A startup doesn't need to be a unicorn • Hacker News Board

Re: A startup doesn't need to be a unicorn

#291

Post by coffeebeqn » Mon, Apr 07, 2025, 8:58 PM UTC

epolanski wrote: post #261

tptacek wrote: post #213

Earlier quoted context omitted.

You can essentially create an LLC in Delaware (from anywhere in the country) as easily as you can create an Amazon account, so that's a big claim.

You can create a full blow corporation in Delaware from Europe in an easier way that you can open here. Anyway, the benefits go beyond how easy it is to open, the most important things are moving forward with things like stock options, issuing shares, creating preferred ones, etc, etc, taxes access to funding, etc..

You’d just be moving the complexity around if you did that. If you’re residing and working in Europe then having your company in the US will cause all kinds of tax and logistical issues that you’re probably not qualified to deal with. Probably much less so than dealing with the local paperwork. Everything your company does will now be scrutinized and has to fit through two separate tax and legal systems. Nothing simple about it

Re: A startup doesn't need to be a unicorn

#292

Post by shafyy » Mon, Apr 07, 2025, 8:58 PM UTC

tptacek wrote: post #213

shafyy wrote: post #210

Earlier quoted context omitted.

I have founded multiple companies in Germany and in the US. Sure, in the US you have services like Stripe Atlas that make it a bit easier. But still, I would not say it's much crazier registering a company in Germany compared to the US. Of course, it helps if you have a bit of an idea of legal concepts and accounting, but to be honest, that also makes sense, since you are starting a business. This is not to say that…

You can essentially create an LLC in Delaware (from anywhere in the country) as easily as you can create an Amazon account, so that's a big claim.

You still need to deal with business registration, taxes, accounting and so on.

You can also create a GmbH in Germany by downloading a few free templates from the internet and making an appointment with a notary. It's a bit more expensive than creating an LLC, but not significantly (maybe a few hundred dollars).

Especially since most of the cost come from running the business (tax filings, accountings, business registrations) and not the initial founding costs.

Re: A startup doesn't need to be a unicorn

#293

Post by mediaman » Mon, Apr 07, 2025, 8:59 PM UTC

milesrout wrote: post #272

mediaman wrote: post #259

Earlier quoted context omitted.

Yes, this is what every venture capitalist says. You aren't doing a startup unless you want extreme growth, which requires our services and cuts us in. Building in a capital efficient way that generates substantial wealth for founders, but without giving VCs a cut of the pie, is, of course, "not a real startup," and often also slandered as a "lifestyle business" for low-ambition people. PG is great in many ways but h…

It is the definition of the word. Nowhere does pg say you can't start a non-startup business. >The founders I'm particularly impressed with are the ones who have such a nuanced understanding of capital efficiency that they do not require VC, and only take money much later in the cycle That isn't "understanding capital efficiency" it is called having enough capital already.

Your comment seems to suggest that you don't see any difference between "capital efficiency" and "having capital."

The terms mean very different things. Capital efficiency is measured by metrics such as the cash conversion cycle. It's possible to design a business model in such a way that you have negative cash conversion cycles, which cause you to actually generate cash as a function of growth (even when unprofitable by GAAP!), which is the opposite of most VC funded businesses whose burn rate is roughly a function of their growth rate.

Re: A startup doesn't need to be a unicorn

#294

Post by clusterfook » Mon, Apr 07, 2025, 9:07 PM UTC

datavirtue wrote: post #161

First time on substack, apparently first time writing also. Enough undefined acronyms to get an 8th grader smacked.

Abbreviations :-) being defined or not depends on the audience, so it is not a law that you need to define them. PMF (product-market fit) and GTM (go to market) I would define though.

Re: A startup doesn't need to be a unicorn

#295

Post by cmgriffing » Mon, Apr 07, 2025, 9:08 PM UTC

summarity wrote: post #9

Here's a model that exists in Germany, which I like: You can present a business plan to the state's investment bank and apply for several financial aides, including: * 1.5 years of universal basic income for you plus up to 2 other people. It's a tiny amount of money, but the point is to free you up to invest your actual time an money into the business. You do not have to pay this back. * up to 20k EUR in "consulting…

I would love to know of some of the companies you know of that have gone this route. Maybe nothing we've heard of, but still sounds interesting.

