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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

#101

Post by dmichulke »

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 is very risk-adverse

I'd say it depends. I lived in several places and my feeling is that the bigger and more cosmopolitan the city is, the less it is risk adverse.

So the worst is usually the countryside or towns and cities far away from any border and with no particular significance.

> big difference with the US is the fragmented market: different languages, cultural differences, legislative constraints, market demands

The Germans tried to address this in the 1940s, but no one seemed interested. /s

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

#102

Post by yaseer »

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…

My experience also correlates with this, raising in Europe and from YC.

The European ecosystem is focused on well-understood business models, and is less likely to fund something disruptive and novel. It's probably epitomised by the Samwer brothers' cloning American businesses like eBay.

If you want to build a well-understood Enterprise SaaS company, I think the European ecosystem will suite you fine.

If you want to try a crazy idea, like renting out Air beds to people in your living room, you're better off in SF.

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

#103

Post by [deleted] »

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…

[deleted]

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

#104

Post by gyulai »

qwerty456127 wrote: post #90
gyulai wrote: post #68

Earlier quoted context omitted.

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…

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

> What are these?

"Basiskonto nach § 31 Zahlungskontengesetz" [1], and tell them that you are aware that the regulator BaFin has a specific process in place for complaints about banks who refuse an application for a basic account [2]

> > 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?

My theory is that it has to do with outdated technology in the German banking sector that implies that it's actually impossible for them to make absolutely sure through technology that your account can't end up in overdraft.

> > 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.

The reasons are a bit difficult. In Germany there is the "Sparkasse", which is a network of small banks local to municipalities and where the municipalities have large ownership stakes (so it's weirdly-state-owned). They are legally separate but share a backoffice. Last time I did research on this the situation was this: The Sparkasse-network has more than twice as many ATM-machines than all the other banks (like Commerzbank, Deutsche Bank, foreign banks) combined. A normal bank account at one of the branches of Sparkasse will give you access to their whole network. But a basic bank account will only give you access to the ATM machines by that specific branch, which ends up being highly restrictive geographically. If you get a normal bank account from, say, Commerzbank, you can use the entire network of non-Sparkasse-ATMs, i.e. use all Commerzbank-machines countrywide, plus all Deutsche Bank machines, etc. But if you get a basic account, they'll restrict you to just the machines by Commerzbank, which are few and far between, but, at least that would give you some semblance of country-wide coverage. ...long story short, life really sucks with a basic bank account, even if you don't want/need credit.

[1] http://www.gesetze-im-internet.de/zkg/ZKG.pdf

[2] https://www.bafin.de/SharedDocs/Downloads/DE/Formular/dl_fo_...

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

#105

Post by robinhouston »

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…

I suspect it’s a mistake to treat Europe as homogeneous in this respect. As a startup founder in the UK, this does not match my experience in any way at all.

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

#106

Post by stevoski »

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…

> 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.

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

#107

Post by yaseer »

robinhouston wrote: post #105
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…

I suspect it’s a mistake to treat Europe as homogeneous in this respect. As a startup founder in the UK, this does not match my experience in any way at all.

Also UK-based. The UK is culturally somewhere between the US and the EU in my experience.

UK investors are less risk-averse than Germans, but still not quite the same as SF.

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

#108

Post by RobertoG »

StreamBright wrote: post #71
RobertoG wrote: post #24

Earlier quoted context omitted.

It seems to me that this article is saying exactly the opposite of what you say. The article is about how Europeans, that live in that "safe and secured society", are creating more startups than before. >>"On the top of that, regulation in the EU is much worse than in the US. This does not help either. " If you check those start-ups you can see that most of them are joining Y-combinator but they stay in Europe. So, a…

>> "safe and secured society" What is the distribution of Eastern vs Western Europeans in the sample?

==Cyprus== Malloc

==Denmark== Gamerpay , Female Invest , Zoios

==Estonia== Membo

==France== Whaly , Carbonfact , Numary , Café , Hera , Crew , PaletteHQ

==Finland== Kapacity.io

==Germany== Snowboard Software , Moving Parts , QOA , HeyCharge

==Ireland== Luminate Medical , Noloco , Protex AI

==Netherlands= Quest , Orderli , Echoes HQ

==Poland== Enso

==Romania== Archbee

==Spain== Solarmente , Payflow , Arengu

==Switzerland== Pabio , Adaptyv Biosystems

==UK== Appollo , Shopscribe , Digistain , Abatable , Heimdal , StudyStream , Teamspace , Genei , Sitenna , Onfolk , SigmaOS

==USA== Beau , Iona Mind , Synder , Awesomic

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

#109

Post by dmitriid »

rapsey wrote: post #93
TeMPOraL wrote: post #84

Earlier quoted context omitted.

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.

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?

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

#110

Post by gyulai »

dagw wrote: post #85
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.yco…

Thanks! That's a neat legal mechanism there. Should have thought to look there myself.
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