Europe in general have a problem with entrepreneurship. Stockholm, Berlin, London are the exceptions and even they don't really do that well compared to SV.

Zendesk is also Danish originally, Tradeshift is, Podio.. they all end up leaving because the market opportunity in Denmark is very small (6mio) and there isn't easy enough access to talent when you need to scale up

The biggest mistake many entrepreneurs do in Denmark is that they start with Denmark as a test market and so it's very hard for them to actually scale both mentally and practically.

The primary issue in my mind isn't really income taxes (although they do play a role). Denmark have a progressive tax system which means the top bracket pays around 52% or something like that (and cars have 180% taxes on top of the value of the car).

Denmark also have one of the most beneficial holdning company tax rules in Europe which allows for a lot of possibilities for startups.

And keep in mind that it's very easy to be unemployed and build a startup in Denmark. Healthcare is free, education is free, childcare is heavily subsidized, you get social benefits.

What really hinders Denmark is a combination of a small market, small ambitions and the lack of a proper ecosystem with alumni (they leave) and not to forget the in my mind crippling effect of the harmonization of the EU (not the common market which is great) and last but not least. There is very little tradition of scaling a company big (Denmark haven't created a +1000 person company for the last 50 years or something like that)

Correction: Europe has a problem with hyper-accelerated, Silicon-Valley-style VC-fueled entrepreneurship. I see a lot of bootstrapped/slower-growth entrepreneurship in Europe, and that is in no danger of going away.

It's a pretty big problem that none of the large tech companies wether social media, search, robotics and so on are built in Europe.

> Zendesk is also Danish originally, Tradeshift is, Podio.. they all end up leaving because the market opportunity in Denmark is very small (6mio) and there isn't easy enough access to talent when you need to scale up

Podio mostly had a sales-office in SF; most development was in Copenhagen (until Citrix moved most of it to North Carolina half a year back or so)

While I'm not aware of their legal statuses, both Zendesk and Tradeshift has non-trivial amounts of development in Copenhagen.

Realm moved (and was part of Ycombinator, even) and then moved back to Copenhagen.

Falcon.io always had most of their development in Copenhagen and only really moved sales elsewhere.

It generally seem to me that they take a few semesters stateside to get known/funding/... and them move back. I've heard access to talent, employee mentality and "founders' wanted kids to grow up sane" amongst reasons for moving wholly/partially back.

But the fact remains that most who go big aren't.

Podio is now a US company not a Danish one.

Tradeshift CEO has a kid and live in SF.

Zendesk is US.

Skype was never even Danish and was bought by US company twice.

And when Danish startups gets bought it's mostly by US companies.

Universal Robot got sold to a US company.

Even Rocket Internet mostly successful deals was selling to US companies.

The idea that they just take a few semesters is wrong and it's missing the point. Where are all the European companies who buy american startups? Where are the Danish companies who buy Danish or European startups?

There is a general lack of activity in the European startup scene. It's not that it's not possible it's just that it's very unlikely to make it.

Isn't it harder/costlier to find talent in highly competitive SV than it is in Europe?

Could you please elaborate on this? I am genuinely curious to know more.

The TL;DR of parts of my theory is that harmonization is trying to solve a lot of problems politically which might as well be solved by startups and technology.

Furthermore when you harmonize things you end up turning things that might be a problem in one country a law in a country where it isn't. Sometimes it's good sometimes thats bad. But it's not without problems.

It's a complex issue and I don't claim to have a bullet proof theory but I think there is something to it.

Is it time for #Denexit?

Employees could also be required to pay taxes on employee stocks - money that they had not earned yet because they had not sold them.

http://www.business.dk/navne/ivaerksaetterskat-skal-ses-efte... http://penge.dk/pension-skat/ejere-af-medarbejderaktier-risi...

That is a major problem in the US system as well.

This can be a big problem if you exercise stock options, then the price of the stock drops. You might not be able to sell the stock for enough to pay the taxes you owe, and although you can take a capital loss, you can't use capital losses to offset normal income (beyond a fairly small limit each year).

[1] https://www.nceo.org/articles/stock-options-alternative-mini...

