Ferrari owner Exor wants to build the Italian Y Combinator
sifted.eu
sifted.eu
these two things alone and the fact there are better places in europe to make a startup (hint: netherlands, germany, france, czech republic, romania, poland) makes me wonder if they will succeed or is this a way to collect IP rather than helping idea to grow? maybe they saw that this is exactly what most of incubators are doing, in the end lots of startups in Italy were made by university professors making startups out of a research paper from one of their student, so i can see why an incubator could be interested in this.
yes i know, sorry for the negativity i've been there and i experienced this first hand.
And the education of your worker's is paid by the government, so you don't get employees that are desperate to pay their student loans.
And so is healthcare, so you don't have to pay no insurance (you may, but your workers don't depend on it).
Also, new companies can easily get public funding. Or loans with no interests that are covered by the government. Do companies in different countries get that? Can you get millions in loans at 0 interest that if you can't pay the government will in US?
New companies get a very friendly, near 0 taxation for few years, and the more people you employ (especially if young) the more slack on taxes you get. Do companies in countries with lower taxes get that?
Mind you, I still believe doing business in Italy is too expensive and beurocracy too high, but there's also very serious benefits of doing it that you don't get in silicon valley where the first wrong swing kills your business and company.
A startup can hire Italians anywhere, certainly anywhere in EU, so the benefit of pair-for education doesn't require Italian jurisdiction.
Everything else sounds really handy if your company is destined for failure, since there are so many ways to get a bailout or take a "loan" with no interest which, hey, you also don't have to pay it back! That's a grant coupled to a later and optional donation, not a loan.
A full-time employer pays for their employee's health care, it doesn't matter if it comes out of taxes or not.
Business in Italy is too expensive, and bureaucracy too high, and you have done a fantastic job of explaining why that is while touting it as benefits!
If I looked into the relationship between nepotism and getting access to all this free money, would I be surprised? Bet I wouldn't be.
Because, as we all know, all businesses are IT startups that can afford to pay for comprehensive medical care, every employee of every company can afford the dissolution of a company (or just an emergency) etc.
Also, there's a reason American IT companies frequently list medical insurance, parental leave, vacation tim as benefits. You know, things you don't even think about are listed as benefits.
Why would anyone want this insanity is beyond me.
In Italy, that's not really the case, between lower salaries, no interest loans and government funding we have had many great businesses growing out of people that would've had no chance of convincing venture capitalists.
And as I said, yes, it's true, Italy is not the best place to start a business, and yes, it's true that there are places where you can find some if not more of the same benefits with less of the drawbacks, but still you're severely underestimating the many benefits and convenience you can get in Italy where you can start businesses you would've never had the chance too in places where there is no public funding and help for aspiring entrepeneurs.
Also, many of those barebones entrepeneurs end up making money, differently from billion-dollar ventures that have yet to post a profit after a decade but can boast highly paid engineers behind very questionable quality overbloated software.
In reality they don't though. So why do you think that is?
Would you be so kind as to provide a metric, so I can demonstrate conclusively that this isn't true?
I'm basing this on intuition, which is in turn based on numerous Italian software developers I've met in California. Do they have the wrong ideas and knowledge?
Of course not, they went where they could run a business without interference.
I'd imagine it is easier to start a tech venture in the valley than Italy, but that's just because there's an established ecosystem for it and you're not blazing new ground. The various particularities of government are relatively insignificant in comparison. That's why you can have similarly vibrant startup scenes under political environments as different as the US, China, and Israel.
In SV you can get 10M+ in capital pretty easily - close relative with one prior startup did just that recently. It's VERY low overhead, you can hire (and fire) folks pretty simply. The due diligence on that $10M didn't even require audited financials or anything.
I don't know anywhere in italy even close to that.
There's definitely a lot of sweet VC money to collect with a business office in SV, but I have no idea why a large company investing a lot of its own money would choose to throw 4/5ths of it away.
Startup spend (should be) dominated by payroll, maybe server costs. This isn't 500% as expensive in California vs Italy, you made this up.
