company does.

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

#140

Post by pavlov »

_qsgk wrote: post #116

I am an American founder that accidentally built a company in Europe. I hired my first person there, and through the path of least resistance, most of our 45 person team is based in Europe. I believe I am playing 'business' on easy mode compared to European founders. As an American founder it's pretty easy for my US company to pay my European team as contractors. European founders have to comply with European employm…

As contractors, your employees are liable to pay those taxes themselves. Hopefully you’re paying them at least 50% above market rate, so there’s no problem.
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