In the Silicon Valley it's mostly private money, this is a government fund. Not the same thing.
The real problems startups face in the EU are labor and tax laws. Companies can't use equity as compensation (which is a big lure for talent) and it's extremely hard to fire people (which makes pivoting or dealing with general market changes impossible for small companies). Pro-employee policies are necessarily anti-employer. Smaller, more innovative, companies have a harder time surviving such policies. So long as there is greater risk in EU companies, investors will take their money elsewhere.
Every company I’ve worked for has given equity as compensation here.
Opening a company is insanely easier than anywhere else I’ve been.
I can’t relate any of those factors to lack of innovation from my own experience. It must be something else?
Also, the EU has what, almost 30 different sets of tax and labour laws.
I appreciate your engagement, but this statement feels like it proves my point. In the US, startups have simple, standard, procedures for creating option pools for future employees. I had my own failed startup in the US, and never had to give a thought to how to structure equity compensation.
Edit: Thinking of it, you can even do that with GmbH in Germany by handing out equity that is tied to to the employment, at least for directors and the like. Don't ask me about the details, obviously it never came to it in my case.
The USA is riddle with complex tax rules for investment and capital gains that makes those incomes interesting for an employee. That might not be necessarily true in Europe.
What? Where do you get that? Then I better return all the equity I got.
> and it's extremely hard to fire people
I would say that is hyperbolic, unless you find anything but at-will employment "extremely hard". Small companies (<20?) in Germany, can fire people without reason. I do not know any country (Edit: in the EU), where restructuring is not a valid reason to fire someone (with a severance of 0.5-1.1 monthly salaries per year of employment).
(Edit: But then, I cannot claim to know all the labour laws in the EU)
Startups normally use options for equity compensation rather than direct shares because of the tax benefits for employees and simplicity for reporting. Options are look at more like regular shares in the EU. Can't was a bad way of phrasing it. More like shouldn't because tax laws make it a crap shoot.
> I would say that is hyperbolic, unless you find anything but at-will employment "extremely hard"...
Anything but at-will is extremely hard with knowledge work, especially for small companies.
I can't help but feel offended that you feel this way. As a technocrat, sure, let's treat employees as numbers on a sheet that we can hire and fire at will because who cares about them as people right?
Don't forget employees are people, with families, who are usually working to sustain their own lives.
It saddens me how deep this US-centric rhetoric on treating employees unfairly has gone.
The EU has done a fantastic job of respecting worker rights, from the right to disconnect, to time off / vacation from work, worker's rights for employment and having a social safety net if you become unemployed.
If you like metrics you can read the world happiness report [1] or look at how the OECD measures income inequality across the world [2], the US is below most European countries.
[1] https://happiness-report.s3.amazonaws.com/2021/WHR+21.pdf
Personally I think EU has a long way to go, but it's not all doom and gloom.
It's far from completed, but I understand some of the more important actions have been done and it's already had a significant impact.