Money is cheap in the US, and most of EU countries are quite pleasant to live without obscene amounts of money in the bank (basically thanks to public services), so any good offer it's quite convincing.

Not to mention that EU governments don't see tech companies as strategic assets, unlike the US/China.

So I guess it's a mix of culture/policies.

In the case of growth companies, it's definitely not a talent thing, the American financial system has a well developed pipeline for growing ideas and providing endless access to capital. Europe simply doesn't have that. We don't even have consolidated pricing for our stock markets, even after many decades under the EU, something the US has had since 1976. It's a joke, and no surprise all eyes are on and money flows into the US for speculative investment

This doesn't just apply to growth companies, or tech. It's a fundamental difference for all companies no matter how you segment Europe.

It is a difference that I don't think Europe will ever get past because changing it will be viewed as an attack on beliefs and ideals which can't trade-off to be similar to those in the US or China.

(FWIW: I'm an UK/Irish citizen living in the US.)

Maybe that was once true, but it certainly isn't true today.

Like, the whole TikTok thing is being ridiculous, in my point of view.

For example, strategic assets for the EU are airlines, or automotive industry, it's where you've seen government intervention.

But I'm not saying it's a good thing! In my country China bought the only Energy company we had - how isn't this considered a strategic asset?

Sometimes I think EU is too naive, or the whole "trying to lead by example" doesn't work financially/growth wise.

Only China has taken active steps in fostering those companies from nothing.

I don't know about western europe, but most of the tech startups in eastern europe have a sales/VC representation in the US for a reason.

Entirely? Google revenue in 2014 ($66B) to 2019 ($161B) is 143% growth over 5 years.

No doubt monetary policy has an effect, but tech companies have grown substantially over that time as well.

Valuations are important. Valuations are affected by the monetary policy/liquidity cycle. And Google's valuation is growing faster than any rational measure of economic value.

I did just eyeball it from a few months before. And note, I said 2000...not 2001. And even at the end of 2001, it did nothing for a decade plus.

What I don't get either is why quarterly reports in the current situation are so important for stock value in the current market climate, as in why did tech stocks soar so much after quarterly reports got announced? These numbers aren't showing anything other than how the companies perform in the current, corona-affected, economy and are not representative of how it's going to look like in a post corona world.

Because the future is uncertain, and that uncertainty was baked into the price? And there's nothing to say that "baked into the price" has to be accurate... investors could have collectively read the tea leaves wrong.

> These numbers aren't showing anything other than how the companies perform in the current, corona-affected, economy

Which could be considered passing a stress test with flying colors - maybe people are interpreting this as "which businesses are robust or anti-fragile for a once in a century event". Or just as easily - maybe investors are betting there's a chance that some of this current context is the new normal.

I'm a little confused as to what you're trying to ask overall. Markets and investors aren't perfect, the future is uncertain, and random walks are everywhere.

But let's not confuse profits, or market cap, with innovation or value.

USDEUR stayed the same (both inflated together), but there are no new tech companies in the EU to show for.

This is all while "traditional" businesses have had governments shut them down or tell their customers to stay at home.

If you were an investor paying attention over the last 6 months you would be selling everything else and buying tech.

Also a few billion people stuck at home much more than usual this year.

Meanwhile, markets like e-commerce, telecommunications and online entertainment are booming thanks to the stay-at-home culture, and no doubt there will also be an entire generation of new and/or rapidly growing products and services aimed at supporting home offices, flexible work patterns and more distributed teams.

I'm not sure we'll ever go all the way back to how things were now, even if someone discovers a perfect cure for the coronavirus problem tomorrow. I think when the dust has settled, we will have learned that it's often useful to have specialised workplaces, but also that working from home is fine for some people doing some jobs at least some of the time if they want to. I suspect we'll see some big, permanent changes in industries like retail as a result, and that this in turn will sustain at least some of the boost that a lot of tech stocks have received recently.

Even for some companies that have had some boost, the spike in share prices has been over exaggerated. One glance at the price movements and it’s fairly obvious. A company like DataDog or Fastly is NOT 2-4 times as valuable just because more ppl are working from home. This market is 99% fed-induced, and 1% actual fundamental improvement

For the uninformed, what monetary policy exactly is driving this growth?

https://www.reuters.com/article/us-alphabet-bonds/google-own...

"Of the $10 billion on offer, the $1 billion five-year tranche was issued at a coupon of 0.45%, the lowest coupon seen on a U.S. corporate bond at that maturity, according to Refinitiv data, which goes back to 1980."

I can give similar links for Apple: https://finance.yahoo.com/news/apple-joins-tech-borrowing-bo...

The Coronavirus CARES act enables the Federal Reserve to buy Corporate Bonds. This is one of the factors driving down the bond rates: https://www.proskauer.com/alert/corporate-credit-facilities-...

"The SMCCF, initially funded with $25 billion of equity from Treasury, will leverage its equity ten times when acquiring corporate bonds from investment grade issuers and ETFs whose primary investment objective is exposure to investment grade corporate bonds. It will leverage its equity seven times when acquiring corporate bonds from issuers rated at below investment grade, and from three to seven times when acquiring other eligible assets, depending on risk."

So if you're a large corporation capable of selling bonds you can get a loan for far less than even the extreme low end inflation predictions. The big tech companies have the ability to take advantage of the current climate.

Look here for ex. https://fred.stlouisfed.org/series/MABMM301USM189S

https://tradingeconomics.com/united-states/government-debt

One way to juice the economy is just print more money and give it to everyone. Everyone's richer, yay! Except you haven't increased production or necessarily consumption, so prices will just equalize to the new money supply and you get consumer price inflation.