I have witnessed this first hand in Finland where government grants can generate a lot of inflow for early startups. Because bureocrats cannot judge which companies should stay alive or not, everyone gets money resulting to zombie startups that have not managed to scale even after 10 years.
The difference is that in countries with universal healthcare, everyone who works, companies, etc, pay for everyone's healthcare - an unmitigated social good that many in (say) America wish the US would learn from.
IMHO the real "life style" businesses are those VC backed start-ups never reaching profiatbility. Because in those cases the founders get to play CxO on other people's money, living this "entrepreneur" life style. One start-up after the other.
There's a surprising number of things that involve the legal system, and the legal system moves at a glacial pace--in some cases, taking months between when a ruling becomes final and when it becomes enforceable. Encounter any one of those situations, and it's going to be a huge time & resource drain for the company.
Perhaps it'd make sense to headquarter the startup in a more favourable country (Estonia?) and then have a major branch office in Italy (for climate and talent reasons).
If true, it rather looks to me like a recipe for zombie enterprises than for healthy ones. Don't you want that, if it is to fail, to fail fast?
"New companies get a very friendly, near 0 taxation for few years, and the more people you employ (especially if young) the more slack on taxes you get. Do companies in countries with lower taxes get that?"
Romania is on lower end of all kind of taxes in the E.U., then especially new/small companies (whose turnover is lower than 1 million Euros) there is this tax option of 3% (from income) or even 1% if there is at least one employee.
Education, healthcare, and even government grants (thanks to investment & development policies in overall E.U.) were worth mentioning only in relation to U.S., as Italy does not particularly excel at any of them.
That said, Israel may have some/all of them and it is successful startup-wise, so those things are not an obstacle either.
I think very few founders look for money at YCombinator, they're primarily interested in the connections.
It's the big, complex legal system that gets me, and the mentality that keeps it in place. There's some sort of minimum required level (countries with too little don't thrive either) but when I think of Italy or India I think the complexity of simply getting anything done is discouraging.
OTOH I don't really care much about taxes and never have. Most of them are on profits, and if you're making profit, great! There are of course a plethora of bullshit excise taxes like business licenses, but in the main they have never added up to a lot in any business I've run. And of course I depend on things like fire brigade, a legal system (not that I've needed to sue anyone or be sued), clean air, roads, etc etc so paying taxes doesn't seem that bad in principle. Those things need to be paid anyway, and sometimes leaving them out of taxes is far worse (consider America's ridiculous health system)
Taxes aren’t a problem, shit ROI on taxes is.
Italy is better than France, Germany, etc. [0]
Italy has other problems (labor law; IP law; etc), but I don't think that taxes are an issue.
[0]: https://taxfoundation.org/capital-gains-tax-rates-in-europe-...
From my experience I can tell that most people here don't want to waste time in a startup with its high risk factor, and it's even more worrying if you come from a college environment where you expect that _Let's do this, I don't care_ kind of attitude. The majority of new grads prefer a secure (and most of the time underpaid) position to pay the bills at the end of the month. It's saddening to see but a lot of my friends, super smart ones included, just opt for low level companies that will never make them grow and will give them the minimum amount of money to make a living (that's what they tell me) while in pretty much the rest of UE they will pay 3x that amount.
I think the mentality in Italy is totally different, I know only one person that would have jumped in the startup world at the time and quickly got discouraged because he didn't know how to get funded (probably not the first thing I would consider if I think I have a great idea). The rest of my colleagues wouldn't even want to listen to startup ideas.
Also, I think we Italians don't have the market for new tech related startup, our population is very old and they don't really care about new stuff/services coming out as you would expect, launching in the US would be a totally different story.
It's a multi variable problem, the lack of ideas is just the tip of the iceberg. It's not that there is a startup creation problem, it's that the few people that want to try out the startup world are smart enough to do it elsewhere where higher chances of success lie.
And don't get me started on the bureaucracy part, I'm not well informed on that because I'm pretty sure it would just waste my time.
Working hard for investors and shareholders!
