Ferrari owner Exor wants to build the Italian Y Combinator(sifted.eu)
sifted.eu
Ferrari owner Exor wants to build the Italian Y Combinator
https://sifted.eu/articles/ferrari-exor-seeds-italy-y-combinator/
142 comments
Yes, doing business in Italy is hard, but when your company is doing poorly financially or is having issues it's the government that is going to pay your worker's salaries. Do places with low taxes have this?
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.
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.
The sum of these affordances adds up to a market for lemons.
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.
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.
> adds up to a market for lemons
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.
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.
> fantastic job of explaining why that is while touting it as benefits
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.
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.
One could argue that IT startups are all that matter.
One wouldn't even have to argue such a thing to limit the discussion in that way for an "Italian Y Combinator" article.
IT companies don't exist in a vacuum.
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.
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.
You kind of missed some of my crucial points: starting a business on low budget in Italy is possible. People with the right ideas and knowledge can start ventures easier than they would elsewhere in the world, especially silicon valley where you're much more dependent on (important) private capital.
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.
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.
> People with the right ideas and knowledge can start ventures easier [in Italy than Silicon Valley]
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.
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.
Curiously, other people are always quick to point out how California is a very difficult place to operate a company in when the focus is on companies "fleeing" to low tax states like Texas.
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.
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.
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You can startup an AI automated car driving startup more easily in italy than you can in SV?
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.
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.
The buying power of 10m in SV is equivalent to what, 2m in Italy?
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.
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.
Totally absurd claim without any basis in fact whatsoever!
Startup spend (should be) dominated by payroll, maybe server costs. This isn't 500% as expensive in California vs Italy, you made this up.
Startup spend (should be) dominated by payroll, maybe server costs. This isn't 500% as expensive in California vs Italy, you made this up.
Well, in Italy a software dev would earn 1500€/month (anecdotal based on friends), so if you are talking about a software startup, it's not out of the blue. My salary (I'm italian living in Canada) is at least 5x what I would be making in Italy
> People with the right ideas and knowledge can start ventures easier than they would elsewhere in the world, especially silicon valley
In reality they don't though. So why do you think that is?
In reality they don't though. So why do you think that is?
That’s ok for a barebones entrepreneur. That’s not great for people who want to hire talented workers who want real comp.
Everything's a trade off.
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.
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.
> A full-time employer pays for their employee's health care, it doesn't matter if it comes out of taxes or not.
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.
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.
"when your company is doing poorly financially or is having issues it's the government that is going to pay your worker's salaries"
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.
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.
Hi from Italy.
What the parent is saying is correct/partially correct.
Still Italy is a very difficult place to do business for a number of factors: burocracy, cultural attitude (who you know means too much), strict labour legislation, slow justice system just to mention the first few which come to my mind.
If you come from abroad the above factors become 100times harder to manage/understand.
We have a lot of talents and the same amount of weaknesses. Not easy at all.
Still a great place to visit and to spend holidays in. Sorry I don't mean to be harsh.
As a recently recognised Italian citizen, I have to agree--it's not the appropriate place to form a startup.
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).
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).
i am from another EU country and getting funding beyond 50k from the government is really hard. vcs and angels are super conservative and take no risks. the government is not paying your employees if you cannot pay them… and you are personally liable for their social security taxes. i doubt that italy can do what you say here as most EU countries handle things similarly. also, if things get harder than you thought they were going to be and can’t pay the government back you will go bankrupt and potentially lose your assets which you might have invested in substantially yourself. i will never take government loans again.
While all of those things sound good, the US seems to have a lot of startup success without 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.
That said, Israel may have some/all of them and it is successful startup-wise, so those things are not an obstacle either.
Wow, what a ridiculous comment. What you are mention is only a good environment for lifestyle businesses, not startups and growth companies who are usually more innovative and have the possibility to create massive net positives in a country's economy.
If a small conpany is creating enough profits to finance one persons life, well, that's just great.
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.
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.
> the amount of taxation companies had to go through and the uncertainty behind a big and complex legal system which makes an average of 8 years for civil processing .
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)
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)
Also missing in Italy are the networking and connections to relevant people and organizations.
