{"id":491823,"date":"2024-11-07T06:30:00","date_gmt":"2024-11-07T05:30:00","guid":{"rendered":"https:\/\/innovationorigins.com\/?p=491823"},"modified":"2024-11-07T06:30:00","modified_gmt":"2024-11-07T05:30:00","slug":"startups-call-for-new-legal-status-to-boost-europes-growth","status":"publish","type":"post","link":"https:\/\/ioplus.nl\/archive\/en\/startups-call-for-new-legal-status-to-boost-europes-growth\/","title":{"rendered":"Startups call for new legal status to boost Europe&#8217;s growth"},"content":{"rendered":"\n<p>While Europe\u2019s startup scene is thriving \u2014 more startups were created in the Old Continent than in the US for <a href=\"https:\/\/www.ceps.eu\/europe-can-produce-its-own-tech-giants-heres-how\/#:~:text=In%20each%20of%20the%20past,other%20side%20of%20the%20Atlantic.\">five years<\/a> in a row\u2013fragmentation constrains its ability to establish growing companies. For this reason, a group of European startup founders and investors launched <a href=\"https:\/\/www.eu-inc.org\/\">EU Inc<\/a>, calling for establishing a new legal entity&nbsp; (a 28th regime) with uniform regulations for European startups to operate within the EU. This would restore Europe\u2019s competitiveness and help companies develop and stay in Europe.&nbsp;<\/p>\n\n\n\n<div class=\"io-block io-block__box\"><h2>Why this is important:<\/h2><p>While Europe improved its ability to create companies, it lags when scaling up businesses, with some of the most promising startups moving to the US to fuel their growth ambitions. EU Inc formulated a proposal to tackle this problem, which is one of the reasons why Europe cannot be as competitive as other world ecosystems. <\/p><\/div>\n\n\n\n<p>\u201cEU Inc is an attempt to create a unified voice for a step change in the European startup economy. We now have 27 fragmented ecosystems with different tax and legal entities. As things are nowadays, it is implausible to give startups room to grow and build on their momentum,\u201d explains Philipp Herkelmann, one of EU Inc&#8217;s initiators.&nbsp;<\/p>\n\n\n\n<p>Some of the most influential figures in the European startup ecosystem\u2014including paying system Stripe CEO Patrick Collison and several venture capital firms, such as Sequoia and Point Nine\u2014are backing the call. Over 12,000 people have signed the petition launched by EU Inc. As the newly appointed EU Commissioners set their working program for the next five years, the campaign aims to put the topic on the priority list of the policymakers&#8217; agenda.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What a single entity could mean<\/h2>\n\n\n\n<p>EU Inc&#8217;s vision for a \u201csingle pan-European startup entity\u201d outlines some of the actions needed to shape the 28th regime:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Standardization of the investment processes to enable genuine pan-European investments;&nbsp;<\/li>\n\n\n\n<li>Establishment of a unified employee stock options program to share startup success more widely;&nbsp;<\/li>\n\n\n\n<li>Simplification of cross-border operations, such as employment and capital flows;&nbsp;<\/li>\n\n\n\n<li>Digitization of the incorporation process, reducing it to just a few hours \u2013 entirely in English and online.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>According to the proponents, these actions would result in faster scaling, more breakout successes, and an influx of global capital. \u201cIf we make it easier to start a global company in Europe, more talent will come to work in Europe, and more capital will be deployed,\u201d Herkelmann comments.&nbsp;<\/p>\n\n\n<div class=\"vlp-link-container vlp-layout-basic wp-block-visual-link-preview-link advgb-dyn-af482714\"><a href=\"https:\/\/ioplus.nl\/archive\/en\/europe-vs-america-the-battle-for-deep-tech-talent-heats-up\/\" class=\"vlp-link\" title=\"Europe vs. America: The battle for deep-tech talent heats up\"><\/a><div class=\"vlp-layout-zone-side\"><div class=\"vlp-block-2 vlp-link-image\"><\/div><\/div><div class=\"vlp-layout-zone-main\"><div class=\"vlp-block-0 vlp-link-title\">Europe vs. America: The battle for deep-tech talent heats up<\/div><div class=\"vlp-block-1 vlp-link-summary\">The race to attract top talent in deep tech is intensifying between Europe and North America. While government investment in Europe has spurred some growth in the sector, U.S. companies continue to scale faster, attracting a larger pool of advanced-skilled talent. The deep-tech sector now faces new challenges, from talent scarcity to the pressure of delivering on innovation, leaving both continents grappling with unique hurdles in this ever-competitive landscape.