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August 05, 2005
Starting the startups
A while back, I blogged about how only 26 German startups received seed-funding in 2004 and how it seems that Europe is seriously lagging behind when it comes to new entrepreneurs making the news. This trend seems to be continuing. Tom Coates from the BBC has this post that then led to Nat's thread on the subject. One of the comments analyzes the problems behind this pretty well in my opinion.
Even though getting funding (especially seed-funding) may not be as easy in the US as everyone will have you believe, this initial round of money (somewhere in the region of $600.000) may be crucial to boot-strapping an entrepreneurial economy.
In general, experienced European employees will be sitting in a company that provides them with a regular good wage, pension plan, plenty of vacation (6 weeks in Germany), healthcare, a contract that basically means the company can't fire you unless you do something criminal (in Germany that is) and other benefits. So, moving from that to "starting something on a shoestring" probably doesn't exactly light up any entrepreneurial sparks in those employees (or their families - a factor that may be even more important and is often overlooked).
I have a very good friend who has been running his own company (several of them actually) since school - and even though he has been very successful as an entrepreneur - he still makes sure he spends several weeks a year over in the US "in the Valley". He says that soaking up the culture there - gives him the strength to overcome some of the problems and lackluster he encounters over here.
Unfortunately we don't seem to be any closer to solving these (and other) problems and meanwhile the US based startups - sure, 80% will fail but that still leaves 20% - are at the gates.
Posted by Matthew at August 5, 2005 08:33 AM