I think very few founders look for money at YCombinator, they're primarily interested in the connections.
I think very few founders look for money at YCombinator, they're primarily interested in the connections.
I don't think you are properly informed.
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-...
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-...
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Don't forget the culture of corruption, esp. in the south of the country.
Why poland?
> The exodus of tech talent and lack of startup creation in Italy has worried investors
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.
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.
My impression was that in the US you get compensated pretty nicely while in a startup. The whole idea is to get funded so that you can attract talent with crazy salaries. Or did I get something wrong?
It varies a lot based on the stage of company you are joining. Very small startups often pay relatively little in cash and rely on equity to attract talent, because the early stage hires are at least theoretically interested in the vision and potential upside of the business growing, and cashflow is tight at early stage companies.
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.
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.
yeah, and then you get charged nicely by your landlord, health insurance companies, the tax man, and a million other people for basic shit.
Title: "Ferrari owner Exor wants to build the Italian Y Combinator"
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.
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.
The full quote: “We have no ambition to emulate the likes of Y Combinator, or even Kima Ventures, from the start. But we aspire to what they have built — our ultimate goal is to get to that level.”. When read like this it sounds like eventually he would like to build something like Y Combinator.
If I did another startup in Europe, I would incorporate in Delaware and raise US money from the get go.
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'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.
I am doing this right now, Stripe Atlas Delaware C-corp but operating in Germany. I could have incorporated a GmbH for €25,000 (goes into an account to act as collateral against future liability) - which uses all my savings basically, or a UG for €1 - but then I can't add other shareholders until I pay an additional €25k to convert it to a GmbH. For my startup, which is capital intensive, I have no choice but to use the US system.
London could work depending on your business. Hope you involved an international tax lawyer; there can be a lot of issues with the German taxes in this setup if you did not do this carefully.
London probably won't work for me. I have not pulled the trigger yet, tbh I am less worried about German taxes than I am running a C Corp from outside the US. Mainly because of the litigation heavy US culture, opaque paperwork overhead etc.
As a German having gone through the experience, I feel I am reasonably qualified to give a perspective:
The US setup is a breeze administratively, but fairly costly. You definitely need a tax accountant onshore ($3-5k per year at least, more if the setup is more complex) but that will take care of a good share of the minutiae. You probably also eventually need somebody helping you in Germany to take care of employment, taxes, VAT, etc. even though that may not yet be the case. When I've done it a few years ago I found it easier to have a German subsidiary of the C Corp doing that eventually.
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.
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.
Thanks, I was expecting to have a German subsidiary eventually. Also considering Netherlands
Netherlands is good as it’s not too expensive (we dropped the 9k ltd thing you also have for gbmh quite a while ago) but the rules and taxes and lack of investors is quite hard; similar things to Germany. You would be bound to those anyway though if your employees are not freelancers and are in those countries…
I am actually not sure if the investor assessment still stands after Covid forced just about any startup to be remote-work-heavy. I don't think most investors care anymore where companies are based or incorporated as long as it is within reason (don't incorporate in Australia unless you are an Australian company) and has a solid and well supported legal system.
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.
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.
The problem with taxes and capital and incorporation is that usually fixing it beforehand is easy while after you start to make money, you are perhaps too late. We went for London because not as litigious, light on paperwork, cheap to incorporate and there is a lot of money slushing around. Not America sized investments but close enough. And easy ramp to the US if you wish. Taxes are quite high once money starts poring in but it is startup and investor friendly pre money.
London probably has most generous tax incentives for startups to offer their investors. S/EIS.
Yes, exactly. And the grant process, albeit through no cure no pay orgs, is quite good.
Why not Estonia? Their digital e-residency stuff sounds great and their laws (including tax laws) seem pretty business friendly.
I have the e-residence, however from what I understand I still need to pay a local resident to act on my behalf for all company matters. Probably OK for a bootstrapped SaaS but I need to raise significant capital and want to make that process as streamlined as possible.
Can you talk about this a bit more? Or have any guidance?
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?
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?
> Don't you also have to maintain a German presence basically?
