You may be right. It still seems like the easiest solution is for all the startups to unionize so they don't have any choice: they can either invest in unionized startups or they can stop being VCs.
It's much simpler than this and it is about making money.
Whether unions impact the ultimate success (in terms of ability to build) of a company or not, they certainly shift the share of money that is going towards labor as opposed to owners who want a profit.
This lowers the expected return of company equity which means people will be willing to pay less and you will be able to raise less money while you are trying to scale up. A non-unionized competitor will be able to raise more money and if there are positive returns to scale, outscale & outcompete.
European approaches like sectoral bargaining and codetermination don’t have these problems; a single company isn’t disadvantaged vs its competitors and the employees on the board are motivated to grow the company. Europe doesn’t have VCs and the culture doesn’t support failure like Silicon Valley, but that’s for different reasons.
No, it is the same effect I am describing but inter-national as opposed to inter-firm. Capital allocation is transnational.
FAANGs have European offices with work councils and all and aren’t considered unproductive, but they’re not the corporate headquarters because they didn’t start there.
Certainly some European countries prefer having a few old large companies because it’s easier to regulate. Asia has the same problem; it’s an everywhere except Silicon Valley thing.
edit: actually, ASML is an example of a European headquartered tech company where all the value is “actually” American. Not sure how that happened. Video game studios also seem a lot more international than other tech companies.
FAANG companies having EU offices with work councils is completely irrelevant to what I am saying.
You can't start a company there because all this social spending makes it super hard to get going. I think the US is heading this way too now, toward lots of big companies with fat required benefit packages the little guys can never match (even if they eventually go on to become huge).
I wish people who would being so starry-eyed about Europe. One of the 10 biggest companies in Italy is the post office. Lots of industrial power, that.
The US actually got there first, and hasn’t collapsed in any wars recently, and as such we’re on the old version of all government software so it all sucks yet nobody is willing to risk upgrading. Starting from scratch is a lot easier since there’s nothing to lose. (And of course, having the country collapse is bad too.)
> It still seems like the easiest solution is for all the startups to unionize so they don't have any choice: they can either invest in unionized startups or they can stop being VCs.
Yes. Or fight for workers' rights in the even broader sense (not just startups or tech).