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Funny enough, I don't actually think the money is quite the problem that people think it is.

Look at the early days of YC. Single digit millions a year was enough to stimulate the growth of a whole ecosystem of startups! Some startups are inherently capital-intensive but most don't need that much money to get to the point of basic viability. There are plenty of private individuals in Europe who could support a $10M a year incubator by themselves, not to mention the many institutions that could do this. And yet... there is no European YC and there never was.

I think it's cultural. Go talk to the top students at the top universities in the US and Europe and you will notice plenty of talent on both sides of the Atlantic - yet far different levels of ambition. Now run an experiment; pay ten of those students a hundred EUR/USD to tell everyone that they're dropping out and starting a startup. Watch the parents' reaction. Watch the professors' reaction. Watch the reaction from their doctor, their baker, their crush, their garbageman.

You already know the result, of course, it's obvious. That's your problem; and by comparison, the money hardly matters.

> The public money is inevitably passed through [...] public sector bureaucrats

I'd phrase it a bit differently -- local (country) regulations, taxes and fees stifle startups in the crib.

Instead of giving it all to a few people to spend buying real estate and mineral rights, you could tell the funding agencies that they're allowed to take risks, or give it to people's retirement accounts and let companies seek public investment.

Honestly, in academia you have good hands too, just not every lab. As in business, you also have not so good businesses.

Giving it to academia can 10x the result, but yes research is risky, that's why it's important it is founded externally.

Companies that profited from research in academia are very happy.

Overall I agree, the current European strategy is not optimal, for both Industry and academia.

Looking at what the billionaires are doing in US politics, perhaps there's something to this.

> The money should be returned to private hands where it belongs and those individuals should be the ones to decide how to invest their own capital

This is not a meaningful statement

‘Returning money in private hands’ does not result in more startup investment, it’s not in the culture to do this.

The money will be put into real estate, bonds, or whatever.

Look at London - it has as much wealth as NewYork or LA but all the money just piles up in real estate or Fintech.

But outside those niches? Good luck getting a farm-tech startup funded, no-one will take a punt.

So it falls to the government to try and kickstart something. As flawed as it may be.

Then they put together a competition for funding that basically feels like a school exam

Europeans don't just dislike capitalism. They've been indoctrinated into thinking that if a business makes money, it must be cheating. The entire continent has Stockholm Syndrome from decades of leftist academics preaching that profit = exploitation, as if every entrepreneur is some 19th-century robber baron twirling a mustache. Meanwhile, they ignore that every single job, iPhone, and modern convenience they enjoy exists because someone, somewhere, took a risk to make a profit. But no, better to tax the hell out of success so the state can "redistribute" it into black holes like subsidized avant-garde puppet theaters and gender studies departments that produce nothing but resentment toward the free market.

These people aren't just anti-growth. They're pro-poverty. The degrowth movement (https://ehne.fr/en/encyclopedia/themes/material-civilization...) is basically a bunch of trust-fund Marxists and tenured academics who've never missed a meal in their lives demanding that regular people live worse so they can feel morally superior. "Oh, we must shrink the economy to save the planet!" Meanwhile, China's building a coal plant a week, India's economy is booming, and the U.S. is drilling, innovating, and getting richer. But Europe? Nah, they'd rather ration meat, ban cars, and freeze in the dark while patting themselves on the back for their "ethical" decline.

In America, a 20-year-old can drop out of college, code an app in his dorm, and become a billionaire. In Europe? Good luck. First, you'll need permits from 17 different agencies, all staffed by lifers who've never worked a day in the private sector. Then, once you finally start making money, the government will take half of it to fund some bloated pension scheme for bureaucrats who retire at 55. And God forbid you try to fire a useless employee labor laws make it easier to divorce a spouse than to fire a guy who shows up drunk every day. No wonder Europe's last big tech company was Spotify, and even they're based in tax-friendly Stockholm because the rest of the continent is a regulatory warzone.

The ultimate proof that Europe's system is broken? Its smartest people leave. Engineers, doctors, entrepreneurs, they all flee to the U.S., Switzerland, or Singapore, where they're allowed to keep what they earn. The ones left behind? A shrinking workforce of aging socialists who still think the government can just print money forever without consequences. And when the economy tanks? They'll just blame "greedy corporations" instead of their own economic suicide pact.

