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The Globalization of Venture Capital Investing

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Re: The Globalization of Venture Capital Investing

#21

Post by disgruntledphd2 »

toyg wrote: post #20
R0b0t1 wrote: post #18

Earlier quoted context omitted.

I have a lot of friends and acquaintances in Europe. From the ones who tried to start a business I have been told the issue is taxes and regulation. It is nearly impossible for someone with limited initial income to maintain the appropriate legal entities. The overhead you pay just for existing in Europe makes small European businesses noncompetitive. There are other valid issues highlighted here, but first and forem…

As a counterpoint - that's not what I've experienced in the UK. I know it's arguably one of the "friendliest" legislations, but still, red tape wasn't a big deal. From what I heard from others, the main issue is access to credit and funding. European investors are risk-averse and ask for too much in return, probably because their experience is in traditional low-margins sectors; sadly that's a vicious circle, where l…

Europe is not a coherent place, much of the important regulations are national. At the very least, one should divide between Northern/Western Europe (more entrepreneurial) and Southern Europe (more regulations, less money and less entrepreneurship).

Re: The Globalization of Venture Capital Investing

#23

Post by redis_mlc »

sdesol wrote: post #17
alfl wrote: post #14

Globalization of VC is great for America, American investment firms, and startups in other countries. America gets a slice of the best, worldwide, and it helps companies that are often fighting uphill in their local markets. As a founder who has raised in Canada and is now raising in America: the cultural difference is night and day. America has significant advantages in willingness to take risk and the amount of cap…

I'm raising in Canada. Can you share some of what you have seen? My info is in my bio. Thanks.

The US is special because it has active startup investors in both SV and Boston/NY, and angels with extreme risk tolerance (Conway, Woz.)

Canada is no worse and no better than any non-US country - meaning terrible. (With the exception of the Skype/Estonia connection.) Some Western European countries have rigid pension contribution requirements that make non-family-staffed startups impossible.

In many parts of the world, it's all about personal/school/family connections with inherited wealth (India, China, Korea, SE Asia, etc.)

Here's some examples of what works in Canada:

- ActiveState was funded by Microsoft to improve Open Source tools for Windows

- Canada has an entire national ecosystem around aerospace that is govt. funded (Bristol, Bombardier, etc.) The govt. scientists partner/adjunct with local universities, so you can approach them on campus.

- Ottawa once had a telco industry, now replaced with Shopify HQ execs. So reach out to them.

- But it's friends and family/mortgage your house/credit cards for funding otherwise. Any Canadian banker will suggest a heloc, and won't loan money without equal collateral.

Re: The Globalization of Venture Capital Investing

#24

Post by R0b0t1 »

toyg wrote: post #20
R0b0t1 wrote: post #18

Earlier quoted context omitted.

I have a lot of friends and acquaintances in Europe. From the ones who tried to start a business I have been told the issue is taxes and regulation. It is nearly impossible for someone with limited initial income to maintain the appropriate legal entities. The overhead you pay just for existing in Europe makes small European businesses noncompetitive. There are other valid issues highlighted here, but first and forem…

As a counterpoint - that's not what I've experienced in the UK. I know it's arguably one of the "friendliest" legislations, but still, red tape wasn't a big deal. From what I heard from others, the main issue is access to credit and funding. European investors are risk-averse and ask for too much in return, probably because their experience is in traditional low-margins sectors; sadly that's a vicious circle, where l…

The UK is the sole exception afair. It's not just access to funding because many businesses in the US are created with no external funding. If you attempt to do that in mainland Europe you're going to bankrupt yourself just setting up the company. In most US states you just pay ~$100 and can 1099 your first employees.

Re: The Globalization of Venture Capital Investing

#25

Post by dopidopHN »

R0b0t1 wrote: post #18
seibelj wrote: post #5

> It seems to me that about half of our “new deal activity” right now is happening outside of the US. And very little of it is in western Europe where most of our non-US investing has been for the last decade. I always thought the problem with European startups was lack of a VC critical mass and risk taking ethos. So I thought the globalization of VC would help, but this sounds like it’s bleaker than ever. Is it the…

I have a lot of friends and acquaintances in Europe. From the ones who tried to start a business I have been told the issue is taxes and regulation. It is nearly impossible for someone with limited initial income to maintain the appropriate legal entities. The overhead you pay just for existing in Europe makes small European businesses noncompetitive. There are other valid issues highlighted here, but first and forem…

I've been involved in the French/Parisien startup world for half a decade. If you pay taxes as a startup you missed a few turn and you should talk to a accountant. ( At least the first 5 years )

Regulations can also be a opportunities. Your client might start dedicating money to fulfill that regulation. If you are able to help your client with that in a timely manner, it's easy money. ( B2B setting )

To the point: Our main frustration as a high growth entity was how hard it was to jump from market to market.

We got into Spain because nobody was there, cool. let's replicate in Germany. Oups. Total failure and the brand is damaged.

Every single country is a battle that you have to understand intimately. We got a way out thought a random re-seller in Holland that started distributing us in China.

Our roadblocks were made of small market with already implanted competitor. Not regulation or taxes.

( To be fair: we were selling hard/softaware on very niche and finite market. )

Re: The Globalization of Venture Capital Investing

#26

Post by simonebrunozzi »

irjustin wrote: post #13
pedalpete wrote: post #4

Zoom and the pandemic have had an effect here, but so has the success of companies not based in the US. Atlassian, Canva, SafetyCulture (to name a few) in Australia has not only helped grow the local VC ecosystem, but also made US VCs recognize that Australia punches above it's weight. VCs new they had to make investments in Asia and South America as they saw more successes come out of those regions. Technology is gl…

> However, I believe most of these VCs still expect companies to be set-up as Delaware Corps. Anybody have any insight on that? This is rapidly becoming less true. YC stopped requiring/recommending a Delaware corp back in W20. There are countries that are more "investor" friendly where the laws about corporate ownership, governance and investment are clear, and enforceable. Singapore being one such. (Last thing an in…

> There are countries that are more "investor" friendly

Which countries?

Re: The Globalization of Venture Capital Investing

#27

Post by SMAAART »

Fordec wrote: post #12
SMAAART wrote: post #11

Earlier quoted context omitted.

It's the Golden Rule: who's got the gold (money), makes the rules.

And if your rules are to deliberately avoid opportunity, don't be shocked if somebody else makes the money not following your rules. Free market applies to the entire economy, not "the whole economy except the VC part because we're special".

Today's role-breakers are tomorrow's rile makers whose lunch will be eaten by tomorrow's rule-breakers.

And the cycle continues.

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