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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

#191

Post by karaterobot »

euorme wrote: post #154
_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…

You're cheating the system, though. The system exists in order to support the way of life in these countries, by bringing your American employment attitudes to Europe you're not really building a company in Europe by any measure: you're building an American company. Your company is benefitting from the robust systems in Europe, without contributing. There are people you want to hire in Europe _because of people payin…

Does cheating the system just mean you disagree with it, or do you maintain that he's breaking the law? Or that regulators aren't aware of this practice? I'm not sure what cheating means here: usually it means breaking the rules, but that's not happening based on what he described.

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

#192

Post by mattmanser »

karaterobot wrote: post #191
euorme wrote: post #154

Earlier quoted context omitted.

You're cheating the system, though. The system exists in order to support the way of life in these countries, by bringing your American employment attitudes to Europe you're not really building a company in Europe by any measure: you're building an American company. Your company is benefitting from the robust systems in Europe, without contributing. There are people you want to hire in Europe _because of people payin…

Does cheating the system just mean you disagree with it, or do you maintain that he's breaking the law? Or that regulators aren't aware of this practice? I'm not sure what cheating means here: usually it means breaking the rules, but that's not happening based on what he described.

What he's doing is not legal, and legally tax avoidance, in a lot of European countries.

What he's describing is known as a disguised employee/employment, and they or all their workers (probably their workers if they're operating as 'companies') might suddenly find themselves open for massive tax bills for unpaid employment taxes in their country.

On top of that, this setup is open for the disguised employees being able to sue the company for unpaid holiday + benefits.

Probably never get noticed at that scale though. And can't say for certain as he hasn't listed the country, but if this was happening in the UK, I'm 90% certain it'd be classified as tax avoidance in the UK, and all the 'employees' would be on the hook for something like 14% employer national insurance contributions. The big problem HMRC would have is that no-one's paying the employer NIC, and as his employees are officially the companies, they'd be on the hook for it.

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

#193

Post by missedthecue »

dgudkov wrote: post #153
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…

That's exactly my thoughts recently. As it appears, American venture capital simply can't build a big social media company that doesn't end up being a surveillance-driven, ad-ladden, privacy-hostile, user-despising, fake virtue-signalling behemoth. So maybe it's time for Europe to shine.

Maybe what Americans have built is exactly what people who aren't HN users want. The numbers would seem to say that.

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

#194

Post by bingohbangoh »

biztos wrote: post #163
euorme wrote: post #154

Earlier quoted context omitted.

You're cheating the system, though. The system exists in order to support the way of life in these countries, by bringing your American employment attitudes to Europe you're not really building a company in Europe by any measure: you're building an American company. Your company is benefitting from the robust systems in Europe, without contributing. There are people you want to hire in Europe _because of people payin…

I wouldn’t say he’s not contributing, I’d say he doesn’t have employees. Same would be true if he has his “team” on 1099 in the US. Outside of any moral questions, the risk here is that the government may decide your group of happy startup contractors are in fact employees, and then you’re in for some massively distracting and expensive restructuring (at best) or legal sanctions and maybe losing your team (at worst).…

There are lots of laws over if your employee is a contractor or full-time. Many, _many_ companies butt heads with local labor boards who decide that a given employee is actually full-time and thus entitled to a bunch of different protections.

Many regulations either don't exist in Europe or are under-enforced. For instance, Germany did not outlaw insider trading until ~2003. There's a strong chance that an American hiring a contractor in, say, Romania will simply not be prosecutable while an American hiring a contractor in America will be. There's some legal term of art for this that I can't recall off-hand.

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

#195

Post by peoplefromibiza »

ToJans wrote: post #100
stevoski wrote: post #88

Earlier quoted context omitted.

> “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?

We're probably about the same age, so let me ask you this: have you ever heard or seen a European person (who failed a business he or she depended on) carrying his or her failure like a badge of honor? In my experience with job interviews (from both sides of the table) people tend to be ashamed, or they assume you should be ashamed about it. As for me personally, I like sharing both my failures and my successes, and…

I am that European.

There are 513 million people in Europe spread over 28 countries, excluding Russia.

Have you met all of them?

In my 25 years of experience in the field, the opposite is true.

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

#196

Post by peoplefromibiza »

ToJans wrote: post #114
stevoski wrote: post #106

Earlier quoted context omitted.

> We're probably about the same age, so let me ask you this: have you ever heard or seen a European person (who failed a business he or she depended on) carrying his or her failure like a badge of honor? Yes, I have.