The funniest (and saddest) part? The same anti-capitalist activists using iPhones, riding in Ubers, and ordering Amazon deliveries are the ones screaming for the destruction of the system that made those things possible. They want to abolish private property while living in nice apartments, end globalization while wearing clothes made in Bangladesh, and "eat the rich" while sipping $7 lattes. The cognitive dissonance is astounding.

If you want to see what happens when ideology trumps prosperity, just look at Europe. A once-great civilization now hostage to bureaucrats, academics, and activists who'd rather see everyone equally poor than let a few people get rich. The U.S. has its problems, but at least it still rewards hustle. Europe? It's too busy taxing, regulating, and guilt-tripping itself into irrelevance. Wake up, Europe. Capitalism isn't the problem. Your hatred of it is.

I disagree. The pie-in-the-sky academia dreams are not risk, they are safety. ITER and CERN and similar do fascinating research, and I don't mean to throw any shade their way, but they do not represent risk. There's not any possibility of failure. Things could go completely sideways and papers would keep getting written and no bureaucrat would lose their neck.

On the other hand, most startups have the ability to be total failures. If your social network, or your rocket company, or your new type of airplane collapses, it is a total loss. That is risk.

> they’d also fund insane-risk pie-in-the-sky academia dreams

Just out of curiosity, can you throw a couple of examples?

That's part of the problem. 6 months is too long for an early stage venture to get capital unlocked.

And this rightfully causes a lot of us to worry that this foreshadows a significant lack of domain experience in the EIB's proposal (which btw hasn't been made public yet)

Imagine a committee of 10 people granting funding to a firm to commercialise NFTs of digital fashion where the owner of the company is also a member of the committee. The company isn't even a real company but a general partnership without limited liability. Your inquiries into this affair under the public information act get stonewalled by a obscure law that where voted on as part of the budget of 2018. When members are asked about this incestuous relationship they react in an indigenous fashion saying there can not be a conflict of interest because they abstained from voting on their own project. You make some noice about this and you get ostracised. This is just one example.

A dutch sociologist has coined a term for this calling it network corruption, we had to invent a word for it because it is so prevalent, there isn't even a page about this on the English language Wikipedia: https://nl.wikipedia.org/wiki/Netwerkcorruptie

Personally I wouldn't call it corruption, at least not all of it. If you were to drill down into the individual grants, you would find a lot of things that are broadly useful but not revolutionary. There's 4M euros to produce a new additive for beeswax and 500k euros to research migratory snails and 6M euros to study some new roads and that sort of thing. There's certainly obvious corruption too, but it isn't the majority of grant money. Most stuff is just very boring and vaguely useful.

I think a more useful description: it is an ossified structure where you have to play by the rules. Much like, say, the Catholic Church. You're not going to get a grant for your startup, or become Archbishop of Salzburg, by having an idea and sending some emails. You're going to have to fully commit yourself to the institution over a period of decades, and then you're in, and you're respected, and you can do some things, as long as they're not too revolutionary. Is that good for innovation? No. But corruption? I think it's something else.

No, it's the result of the public's/politicians' pathologic risk aversion and swiftness in calling everything corruption

Since it'd be obviously bad (sarcasm) if public money were spent on projects that deliver nothing or the people receiving them used them for anything other than the narrowest interpretation of the goal then you absolutely (sarcasm^2) have to have 50 different layers of checks and plans and assessment to make sure the little money is spent on the entities that lie the best. But at least no opposition politician can complain someone bought a fancier watch than they'd like or didn't deliver enough

Anyway the EIB is a different kind of funding process than EU grants and should be more effective (even just because capital doesn't come out of the EU budget or member states directly), though how much I don't know

It's a weird kind of corruption where the most diligent and patient and boring wins

Hah!

I studied at an excellent Dutch university that's an EU funding darling and had plenty of connections. But because I had "just" a bachelor's degree from a top university, plus substantial relevant experience, nobody would take me seriously. Even with a master's, you will find most people think you are unserious in most "hard" fields. You often need a PhD. And then God help you if you choose to leave the existing ossified structures of academia and industry.