Probably easiest, with all the required trips to the notary
> And what are the implications in regard to exit taxes? No idea
> And what are the implications in regard to exit taxes? No idea
> or a UG for €1 - but then I can't add other shareholders until I pay an additional €25k to convert it to a GmbH.
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.
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.
> The way I understand the mini-GmbH model (UG) there is no limitations regarding shareholders versus a standard GmbH.
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...
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...
Have you tried contacting a “Handelskammer”? I had quite good experiences in the past with hk24.de for example, even asking questions in English.
Edit: I feel it’s always so complicated to understand the German system for anything related to company administrative stuff :p
Edit: I feel it’s always so complicated to understand the German system for anything related to company administrative stuff :p
Can you not say that "this macbook and that car are company's property" and fulfil the capital requirement? the minimal capital in Poland is 5000PLN(1100EUR) and you just buy a laptop.
If capital is the problem you could also consider the Netherlands which requires EUR 0.01. You will need to pay a notary for the incorporation tho.
https://business.gov.nl/starting-your-business/choosing-a-bu...
https://business.gov.nl/starting-your-business/choosing-a-bu...
From someone who hasn't interacted with the startup world much yet: what are some problems companies in Europe would have to deal with? What liberties are exclusive to the US? I'd imagine lots of complications of running a US-based company within Europe.
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.
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.
> what are some problems companies in Europe would have to deal with? What liberties are exclusive to the US?
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
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
I don't think that the 27+ EU markets are a problem. I'm not even sure if there are 27+ different markets in the EU in the context of startups/tech, because if there were then each country would have their own isolated tech ecosystem which is not the case. Most EU countries are dominated by US tech companies.
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
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
You're missing the bigger picture.
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.
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.
> 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
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.
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.
> half a dozen markets in countries freely associated with the EU (e.g. Norway and Switzerland) in different languages, cultures and expectations
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.
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.
> 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 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.
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.
I meant “services”, not “devices”… My autocorrect is a bit too zealous…
Yes same, even if I don’t get into YC I’ll be trying to raise on US terms. I’ve seen some really stupid startups in Europe end up with crazy dilution to the point where if they thought about it they’d realise they just had a job working for some rich people. US valuations are twice the amount for half the equity from what I’ve seen so why I wouldn’t do that rather than be screwed over I don’t know…
Make sure you incorporate in a form that US investors are comfortable with. Few investors are going to want to figure out what an ApS or GmH is just to make a seed investment in your tiny startup.
It also gives tou better exit potential in the event of a M&A.
It also gives tou better exit potential in the event of a M&A.
I’ll probably do whatever Clerky tells me to, which is the service YC tells founders to use I believe…
yeah and then go after European engineering talent, try to get best of both worlds.
This sounds interesting. Are there any prominent European startups who did go that route?
Would you like to write a blog post about it?
Would you like to write a blog post about it?
Depending on where you’re doing that and your nationality and fiscal residence, that might be illegal.
Surely not? Could you name a specific combination of those 3 factors that make it illegal?
Italy, being Italian, not being fiscally resident somewhere else for more than six months.
Esterovestizione is the specific term for that kind of fiscal crime.
Esterovestizione is the specific term for that kind of fiscal crime.
Esterovestizione = "The fictitious location abroad of the residence of a person who lives or works in Italy, in order to enjoy a more advantageous tax regime."
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.
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.
As Italian, when I read something involving Agnellis willing to do something for Italy, I am a bit scared about taxpayers money, like Fiat has always got tax discounts and subsidies and as a thank you has closed factories, and fired people, can we just keep the people related to Agnellis in the Silicon Valley?
this is what i think as well. When there is Agnelli family involved is just for have something from the state in some way or another. But we'll see. I hope to be wrong.
FIAT is not EXOR, a ton of EXOR initiatives came and went (remember Ciaoweb?) without government intervention.
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.
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.
Off topic! I just moved to Italy, living in Torino now. How's the startup ecosystem in Italy? I've seen some interesting Blockchain-related groups at the Politecnico, but not much after that.
