On 26th and 27th of November Dominika Walec, Head of Growth at #OMGKRK startup community along with Matt Delac from SheCodes had the pleasure to visit the European Parliament and present their insights towards running startup operations in Europe. They were invited by Stripe to open up more channels of conversation between startups and policy-makers.
In this article, Dominka describes the visit and its importance for Krakow’s startup ecosystem in detail:
The purpose of the visit was to share experiences on establishing and scaling technology-based business in Europe and to inform newly elected Members of the European Parliament (MEPs) about particular challenges that the European startups are facing. We also wanted to share our ideas on how MEPs can support and empower European startups and scale-ups.
During the visit, we managed to present an overview of our startup ecosystem and address various challenges that our startups are facing in terms of scaling their operations globally.
We particularly focused on the following aspects:
- Differences in running operations among EU member countries, mainly discrepancies in VAT rates which are causing settlements difficulties;
- Problems with selecting a legal form for a startup entity that is meeting both the requirements of day to day operations as well as all investors expectations;
- Insufficient numbers of private investors in Poland that can not only bring the capital but also the expertise towards scaling the startup business;
- Lack of strong startup ecosystem in Europe and insufficient recognition of startups as a source of innovation and new job creation.
- Lack of EU leadership in setting Pan-European directions of innovations development and shaping startup ecosystem growing division between EU policymakers and the tech industry in their visions on the EU’s digital economy.
- Insufficient pool of EU based investors and large dependency of startups from US and Asian investors that are setting the directions for EU startups development, shaping the landscape of innovations and deciding about the business models applied. EU founders are often adjusting their pitches to investors expectations adding SaaS, AI components only for funding purposes. (The most recent study conducted by Stripe and Tech.eu & Stripe on the startup ecosystem in Europe indicates that 75% of late-stage investments come from outside of Europe)
- Challenges with scaling hardware type businesses outside of Europe due to separate safety compliance certifications indicating conformity with health, safety, and environmental protection required in various markets. The necessity to apply for multiple certifications highly increases the costs of operations and blocks the product developments cause each new iteration requires recertification.
The Way Forward
Based on the above problems we have presented the following recommendations for MEPs:
- Joint regulations for EU startups (equal tax rates, similar legal entity standards). We also discussed the idea of creating a European Startup entity that could be a starting point for unifying other elements like employment regulations, labour costs, maternity leaves etc. across member states.
- The necessity to extend CE certification to multiple countries outside the EEA to support global expansion of EU products.
Our visit to the European Parliament came a few days after Atomico’s new State of european Tech report highlighted a concerning level of misalignment between EU policy-makers on the one hand and European startups and scaleups on the other.
The report, published on November 21, points to a growing division between EU policymakers and the tech industry.
The report notes that “Policymakers genuinely want to help, but they don’t know a thing about tech startups, and they usually don’t count tech entrepreneurs as friends or acquaintances, which makes it even more difficult for them to understand what’s going on.”
The visit was a first step towards establishing a better communication channel between our Startup Community and Members of the European Parliament.
Multiple MEPs had expressed their interest in hearing our further thoughts and updates related to our problems and challenges.
Special thanks to MEPs: Frances Fitzgerald (EPP, IE), Eva Kaili (S&D, EL), Sean Kelly (EPP, IE), Ondrej Kovarik (RE, CZ), Karl-Peter Repplinger (Director for Economic and Scientific Policies), Inese Vaidere (EPP, LV) for taking their time to meet with us and your interest in hearing our further insights.
Many thanks to the whole Stripe team for inviting us and arranging this visit.
We are looking forward to further align with Stripe to develop initiatives and tools that would be a regular source of information about startup needs for EU policymakers.