And then you still run up against the issues of risk tolerance (which is zero) and long timelines.

Look, the stated goal of this program is to compete with American venture capital, right? Then look at the founders who got American venture capital money. Look at how many don't even have a bachelor's! Count the number that participated in traditional structures of academia and grant-receiving corporations. Virtually none of those people would have ever gotten a dime of this money, let alone an offer to collaborate from a university.

I don't know what price you'd pay in your hypothetical scenario, but I would say that European universities often take a larger chunk of equity than US unis where spinouts are concerned [1]. Most US universities take between 0-5% equity, where EU could go to 10%, and UK unis up to 20-30%.

[1] https://www.spinout.fyi/data

Ha! You must have never dealt with European universities.

When I did that university's cut was 30 to 50% of shares at a top Durch university.

Yeah this, in fact forget local and just write to researchers in your field, or go through dedicated network events. Finding a university researcher with a common interest in a field who'd consider the opportunity to be subsidised for the next 3-4 years working on stuff they're interested in isn't the hardest hurdle deeptech startups will face on their road to commercialization, especially when the alternative people treat like it's some kind of meritocratic sieve is "get warm intros to a VC class so insular some of them write unironic LinkedIn posts about how it's impossible to be successful outside the Bay Area"

(Or just use one of the funding mechanisms that attach little or zero weight to academic collaboration)

> Startups having the sole purpose of skimming funds by being the technology partner to some academic.

Is cynicism about motives necessary?

I believe most people have enough self-deception and denial, that we don't need to assume fraud or theft. Similarly charities often end up being self-serving leeches - but the people seem to believe they are helping. Maybe I'm just naive? It is possible that most people in New Zealand are not so focused on intentional theft and fraud?

In New Zealand I've watched our government burn fucktons of money trying to invest in university "innovation". Academics convince politicians that they have valuable ideas, and politicians want to believe universities produce value. However the government funding is horrifically managed (no business sense) and the startups lack the right genetics and fail (even if matched funding from private investors). New Zealanders lack an entrepreneurial learning environment (maybe EU is the same): founding is difficult and really difficult if you've never watched someone close succeed.

I believe the root cause is that academics are not business/financially oriented, so the startups fail because they are not businesses. Plus the organisations picking investments are academic heavy and are not run by good capitalists. Academics often have good valuable ideas. But academics tend not to be hyper-focused just on business outcomes or they are not money focused. Business founders need to focus on profit (not status hunting, and definitely not looking for academic recognition).

I wondered for a while whether the cause was my own selection bias (startups mostly fail so I saw them fail) but I don't think that was the cause.

Also the government investing organisations love heavy handed shitty governance (and legal overcontrol bullshit). The principals believe their advice and overview is valuable. The investors put in bad CEOs and also force the businesses to make poor decisions. I've seen private VC funding make the same mistakes.

It is really sad to see good ideas get murdered by people with government money: I'm sure they believe they are helping and that they are trying to help (I'm not that cynical about motivations).

Our current government has just announced another 100 million to go towards academic startups. I just fucking wish our government would spend the budget instead by removing unnecessary red tape and to improve tax incentives (in New Zealand the incentives to grow businesses or create export income are fucked in my personal experience).

Both is true: a lot of money is lost to bureaucracy and startups get funding, although it's not that easy imho. And the amounts are laughable in my experience, that's the biggest problem. Yes, it's nice that I get a kickback on research costs or whatever, but the process takes weeks and the returns are dismal. YMMV tho

A big factor is which country is actually disbursing the funds, the EC doesn't really do so directly

Basically like this:

* If the result is good and useful, the credit goes to the member state.

* If the result isn't good, it's the fault of the EU.

Similarly how good Champaigne can only come from one place ;)

> On the other hand, I also read stories how startups can successfully bootstrap themselves via generous support of the government, like tax deduction for small companies, unemployment benefits for founders, low-interest loans, venture investment, free mentorship by very experienced and connected executives, and etc.

I’m not seeing EU grants in that list. In general I’d say anything the bureaucrats can’t ruin with their gatekeeping, friendship corruption and overvaluation of social status is a positive. Anything they can ruin they will.

I know people who've taken money through these routes. The biggest surprise is the paperwork; since it's public money, everything must be fully transparent, and the government needs to justify why funds went to a specific person / entity.