Re: A startup doesn't need to be a unicorn

#296

Post by ChadNauseam » Mon, Apr 07, 2025, 9:20 PM UTC

summarity wrote: post #34

nottorp wrote: post #31

Earlier quoted context omitted.

You still need the 25k to register a LLC or whatever the acronym is in Germany, right?

No that's for a full GmbH. You can start with an "UG", which realistically needs maybe 1500 EUR to get registered and up and running. Then, a certain percentage of the profit is contributed towards the 25k (of which in turn only 12.5k have to be deposited in cash) each financial year. If the threshold is met, you can convert from UG to GmbH.

This sounds crazy to me. What is the €25k for? Hell, what is the €1.5k for? Is there some advantage to this system when compared to the US one where I can start an LLC for $35 or a C-corp for a couple hundred?

Re: A startup doesn't need to be a unicorn

#297

Post by bgnn » Mon, Apr 07, 2025, 9:24 PM UTC

dinoqqq wrote: post #265

pembrook wrote: post #229

Earlier quoted context omitted.

> but I also think hiring someone for [government paperwork] would be the wise choice in most places anyway. I’m not sure if you’ve ever tried founding a business or fundraising in any other non-Germany country, but this is an insane thing to say imo. Is this why Germany has no globally relevant software (or hardware tbh) companies founded in the last 40 years? Are we sure we want to be holding up this model as an ex…

You probably missed SAP then. > The company is the largest non-American software company by revenue and the world's third-largest publicly traded software company by revenue. As of December 2023, SAP is the largest German company by market capitalization. https://en.m.wikipedia.org/wiki/SAP

Siemens is also huge in software.

AUTOSAR alliance is an organization based in Germany defining automotive ECU software architectures. Most automotive SW development is happening in Germany.

Re: A startup doesn't need to be a unicorn

#298

Post by zupa-hu » Mon, Apr 07, 2025, 9:53 PM UTC

istvanmeszaros wrote: post #89

I am a big believer in Seed-Strapping. You need some initial capital to get you started (can be as low as a few months of your own salary). But you should aim to bootstrap your solution.

Seems like you are a startupper from Hungary? Shoot me a mail, I love getting to know other local startuppers. (in profile)

Re: A startup doesn't need to be a unicorn

#299

Post by bbor » Mon, Apr 07, 2025, 10:10 PM UTC

garrickvanburen wrote: post #270

I'm always conflicted about this because it's like saying the sky is blue. Stepping outside of the VC startup bubble, we see small self-funded businesses are the norm. It's the neighborhood businesses all around us. 82% of all US business have https://forstarters.substack.com/p/for-starters-10-the-three... 99.976% of new businesses don’t raise venture capital. https://forstarters.substack.com/p/for-starters-32-start-…

I'm guessing you know this, but for those new to the terms: what this post describes as the "VC route" and the "bootstrap route" are usually referred to as "growth businesses" and "lifestyle businesses" (i.e. pays for the lifestyle of the founders).

As a big believer in the need for syndicated worker's coops, I think this basic distinction is a pretty great radicalization tool against the current system ;)

Re: A startup doesn't need to be a unicorn

#300

Post by jjcm » Mon, Apr 07, 2025, 10:16 PM UTC

gamblor956 wrote: post #256

jpfr wrote: post #138

Earlier quoted context omitted.

I just founded in Germany. The paperwork is … okay. Not much more crazy than tax returns or internal accounting you need to do in any jurisdiction. But yes, running any organization is a lot of work.

In terms of tax craziness (most crazy to least): 1) India. Lots of conflicting laws. Lots of conflicting paperwork. And as a foreign company you'll probably pay more in bribes ("voluntary non-disclosed payments to ensure success") than you would in taxes, because the alternative is that they send the police after your local employees and maybe try to have the local court seize your property. 2) EU. The VATOSS is stra…

Huge +1 to Australia, speaking from a salary worker PoV. So many of the Australian digital services are absolutely fantastic. As an American who was working there, there were often situations where I thought I did something incorrectly because my mentality was, "if it was this easy, I did something wrong and there are more steps".

It often literally is that easy.