<\/div><\/div><\/div>\n\n\n<h2 class=\"wp-block-heading\">Bottlenecks<\/h2>\n\n\n\n<p>Although Europe has excelled in creating new startup companies in past years, bottlenecks arise when scaling up, so growing big in the Old Continent is hardly done. A recent <a href=\"https:\/\/www.pwc.co.uk\/services\/audit\/insights\/global-top-100-unicorns.html\">analysis<\/a> by consulting company PwC on the global top 100 unicorns in September 2024 shows only ten of them are European\u2014the US has 58, and China has 23.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image alignright size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/archive.ioplus.nl\/wp-content\/uploads\/2024\/11\/Phiippp.jpeg\" alt=\"\" class=\"wp-image-491834\" width=\"247\" height=\"247\"\/><figcaption class=\"wp-element-caption\">Philipp Herkelmann<\/figcaption><\/figure>\n\n\n\n<p>Atomico\u2019s 2023 state of European tech <a href=\"https:\/\/stateofeuropeantech.com\/\">report<\/a> pointed out that European companies raised $45 billion in VC funding, nearly three times less than their US counterparts, which raised $120 billion. The same paper underlined how European tech firms are 40% less likely to raise funds after five years than US ones.&nbsp;<\/p>\n\n\n\n<p>This limited capital mobility is one of the sore points underlined by Herkelmann. \u201cIt is highly unlikely that a German investor will fund a Slovenian startup. It takes time and effort to understand the ecosystem one operates in\u2013 not to mention the high transaction costs.&nbsp; The likelihood of a European startup having an investor from another European country or the United States is the same.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Competitiveness: a hot topic<\/h2>\n\n\n\n<p>The EU Inc proposal builds on the momentum created after the release of former European Central Bank head Mario Draghi&#8217;s <a href=\"https:\/\/commission.europa.eu\/topics\/strengthening-european-competitiveness\/eu-competitiveness-looking-ahead_en\">report<\/a> on European competitiveness. The paper advocated for strong investments in innovation to give a new impulse to Europe\u2019s growth.&nbsp;<\/p>\n\n\n\n<p>In Herkelmann\u2019s view, Mario Draghi\u2019s recent European competitiveness report clearly pinpointed problems and proposed solutions. He highlights two relevant aspects. \u201cA comparison graph about innovation focus in the US and Europe shows how overseas this shifted continuously in the past decades, following the trends of pharma and AI, for instance. In Europe, this remained centered on automotive. Besides, the report also calls for abating regulatory barriers and establishing a true single-market for startups.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Europe can do it<\/h2>\n\n\n\n<p>With over a decade-long career in the startup ecosystem\u2014as a founder and investor\u2014and a past at Google, Herkelmann now works as an advisor and investor. When Andreas Klinger, one of the other co-initiators, contacted him to tell him about the very raw idea of EU Inc, he did not hesitate to help elaborate on the concept further.&nbsp;<\/p>\n\n\n\n<p>Having sensed different ecosystems worldwide, he is convinced that Europe has many trump cards. \u201cEurope has excellent R&amp;D centers and universities that produce fantastic talent on scale. I do not believe Europeans lack ambition or a working attitude, but the system limits them. Our initiative wants to articulate the voice of an industry that might be small in headcount but holds a huge potential impact for the future.