In contrast, private investors have more discretion and fewer stakeholders to answer to.

They are bureaucratic and risk averse.

You could go on unemployment and cost them for a year or two, and they instead subsidize you starting a business for 6-12 months to the same amount. Worst case, you fail, and they spent the same amount they would have nevertheless.

Low-interest loans you won't get without taking on personal liability for your business loan. It's low-cost capital, but it's also low risk.

Tax-delays/exemptions for small companies isn't a big bet, it's risking a fraction of a fraction of a percent.

Venture investments by the government is rare (for good reasons, it'd be a huge opportunity for corruption).

Just like NGOs and charity in general.

Feature, not a bug.

I share your sentiment, I'm also very skeptical that this money will be wisely used, a good chunk of it probably sinks into the Treibsand of European bureaucracy. And significant amounts will go to shallow ideas of startups. Europe just doesn't have the right startup spirit. It's over regulated and risk averse. Both fatal for a fruitful development.

Please don't comment about the voting on comments. It never does any good, and it makes boring reading.

I haven't downvoted you, but I understand why some might have because every thread on Hacker News regarding Europe and software attract this exact comment almost as if written from a template. Doesn't make it right or wrong, but it gets a little stale.

It’s people who either don’t know how it works when dealing with the EU or maybe they are beneficiaries. /shrug

> that bootstrap themselves like cars, civilian air planes

A civilian airplane manufacturing business takes decades to get off the ground, and is practically impossible to start without heavy government involvement. Cars are not that far behind. How did you pick these as businesses that "bootstrap themselves"? Bootstrapping requires a non-capital intensive business model. These are the opposite. These are businesses running on decades of momentum and government support.

Yep, so much this (and Draghi concurs). It's kind of bizarre that the EU needs to do what it's biggest critics fight the most: integrate it's markets and eliminate cross-member bureaucracy.

> bootstrap themselves like cars

You mean the cars whose manufacturing has to be stopped because they don't know how to use one chip in pace of another, while Tesla was chugging in numbers because they were the only ones who knows how to program a new chip.

>There's not much of a braindrain of engineers as far as I can tell

Not in your bubble: top university in the tax heaven EU country with some of the most US companies. Of course those grads can just stay and get FANG jobs there but not everyone comes from the NL.

>the people running succesfull startups in the US do not posess any particular brilliance

Their advantage is easier access to more capital than those in the EU. Capital helps with success even more than skills. Hence why the US has more big successful companies than Europe.

This isn't the point. More knowledgeable people at lower levels can help. But when leadership lacks domain expertise it's very hard to know what to do or not do, what will help and won't. She could be smart and lean heavily on industry experts but that still makes her the wrong choice to lead it when one of them could have done so better.

This is the equivalent of private equity installing someone who knows nothing but MBA material at a biotech company or a ML research company or anything else where domain expertise can actually help.

The EU is actually better at bringing in bits of "technocracy" to let industry experts lend their expertise. I don't know why they are doing that here. I think it's the wrong call.

It's a much better idea to give it to people who actually have experience turning financial investment into a valuable technological product than giving it to bureaucrats with no such experience.

Leave Sweden is the solution for people like you who don't appreciate how things are arranged. You can be much more successful in a more mature economy where there is a better connection between productivity and career opportunities / renumeration.

The public sector isn't allowed to hire people and do things that could be perceived as competing with the private sector, which drives paying consultancies for things like software development as soon as the result could work as a product (i.e. more than one government body would want an instance).

Procurement ("lagen om offentlig upphandling"), one of the big wins for the right, is also fundamentally broken in that a lot of the public servants involved are fresh graduates that soon gets poached by private corporations and the organisational response is to sign long term contracts with huge corporations that supply many different things and are also allowed to bring in subcontractors for the things they don't. This effectively destroys any possibility of commercial competition.

It's purposefully designed this way by conservatives.

That’s the typical racket, yes. 20 years ago I saw it as an unfortunate consequence of policy mistakes. But now I’m more inclined to see it as the intended purpose of these systems. ”It’s not a bug, it’s a feature.”

I was primarily referring to EU initiatives. But the national ”innovation system” here in Sweden is pretty much the same. It’s a cultural issue, not an organizational one, IMHO.