Ok; point taken. Would you tend to agree that the majority is or expects you to be ashamed about it, or is that not what you experience?

The majority of them have experienced failure, just like everybody else.

What they are (require to be) ashamed of is tricking the system or running illegal businesses that lead to the aforementioned failure.

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

#197

Post by brnt »

eplanit wrote: post #188
euorme wrote: post #154

Earlier quoted context omitted.

You're cheating the system, though. The system exists in order to support the way of life in these countries, by bringing your American employment attitudes to Europe you're not really building a company in Europe by any measure: you're building an American company. Your company is benefitting from the robust systems in Europe, without contributing. There are people you want to hire in Europe _because of people payin…

Since when is "the system" the thing that is supposed to win? To me, it seems more like the system is cheating the startup. There's validity in working around or gaming systems so that a company has a chance of growing and thriving. The tactics used (contractors instead of employees, etc.) are perfectly legal. People are getting paid per an agreement, and they spend their income in their country/society, which disper…

I usually forgive Americans for not knowing this, but 'the system' is something we've built up together to help ourselves and organize ourselves. Unemployment is a statistically calculable fact, so we can plan for it.

That systems tend to start living their own lives is of course the challenge, because indeed the point of this system is not the system, but to help ourselves. Like democracy, it requires indefinite maintenance, upgrades and changes. But that does not mean it's bad, it means people are a hard problem.

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

#198

Post by euorme »

karaterobot wrote: post #191
euorme wrote: post #154

Earlier quoted context omitted.

You're cheating the system, though. The system exists in order to support the way of life in these countries, by bringing your American employment attitudes to Europe you're not really building a company in Europe by any measure: you're building an American company. Your company is benefitting from the robust systems in Europe, without contributing. There are people you want to hire in Europe _because of people payin…

Does cheating the system just mean you disagree with it, or do you maintain that he's breaking the law? Or that regulators aren't aware of this practice? I'm not sure what cheating means here: usually it means breaking the rules, but that's not happening based on what he described.

Every country within Europe is different in some capacity so it's difficult to say with absolute certainty that he is breaking the law -- the language in my comment was vague because I'm mostly addressing the spirit of his behaviour, rather than the law. That said, certainly in my European country he would be open to issues with the tax authority if he were to attract their attention.

The United States is very permissive when it comes to employment, the majority of states could be described as "anything goes" (relative to Europe) and so dodging employment taxes is pretty much fair game... whereas in Europe a lot of regulation exist very specifically to address companies organising their business in this way. I'd be very surprised if he didn't face significant fines (I don't know of any examples of this behaviour leading to prison terms, but significant fines are very common and serve as a deterrent).

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

#199

Post by euorme »

eplanit wrote: post #188
euorme wrote: post #154

Earlier quoted context omitted.

You're cheating the system, though. The system exists in order to support the way of life in these countries, by bringing your American employment attitudes to Europe you're not really building a company in Europe by any measure: you're building an American company. Your company is benefitting from the robust systems in Europe, without contributing. There are people you want to hire in Europe _because of people payin…

Since when is "the system" the thing that is supposed to win? To me, it seems more like the system is cheating the startup. There's validity in working around or gaming systems so that a company has a chance of growing and thriving. The tactics used (contractors instead of employees, etc.) are perfectly legal. People are getting paid per an agreement, and they spend their income in their country/society, which disper…

As a sweeping generalisation: Europe has chosen to value more stable employment opportunities with lower potential upside over highly volatile employment opportunities with larger potential upside. America has chosen the opposite. You're speaking as if there's an absolute truth in which model is better, but as we're finding in this very thread, American people are coming to Europe to build businesses (and Europeans are going to America to do the reverse).

I won't rehash what brnt has said in their reply, but I will echo their sentiment: The System is me and my friends and my family and my co-workers working together to provide healthcare and education and security to each other. I pay taxes for that reason.

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

#200

Post by _-david-_ »

WastingMyTime89 wrote: post #161
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.

> The US private VC model is superior in every way. You do realize that most of the innovation the US pride itself about was in fact directly funded by the state through DARPA, the NSF, NASA and military contracts: Fairchild Semiconductor, the internet, Google, Space X, Moderna...

The government isn't funding a lot of those things now. Also, Europe has access to the new technology that came out of the US government funding so it is irrelevant to bring it up. Europe has access to the internet, they have a space program, etc.
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