Larger, later stage startups tend to rely less on equity and more on cash because the equity gets pretty diluted pretty quickly - there’s an awkward middle ground where there may still be plenty of uncertainty about whether the business will survive to an exit/IPO/etc despite some success, but where any shares you got aren’t necessarily enough to make up for low salary if one of those things happens. That middle ground is where large cash comp makes the most sense.
But broadly speaking, yes, tech startup salaries in the US trend high.
Piacentini's own words: "We have no ambition to emulate the likes of Y Combinator"
I agree with HN's reluctance to alter titles, but in cases where the title itself a lie, clickbait, or gross exaggeration I think that it should be edited.
It's cool to see the YC terms borrowed directly, and hopefully that would be a shot across the bows of European investors. But to really give European founders leverage they need access to US valuations and terms.
I think semi-philanthropic incubators like these could really help by guiding founders to form US entities or reincorporate as early as possible.
It also gives tou better exit potential in the event of a M&A.
I can't imagine moving to the US, and I'm sure that lots of smart people in the EU are in the same camp. At the same time, I'd be very interested in providing high value to and being part of a company with the velocity and dynamics of a start-up -- I just wouldn't move to the US to pursue the opportunity, as in: I'd not even consider it below ridiculous/unrealistic pay.
1. Market
US: a rather unified single English-speaking market of 300 million people.
EU: 27 different markets in the EU + half a dozen markets in countries freely associated with the EU (e.g. Norway and Switzerland) in different languages, cultures and expectations
2. Money
US: unlimited unchecked runaway money. All the "unicorns" we keep hearing about can easily lose hundreds of millions and even billions dollars a year for decades, and still considered a success
EU: less money, and you are expected to actually turn a profit at some point
If different cultures and languages are not a problem for US startups in spreading to Europe I fail to see why it would be a problem for EU companies
US startups <<grow>> in the US, the huge single market with a single language, then once they're big and can tackle the bureaucracy in order to get to the huge chunks of cash also available in Europe, they <<move>> into the EU.
A not-so-huge startup by US standards can have hundreds of millions of dollars very early in its life, allowing it to switch to international expansion, while most of the equivalent EU startup would probably raise tens of millions by the same stage, if they're lucky.
Well, it isn't half a dozen, it's more like 3 countries (Iceland, Switzerland and Norway). 4 if you count Liechtenstein with its population of 38k people.
That's understating the issue. There are only 5 (!) EU member states with a population higher than that of the NYC metropolitan area and _none_ with that kind of population concentration or purchasing power.
I personally do this via contracting. I’m in Europe and work for people in the US. I’m currently working with two companies, both are very early stage startups, it’s very dynamic, everything has to be built from scratch and I feel I have lot of influence over products and devices which is something I enjoy.
And I still have all benefits from Western European countries.
Not sure how things will evolve if they start to focus on hiring employees and move to a more standard company structure but so far things are going well.
If you want a more nearshore solution you may want to contemplate the Netherlands or Ireland which both have fairly well developed support systems in case you ever need help.
The issue in Europe from an investor perspective is that scaling is tougher than in the US. You have to most likely make changes to your product to cover a sufficient number of European countries due to a combination language, currency, regulation, customs, etc.. Your sales and marketing materials needs to at least be in different languages. Your German sales rep needs to speak German and most likely be German, your French sales rep needs to speak French and be French, etc. Add to that the fact that in B2B European companies tend to be less open to innovation. Also, you may encounter workers-councils at your potential clients discouraging changes to processes, etc.
I'm in Germany and wanted to do this with my cofounders, but couldn't wrap my head around the legality.
Don't you also have to maintain a German presence basically? And what are the implications in regard to exit taxes?
> And what are the implications in regard to exit taxes? No idea
Could you elaborate on this, or point to a source? The way I understand the mini-GmbH model (UG) there is no limitations regarding shareholders versus a standard GmbH.
Not saying you’re wrong, I’m by far not an expert but I looked into creating a Unternehmergesellschaft ~1 year ago and don’t remember reading about that type of thing.
This is correct, however from my understanding this is only at time of incorporation. If I was to incorporate and then get a term sheet from an investor, I would struggle to then make them a legal shareholder in my UG.