EU government funds are also similar.

> Research departments at large corporations with the right contacts can get campaigns designed for them, more or less, which I disagree with but it's not like it fits the picture you give.

Not sure what you mean... It fits perfectly with the picture I’m trying to convey.

Compared to whom?? The EU??? Lmk when they’re building anything competitive.

How many of the top level comments are just blanket assumptions that this is going to be corrupt without any pointing at specifics of this proposal? The knee-jerk reactions are strong

Seems comparison makes certain regions look good or bad, and that could lead to accountability which would be good or bad depending upon how you benefit or not from the policy.

That’s part of the problem with globalists who want a single world government, one government for the world deprives the people of choice.

Another model would be for the EIB to commit money to an investment fund and then run a tender process to select a private sector firm to manage the fund. At the individual investment level, give that manager the usual discretion to invest and manage that VC funds have and pay them a market rate with an appropriate fee structure to do it.

You could also insist on the manager raising a certain minimum amount of matching private sector money to "keep them honest".

Governments would never deploy capital in ways that are stupid, corrupt or gatekeeping.

One person’s stewardship and due diligence is another’s person’s definition of fraud wealth transfer and crime.

In comparison to just giving money today? Just look at the number of failed green projects in the EU where somehow the executives got rich and nothing got built or if built failed to deliver. At least with matching the private sector has to put a eur down for each it receives and the fund would own participations in ventures.

Meaning the EU should stop being so risk adverse, stop having 27 different regulatory bodies for the same thing and the list could go on.

People here talked about Israel: the Shekel is not a currency anybody except them use, but they churn out successful startups at an incredible pace. They use their tech talent very well and are not encumbered by a myriad of regulations.

There's something magical about California and New York (another tech powerhouse).

NYC has this vibe of "getting stuff sone, no BS" kind of mindset. California has this relaxed vibe but at the same time the sky is the limit. I think it has something to do with how the sun shines there and the ocean. You feel like just working and things are going to be OK.

I am always more productive in NYC or LA. And I have no real explanation for that.

Seems plausible but my experience with EU bureaucracy doesn't give me a lot of hope that this is worthwhile for startups

True, but the EU startup ecosystem is small and shared. Only so many places to raise capital from.

> The EU is getting ready to brain-drain the US.

It is not going to happen, this is just day-dreaming. Yes, I saw the news, but you can't compare a few tens of people wanting to leave the US for ideological reasons to millions of people that stay in the US because they can fare better and make more money or start new companies overnight because they have a great idea.

I make 4x in the US what I’d make in Germany.

The US is not adopting isolationist policies. It's adopting more nationalistic policies, which is no different than how China has been running its economy (and politics in general) for decades. And specifically the four year Trump Administration is pursuing heavily nationalistic policies. There's no evidence the Democrats will keep much of Trump's policy direction, as certainly the Biden Admin and Trump Admin could hardly be more different.

Let me know where you see the US military pulling back from its global footprint. How many hundreds of global bases has the US begun closing? They're expanding US military spending as usual, not shrinking. The US isn't shuttering its military bases in Europe or Asia.

The US is currently trying to expedite an end to the Ukraine v Russia war, so it can pivot all of its resources to the last target standing in the Middle East: Iran. That's anything but isolationist.

Also, the US pursuing Greenland and the Panama Canal, is the opposite of isolationist. It's expansionist-nationalistic. It's China-like behavior (Taiwan, Hong Kong, South China Sea, Tibet).

Can you back this up in anything but anecdotes?

Those are all irrelevant. The market will magically fix everything, don’t you know that?

I hope all this stays true without growth. I hope it wasn’t a temporary utopia built on the tail end of centuries of theft and violence all over the world, and a relative peace subsidized by the US Navy. American problems generally last 4 years, and even our bigger problems sit on top of relative self-reliance. As far as I can tell you can’t even heat your homes in winter without Russian or American gas.

I think the concern is the fiscal ability for eu nations to continue to pay for the things that help it stay high on those metrics, especially without innovation.

The productivity numbers for the eu are dreadful so something needs to change.

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> Imagine Steve Jobs, Larry Page and Sergey Brinn back in the day, waiting for handouts form the US government instead of VCs.