I live in the Netherlands :D but am from Naples originally so I know little about Turin :'( sovvy
check this coworking space: https://toolboxcoworking.com/ there are several tech meetups of nice people and it's also hosting the local fablab: https://fablabtorino.org/
after covid there are less meetups, but I'm sure it's going to pick up again
after covid there are less meetups, but I'm sure it's going to pick up again
You could checkout the polihub incubator/accelerator in Milan, most of the startup they fund are hardware/mechanics related.
there is something around universities and in Milano,Rome. Its really small scale, low pay, very high risk. I believe engineering/product based startup are more fit for the italian market and offer more exit options, mostly M&A.
In Turin there is I3P [www.i3p.it], a serious incubator managed by the Torino Politechnich
In Turin there is I3P [www.i3p.it], a serious incubator managed by the Torino Politechnich
It's just a stereotype, come on!
https://www.google.com/search?q=fiat+lays+off
https://www.google.com/search?q=fiat+subsidies
I don't think so, if I am honest when I was young the few things I remember hearing continuosly from news was fiat laying off and fiat getting money
Yeah, but isn't related to this initiative. You are referring to something happened in the past for another company. It doesn't make sense.
In Naples we say you can put all the rum you want a turd can’t become a baba (pastry).. so they can rename it but its always the same dna I guess? We will see ^^
Good luck with that, Italy and Italians are one of the most bureaucracy-obsessed country on the planet. You can think you own country has bureaucracy issues? Go check Italy, and it will be for sure worse. I mean, in 2022 AFAIK and still not every salaried person can have a default pre-compiled tax draft that they can just sign on the Internet and get approved. You have to go and compile it one from scratch (I think the situation is changing but still not everybody has this by default). Also there is this idea where you get by default a lot of taxes but that you can opt-in to many helps for various topics (like, improving your house energy efficiency) which will reduce your tax burden, over usually 5 or 10 years after you paid for it cash. There are small taxes and fees for everything, you had to pay an annual tax to validate your passport (which was obviously checked only when you left Italy, if you live abroad nobody even knows about it, so now they made it a big fee at passport renewal every 10years) and so on.
Source: an Italian living abroad, tired of bureaucracy .
> still not every salaried person can have a default pre-compiled tax draft that they can just sign on the Internet and get approved. You have to go and compile it one from scratch
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.
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.
Yeah like I am not sure, when I was living in London, not being Schengen, at a certain point I got in mind to just go to "Questura" and make my electronic passport so that I could go through the fast automatic gate, I went there, paid the "Bollo", and I explained that I had to depart in a couple of days, and I just got the e-passport the morning I had to depart.. like it was blazing fast, I mean for my experience, getting passports in Italy is really a no-brainer
Some things have been sped up a lot (thanks to the EU), however in some cases bureaucracy still slows down even the simplest document request.
Personal experience: I want to relocate, so last summer I found a new home and quickly paid a 20K Euros non refundable (in case of withdraw) deposit upfront. Unfortunately I later discovered that my own home can't be sold at market value, or to be more accurate to be purchased at market value with an authorized mortgage, because it was originally intended as (can't translate the proper Italian term) roughly half-owned-by-the-state-property which was a formula intended to help poor families to buy their home for cheap in city developing areas during the 80s. I have no resources to buy the new home without selling the old one first, and no intentions of getting into debt for it.
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.
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.
That sucks sorry, good luck.. I’m so lucky that I dont own an house and can’t afford a mortgage in any way :D
I always had to do several hoops and loops through the consulate to get my 1st and then renew my passport abroad. But maybe we Italians living abroad are a snowflake and an edge case in this regard (like, I still renewed 6 months ago my ID card and it is still made of fucking paper)
Soon after that I got also my e-id, what a bloody win not being watched anymore like a neanderthaler every time I had to show my ID :D (but I lost the PIN) (But then I got the SPID and didn't need the e-ID anymore :D)
For SPID I'm also trapped in some loop where I can't get it easily from abroad, and I still don't understand why.
Have you tried Aruba? I have done remotely up to the level 2 with them, and the verification compared to the one from Poste is just via webcam, you just hop on a chat with them, move your head left and right, make a jump, a turn, hold your ID close to your face and the guy just approves the identity, try if you haven't thought of them yet
And you can use it with a standard OTP generator: https://github.com/andry08/ArubaOTP-seed-extractor
Omg this is awesome, thank you
with Sielte i did the SPID online in three days
> This has changed several years ago.