Perhaps I am also misunderstanding, re-reading [0] you could be correct. I did reach out to firma.de for clarification in February but never got a response.
[0] - https://www.firma.de/en/company-formation/what-is-a-ug-haftu...
Edit: I feel it’s always so complicated to understand the German system for anything related to company administrative stuff :p
https://business.gov.nl/starting-your-business/choosing-a-bu...
Would you like to write a blog post about it?
Esterovestizione is the specific term for that kind of fiscal crime.
Yes, that is fraud. But one can do it legally by not lying about ones residence and paying taxes locally. It's complicated, so accountants will love you, but it's not illegal as far as I know.
after covid there are less meetups, but I'm sure it's going to pick up again
In Turin there is I3P [www.i3p.it], a serious incubator managed by the Torino Politechnich
The issue with car manufacturing is that it employees a fuckton of people, so it becomes political.
Also, if there is a person who can run this thing well is mr. Piacentini, so I would not be too negative.
This has changed several years ago.
> you had to pay an annual tax to validate your passport
Keyword being had. It's gone for like 10 years.
To make it short, if I want to sell my home at market value to someone paying with a mortgage (likely 98% of buyers need one) I have to request some documentation which involves a tax, which in my case amounts to 5K Euros, plus a notary lawyer for documents filling and transmission which cost a few hundreds Euros. All fine and dandy, too bad that the mean time between the document request and when it is being released amounts to 7-8 months! Big WTF... 7-8 months for a fucking stamp on a piece of paper, plus hopefully one record in a database! I filled, paid and sent the request last January, let's see how much time will it need. I am extremely lucky that the owner of the home I'm buying will wait until next summer, and I'll have to deposit more money to drag it further, or I would have lost all my deposit only because of bureaucracy.
AFAIK not yet for everybody
> Keyword being had. It's gone for like 10 years.
I think it's less, but in my last renewal in 2017 I had to pay over 100€ all at once which is ridiculous (but at least less ridiculous than having to put a 10€ physical "marca da bollo" each and every year).
For all employees (lavoratori dipendenti) and retired people.
That’s a neat myth, but you’ll constantly interface with laws and bureaucratic structures from the pre-WWI empire (e.g. most of the school system, a lot of taxes, the entire healthcare system) and sometimes even Prussian laws from before the German Union.
Americans seem to have a special relation to their constitution, but in practice you interface with more detailed areas of the law much more often. The civil code of Germany [0] is from 1881 and even then was not written from scratch, but contains Prussian laws etc.
[0] https://en.wikipedia.org/wiki/B%C3%BCrgerliches_Gesetzbuch
Well, every European country has this. France is at the Fifth Republic right now but I can bet that there's some obscure law hidden somewhere that's from the time of Philip II of France.
If you build a startup and your main concern are those tax activities, I assume you are not building a startup. That's definitely not the hardest part :)
I live in Hungary, am Italian, Hungary is worse for most things.
[0] https://www.corriere.it/economia/aziende/cards/imprese-itali...
[1]https://www.univrmagazine.it/2020/04/09/emergenza-covid-19-e...
In Stockholm, where I am now, there has been reasonable progress. But it feels like we are nearly where the Valley was in 2000. (That is exaggerated, it is better)
A key takeaway for me from efforts like what the article describes is that a lot of it feels like cargo culting. “If we are more like Y-Combinator (replace with suitable other aspect of the Valley) we will succeed.” Where what is missing are things that are hard to bootstrap: large amounts of capital, capital willing to take risks, investors that invest in bold efforts, experienced and successful investors, successful entrepreneurs that go another round, a common market with similar rules, regulations and language; and more things I am missing (much mentioned in other comments).
Things are getting better, but it is still a challenge in the EU. However, looking at some of the valuations I see in the US, it appears there are bargains to be had in the top EU startup spots, where Stockholm is a good candidate.
[0] https://www.exor.com/pages/companies-investments/companies/f...
It could be better, I suppose; if there are any large holding companies out there named Nande or Norr they might have stiff competition.