The US hands out money extremely generously through federal grants, DARPA and orders which have to be made to American companies through things like the Buy American Act. Silicon Valley itself was spurred by the DoD spendings.

Yeah! Apart from sanitation, medicine, education, wine, public order, irrigation, roads, the fresh-water system and public health, what have the Romans ever done for us?

the USA venture system has built the most addictive and invasive tech system yet -- ads + phones. Hot on their heels is an invasive and controlling behometh called China. None of these are clear winners, in fact it remains to be seen how long this is stable. Its not intellectually honest to claim victory for the USA based on VC practices IMO

You are twisting my words. I informed correctly she has zero experience or credentials to manage this project. She was picked because she is part of the Spanish Socialist party (currently ruling) instead of being picked for being the right person for the job. I would've mentioned the equivalent if it were a politician from Macron's center-right party, for example.

Socialists milk the funds for their NGO friends, and likewise the center-right politicians divert the funds to their corporate backers. Two sides of the same coin.

If you assume that the previous poster is right and do a casual web search for corruption with EU fudns, will you find anything?

It is so prevalent that your question makes as much sense as demanding the names of soldiers killed in the Ukraine war to believe the war is real.

Only names?

Is it even valid unless it's full names, dates of birth, addresses, bank account numbers, receipts and notarized video evidence where they explicitly admit to being corrupt?

if enough workers are displaced due to this, and they do not receive some form of income, the politically dominant class will be in danger

> 57 million UK adults getting £1000 a month

You phase it in. You start with something a little more than UC of, say £400/month for people not receiving pensions. You increase as it can be afforded. it gives people a great deal of security.

So far fewer people (37m of working age) getting less than half the amount you came up with costs. That is £278bn offset by reducing welfare spending. You would need to continue housing benefit and some others if it was that low so you could not dismantile the entire system.

> It'll leave you dying on the street in 1/3rd of the country

I doubt that - it is not a decent income, but most people would earn on top of it. That is the whole point. It would give people a greater incentive to work than the current system which reduces welfare if they earn. A lot of people will not work because they are no better off if they do.

OBR projects welfare spending to be £338bn by 29/30 anyway.

You are leaving a lot of things out. For one thing if it was taxable income (as pensions and many benefits are) tax revenues would increase too as most people would pay on it.

It would provide a huge economic stimulus which would further increase tax revenues. People on low incomes spend more of their income. Some of that would be on things with consumption taxes.

It would give people a great deal of financial security.

You cannot calculate the effects of a huge change like this on the assumption that nothing else changes.

£1000 a month for a single person certainly sounds like poverty, but £2000 a month for a couple sounds more manageable. If they each find a side gig that pays just another £100 a week, they're suddenly into the top half of households [0] - even better than that outside London.

[0] https://www.ons.gov.uk/peoplepopulationandcommunity/personal...

This also assumes that government tax revenue doesn’t drop, and with most of the population unemployed, that will likely not be the case.

Europe's finances are in dire straights under the heavy pensions and existing government spending. The US also has high debt, but has much lower taxes than the EU so can theoretically raise revenue if it really needs to, while Europe has little room for more taxation

You should ask Isaac Newton (yep, that one) about these strong European companies:

https://royalsocietypublishing.org/doi/10.1098/rsnr.2018.001...

Btw: the East India trading company is still used in economics schools as an example of state interference in trade and what can go terribly wrong.

Bad example.

The East India company era had WAY less regulation all around, way lower taxes, less types of taxes, a very attractive simple investment climate (the literal founding of the concept "stock market", in its simplest and most primitive form) and close to 0 (illegal) immigration. They also had no euro, no socialist EU and no self-imposed limitations on energy conversion (there was no electricity, but wind was huge and allowed for mass production of stuff).

In what reality is giving politicians a fund to pick winners and losers in the economy going to prevent fascism?

The tech sector in the "fascist hellscape" is paying its workers 3-4x what Europe is, and Europe is doubling down on the policies that got it there.

>I think you are so far down the propaganda rabbit hole that you can't see the reality

You built your whole argument on a future collapse you've imagined for across the pond, rather than engaging with the topic at hand. You are the one who refuses to see.