For QE, we got smarter, and just gave all of the money to the bankers, because that's what all the economic experts who work at banks said to do. So all of the inflation happened in assets held by banks and rich people instead -- tradeable securities and real estate in coastal areas.

If you've got months or years of runway from external funding, that's irritating but not a big deal. You hire someone to deal with it and get on with more important things.

However, if you're bootstrapped and at first it's just three friends working out of someone's garage or a family business with an office in the dining room, that red tape can be a significant overhead that holds your business back from taking on staff and dedicated facilities and so on.

Given this culture, it's hardly surprising that a lot of UK start-ups with ambitions of hockey stick curves look to the US for support. The alternative is fighting your way out of being a lifestyle business for some number of years, at the same time as trying to do whatever it is you do that actually has value.

This is at all levels of banking and financing. In the US, the balance is very different for almost all types of business. Of course, you can find exceptions, but investors will engage without the level of due diligence, or qualification, that is required in Europe.

There are various papers like Assessing the Potential for EU Investment in Venture Capital and Other Risk Capital Fund of Funds (https://ec.europa.eu/newsroom/horizon2020/document.cfm?doc_i...) which cover some of the issues.

I do think it makes growing a business slower and more expensive than it needs to be.

Some examples that come to mind from from recent years are the Consumer Rights Directive (soon to be superseded, but the UK will probably have fully separated from the EU by then), the GDPR and ePrivacy Directive (ditto), and the VAT rules (of which there are so many variations depending on context that I won't even try to list them all here).

To be clear, it's not that I object to things like strong consumer protections or privacy rights. On the contrary, I am a strong advocate of such things, and my own businesses have never done the sort of shady stuff in these areas that tends to attract criticism. I just find the EU's approach to these things unnecessarily onerous and not always effective at achieving its intended goals anyway.

It is not structured to support "startup"-type companies like those in the US. Yes, Silicon Valley is the focus on HN, but the range of options beyond what you find in the UK is available in many more places than just SV.

In the UK and Europe you can potentially find an angel investor. Once you go to the next levels of finance then it gets tougher. In the US, you have access to the next level of VC finance which comes from a relatively large pool. Most financiers in Europe tend to be conservative, although there are efforts to change that. Hence, companies flipping to being US-based.

Growing a business here is harder.

You want an office? Welcome to the wonderful world of business rates, commercial lettings, site security, ever-changing transportation and infrastructure arrangements that will be largely out of your control, etc.

Hiring your first employee? Welcome to employment contracts, documenting policies for things like grievances and disciplinary actions that you hope you'll never need, arranging pension plans, H&S regulations, statutory leave, benefits rules, and all the other HR fun and games.

Providing a service online, where your customers might come from abroad? Welcome to international tax regulations that you can barely keep up with, never mind properly comply.

Don't want to have users steal back all the revenue you ever took from them based on a legal technicality? Better have a good lawyer to write all your documents.

Don't want an intervention by the data protection regulator? Better make sure all your GDPR compliance processes and documentation are up to standard.

Remember to file your real-time payroll data and VAT returns and confirmation statements and annual financials on time. Don't forget you'll need to use suitable online systems for a lot of this stuff now, since HMRC insist on it, and you'll need to get anything else you're using for financial management integrated with them.

Don't forget your public liability insurance. And employer's liability insurance. And professional indemnity insurance. And property insurance. And...

Now, you can outsource a lot of this work. For some legal and accounting matters, you will have little choice, unless that happens to be your field of expertise. But of course the services offering to do it for you will charge you, and even if it's just a thousand pounds here or 3% of your revenue there, it will soon add up. Until you're big enough to have in-house people for things like HR, facilities management, IT, legal and financial, that's how it goes.

Now, run along and make sure your designated H&S officer has checked that all your employees currently working from home have suitably ergonomic workspaces set up, recent sight tests done and glasses/contacts provided if they're working with computers, and proper reporting in place for all the extra expenses they'll be claiming due to the sudden home-working this year, because you could be on the hook for a big bill if you get any of that wrong.

Sure, there's stuff that is infuriatingly misguided, but all in all I rather like living in a place that puts the onus on the employer when it comes to all sorts of financial and practical issues that an employee might deal with.

I definitely don't want things to be more like the US, much as it complicates things for myself as an entrepreneur and employer.

The problem, as always with these things, is that this only helps you if you're employed in the first place. If the burdens of taking on a new employee, particularly the first one, are too high, then that lifestyle business run by its founders will remain a lifestyle business run by its founders, possibly for years or even forever.

Similarly, if you're a customer shopping for clothes online at the moment, it's great that UK consumer protection law requires vendors to give you 14 days after delivery to change your mind and cancel the purchase, and the vendor must accept the return without charge if you do. You can buy multiple sizes or colours to try things on, or just try a few different styles to see what you like, and then send the rest back, and all it costs you is a bit of postage.

It's less good as a merchant, when the reality is that a significant fraction of your returned items will come back unfit for resale and unless you can prove they didn't reach the customer already in that state you'll still be on the hook for the refund. Even for goods that do come back in as-new condition, you'll still have to go through the whole restocking process and you'll be missing that stock for as much as 28 days. Generous return policies didn't matter quite as much a few years ago when the law was introduced, as most people were still shopping for their clothes in bricks and mortar stores and would try things on in-store before buying. Right now, with fashion retailers going bust all over anyway, this surely isn't helping.

I don't want to hijack this thread, but why is that? Apropos to the political situation in the US right now (ugh), it's a constant point of the right wingers that you should vote for them because we don't want to become like them.

I honestly don't know the answer. Tech didn't suffer under Obama, but he wasn't particularly liberal. I wonder what the simulation of a left wing POTUS would do for Americans.

This short sentence contains irony.