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).
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).
> AFAIK not yet for everybody
For all employees (lavoratori dipendenti) and retired people.
For all employees (lavoratori dipendenti) and retired people.
You are basically describing Germany. I try to put it on first-mover disadvantage to make me feel better: Basically Germany has had a relatively functioning administration for hundreds of years (Italy even for thousands). Compared to something you would design from scratch in 2022 it looks a bit archaic. I celebrate every little step forward.
The US administrative and political system is objectively older and more archaic than the ones in almost every European country (besides Britain, Switzerland and maybe(?) Scandinavian countries). Germany was established in 1949 and Italy is a fairly new country as well.
> Germany was established in 1949
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.
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.
As other commentors pointed out: The fundamentals of German bureaucracy are way older than 1949.
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
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
Modern Germany and Italy are successor states to much older entities, and frequently stuff from those ages creeps in.
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.
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.
The current Switzerland goes back to 1848. There was a massive shift n administration and statecraft throughout Europe after the French Revolution, even in Scandinavia. Britain's the only country that kept to its own.
Italy is a new country but relies on older habits and in general on a more conservative mindset.
I think Italy is below Germany at a bureaucratic level, I am not fully convinced that bureaucracy is the main issue, I think the main issue is the lack of electronic and fast and reliable and documented ways to complete requirements
I guess you are not an Italian living in Germany then :-)
I am startup owner (SRL, limited liability company). I have incorporated the company in 1 day through a notary. Other activities related to taxes are outsourced by €2k-3k/year accountant. Yeah, it could be easier, but it's not the problem.
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 :)
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 :)
FUN FACT: in Italy there are 160K regulations (75k at national level), 7000 in France, 5500 in Germany [0]. I would say that the structure is to shift responsabilities down the power stream. For example, Doctor were legally and financially liable if any covid patient got aftereffects [1]
[0] https://www.corriere.it/economia/aziende/cards/imprese-itali...
[1]https://www.univrmagazine.it/2020/04/09/emergenza-covid-19-e...
[0] https://www.corriere.it/economia/aziende/cards/imprese-itali...
[1]https://www.univrmagazine.it/2020/04/09/emergenza-covid-19-e...
> Go check Italy, and it will be for sure worse.
I live in Hungary, am Italian, Hungary is worse for most things.
I live in Hungary, am Italian, Hungary is worse for most things.
Sounds like you've been living abroad for about 15 years.
[deleted]
it seems like they are building it in the Netherlands
I’ve thought of setting up a retreat center in southern Italy for tech teams. Like: take your team and work together remotely for a week. The center will have high end equipment, good furniture, whiteboards etc. Why southern Italy? The climate is great, there are lots of subsidies available, land is cheap and cost of living is low. I’d call it Sicilian Valley.
Please do.
It is a lot of work to create a business ecosystem that is able to nurture startups. I have some experience gathered over the years from Silicon Valley, London, Amsterdam, Bangalore, and now most recently Stockholm. There are drawbacks and benefits to all of them. The EU based startup environments suffer heavily from relatively smaller amounts of money available for the same thing (often an order of magnitude), and a fragmented starting market. The startup market in the EU is also fragmented over nearly every capital city in each country.
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.
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.
Reminds me of: https://www.h-farm.com/en which attempted that in the past.
It is misleading to call Exor the owner of Ferrari, they hold a 22.9% economic interest [0].
[0] https://www.exor.com/pages/companies-investments/companies/f...
[0] https://www.exor.com/pages/companies-investments/companies/f...
Building a Ferrari is just some wheels and red paint.. I think anyone can build that as well.
Well if nominative determinism has any weight, they have a great name for it.
It could be better, I suppose; if there are any large holding companies out there named Nande or Norr they might have stiff competition.
It could be better, I suppose; if there are any large holding companies out there named Nande or Norr they might have stiff competition.
Maybe a sort of conglomerate, where each new 'startup' is part of an existing company. Would that avoid some of the bureacracy?
I will believe it when I see it
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.