Source: I had a fat AMT tax bill precisely because of this. :/

I'm certainly not an expert, so don't listen to me for any financial or legal advice.

Like most Bay Area tech workers, I'm compensated partially in stock. Every month, X shares of my restricted stock "vest", which means, in practical terms, that I receive those shares. That counts as taxable income at the current market value of those shares. To avoid making me pay a large tax bill come April, my employer actually withholds some of those shares of stock to cover the tax bill.

(I've never been entirely sure how this stock-withholding works from a tax perspective. Do they immediately sell those shares and pay the proceeds to the government along with the rest of my income tax withholding?)

I think that your employer actually sells just enough of those shares at the time of vesting to cover the taxes. Any cash remaining difference is given to you in your next paycheck (i.e. 2 shares at $100 ea. are sold to cover $120 of taxes, and $80 is given to you). Could be wrong though.

    In general people in Denmark don't have a 
    ton of money to invest after paying taxes.

Of course, that probably wouldn't apply to non-public investments, and the caps are two low to be usable by Dane angels (far from home in the Bay especially).

Generally speaking, European are more risk adverse than Americans (I'll exclude the UK as Brits are a bit culturally closer to the US).

You will find investors, but it will be very difficult to find someone willing to take risks and bet big. For me they behave more like bankers than VCs.

Don't get me wrong, this kind of investors is fundamental for an economy to function as not all businesses are high risk/high reward and to be honest SV VCs could learn one thing or two about common sense from these folks.

However, it means that if you come with a "crazy idea" or if you are basically saying that you will lose money for several years, it will be very very hard to find an investor in Europe.

The European market being generally also more conservative and much more fragmented, scaling up is also much more expensive.

Last but not least, Americans are very good at finding good European startups and importing them in the USA.

We've had almost 400 years of practice. If we weren't good at it by now then it wasn't meant to be.

I think you're referring to social security contributions for (which pay for healthcare and pension etc.). The amount is in the same ball park as a single freelancer would pay for healthcare in the US.

Do you have to register as a autonomo even if you have zero income? If not, can't you build and start to validate your idea without charging money? That seems to be what a lot of SV startups do.

[1]http://www.ft.com/cms/s/0/55220458-483d-11e6-b387-64ab0a6701...

It seems that many people still find it difficult to comprehend what 1+ billion internet/computer users means for technology companies that are capable of scaling.

There are many VC backed companies that never state their valuation.

There are many VC backed companies that do state their valuation after every funding round and buy up all the press releases [on techcrunch, exhibit a] so everybody knows. So their secretaries, banking partners, trophy wives, and sycophants fawn over them more.

All of those companies have completely different 409a valuations, which are MUCH lower, because you can't just say "well 10% was sold for this much, so therefore 100% is this much". Nobody ever posts those.

The FASB accounting standards are also much more intelligent.

These valuations are literally only for impressionable people that don't want an intelligent valuation.

Here's actual data for those curious: https://www.theinformation.com/comparing-common-stock-valuat...

Technology solves problems, but it doesn't mean every "problem" is actually a problem, or that it's worth solving. There will always be outliers.

Investing in 50 companies and expecting 45 of them to succeed is called being a small business bank.

[1] http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/...

For every Facebook there are at least 10 Pets.coms or, worse yet, Enrons. I'm not sure how pointing out a single success justifies all valuations.

To say we Europeans are all defeatist is a bit of an unnecessary generalisation. ;)

Ads, Analytics, Labs (VR), various dev relations, and more.

I thing this number may be skewed a bit, LinkedIn is more popular in USA than in Europe.

This is just common sense. The best bet is to proudly foster these small companies which go big overseas and also have an ecosystem of smaller players who don't have huge multinational ambitions, likely also funded by these unicorn exits when the money recycles locally.

Of course, tune and craft laws and regulations to create the most output. But stop trying to fight this clustering effect...

What is the word I'm looking for? Hubris? Shortsightedness?

Because of the language borders usually correspond to the national borders of the EU member states. And if not language borders then completely different systems of taxation, employment rights etc.