Large Geopolitical changes this week caused politics to enter many tech world discussions and the most obvious change has been in Europe. But is Europe now too weak to compete on its own?
The UK has some of the World’s best universities, German manufacturing is legendary and France just produced Mistral. However, there’s little doubt Europe is a much worse place to do business than the USA, for almost any company. So now that European politicians are realizing the urgency of their economic stagnation, what should they do to awaken a sleeping giant?
1. Deregulation
For decades, the EU has provided large incentives for big companies to build locally and create jobs, but that doesn’t help early stage founders. Making it as simple as a click to create a company and raise money is essential. European founders don’t want government help, they want the government to get out of the way.
2. Small Investments
European politicians love to announce big investments with lots of press but the real innovation comes from new businesses, not the companies getting those kinds of investments. For example, instead of investing billions into data centers and supercomputer projects, simply provide more early-stage funding to new startups.
3. US HQs
Even if a business has most of its people in Europe, they will still benefit from a US HQ. From corporate structure to fundraising and legal matters, it’s just easier for most founders to have a Delaware C corp and a subsidiary in Europe. European politicians would do well to accept and encourage this structure, for the sake of job creation.
Europe produces some of the World’s best talent but they’re drowning in bureaucracy, hopefully this week’s political earthquakes will cause a serious change of direction.
Sterling Road invests in idea stage and pre-seed B2B startups based in the US, Canada and UK.