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>While Europe\u2019s startup scene is thriving \u2014 more startups were created in the Old Continent than in the US for five years in a row\u2013fragmentation constrains its ability to establish growing companies. For this reason, a group of European startup founders and investors launched EU Inc, calling for establishing a new legal entity&nbsp; (a 28th [&hellip;]<\/p>\n","protected":false},"author":2084,"featured_media":505415,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"advgb_blocks_editor_width":"","advgb_blocks_columns_visual_guide":"","footnotes":""},"categories":[84165],"tags":[86765,75134,86767,31047,2698,2886],"location":[66582],"article_type":[36684],"serie":[],"archives":[],"internal_archives":[],"reboot-archive":[81075],"class_list":["post-491823","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-community","tag-competitiveness","tag-concurrentie","tag-eu-inc","tag-european-union","tag-startups","tag-startups-en","location-europe","article_type-news","reboot-archive-community"],"blocksy_meta":[],"acf":{"subtitle":"EU Inc launched a petition to set up a new legal regime to foster startups\u2019 growth. IO spoke with one of the initiators. ","text_display_homepage":false},"author_meta":{"display_name":"Mauro Mereu","author_link":"https:\/\/ioplus.nl\/archive\/author\/mauro-mereu\/"},"featured_img":"https:\/\/ioplus.nl\/archive\/wp-content\/uploads\/2024\/11\/innovationorigins_a_map_of_Europe_with_links_connecting_all_cou_3c3bedf1-7082-4f51-a72a-4336cab4253d.png","coauthors":[],"tax_additional":{"categories":{"linked":["<a href=\"https:\/\/ioplus.nl\/archive\/en\/category\/community\/\" class=\"advgb-post-tax-term\">COMMUNITY<\/a>"],"unlinked":["<span class=\"advgb-post-tax-term\">COMMUNITY<\/span>"]},"tags":{"linked":["<a href=\"https:\/\/ioplus.nl\/archive\/en\/category\/community\/\" class=\"advgb-post-tax-term\">competitiveness<\/a>","<a href=\"https:\/\/ioplus.nl\/archive\/en\/category\/community\/\" class=\"advgb-post-tax-term\">concurrentie<\/a>","<a href=\"https:\/\/ioplus.nl\/archive\/en\/category\/community\/\" class=\"advgb-post-tax-term\">EU Inc<\/a>","<a href=\"https:\/\/ioplus.nl\/archive\/en\/category\/community\/\" class=\"advgb-post-tax-term\">European Union<\/a>","<a href=\"https:\/\/ioplus.nl\/archive\/en\/category\/community\/\" class=\"advgb-post-tax-term\">startups<\/a>","<a href=\"https:\/\/ioplus.nl\/archive\/en\/category\/community\/\" class=\"advgb-post-tax-term\">startups<\/a>"],"unlinked":["<span class=\"advgb-post-tax-term\">competitiveness<\/span>","<span class=\"advgb-post-tax-term\">concurrentie<\/span>","<span class=\"advgb-post-tax-term\">EU Inc<\/span>","<span class=\"advgb-post-tax-term\">European Union<\/span>","<span class=\"advgb-post-tax-term\">startups<\/span>","<span class=\"advgb-post-tax-term\">startups<\/span>"]}},"comment_count":"0","relative_dates":{"created":"Posted 1 year ago","modified":"Updated 1 year ago"},"absolute_dates":{"created":"Posted on November 7, 2024","modified":"Updated on November 7, 2024"},"absolute_dates_time":{"created":"Posted on November 7, 2024 6:30 am","modified":"Updated on November 7, 2024 6:30 am"},"featured_img_caption":"","series_order":"","_links":{"self":[{"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/posts\/491823","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/users\/2084"}],"replies":[{"embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/comments?post=491823"}],"version-history":[{"count":0,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/posts\/491823\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/media\/505415"}],"wp:attachment":[{"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/media?parent=491823"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/categories?post=491823"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/tags?post=491823"},{"taxonomy":"location","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/location?post=491823"},{"taxonomy":"article_type","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/article_type?post=491823"},{"taxonomy":"serie","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/serie?post=491823"},{"taxonomy":"archives","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/archives?post=491823"},{"taxonomy":"internal_archives","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/internal_archives?post=491823"},{"taxonomy":"reboot-archive","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/reboot-archive?post=491823"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}