What Happens if the Same Entrepreneur Establishes Startup in Europe

Entrepreneurs, governments, and academics agree that it’s difficult to start a startup and rely solely on the local market to survive.

Lack of resources, limited urban size, small population and lack of entrepreneurial environment are some of the obstacles to starting and developing start-ups.

The startup and angel investment economy, which reached a transaction volume of 50 billion dollars in the world.

World Angel Investment Congress“, the most important event on a global scale is taking place in The Bosphorus Swissotel in Istanbul 18 and  19 February 2019.

G20 Global Partnership for Financial Inclusion (GPFI)

Global Cooperation Organization (GPFI) Approved Congress for Increasing Participation, hundreds of angels from 80 countries
global angel investment with investor, international fund manager, asset management company senior manager
the participation of network heads has already been received.

What happens if the same entrepreneur establishes startup in Europe with the same business idea and the same business model?

President of World Angel Investment Forum Baybars Altuntaş answers this question:

What happens in the US?

Let’s not forget the basic information: the population of the United States is 325 million, the European Union population is 500 million, the European continent (pan-Europe) population is 750 million.

Based on my experience and observations, I wanted to sort out the differences between Europe and the USA:

Startup’s company valuations are much lower than in the US. In other words, the same entrepreneur has a lower company valuation in Europe with the same team.

To dismiss the staff in in Europe, just as it is in Turkey, so it’s not that easy. You have both a compensation payment and a lot of expense doors that you will pay as a result of a lawsuit filed by the staff in the labor court. There’s no such thing in the US.

The US has been able to develop an exit door for startups (Silicon Valley). In Europe, such an exit door is still not developed.
The number of Unicorns in the US is higher than in Europe.

The investments of the angel investors in the United States in 2017 were 26 billion dollars and their investments in Europe amounted to 9.7 billion EUR.

320 thousand angel investors in the US, 340 thousand angel investors in Europe.

While the startup ecosystem in the US is generally operating in San Francisco and New York, each country in Europe has been able to develop its own startup ecosystem.

The main problem of startups in Europe is that they cannot achieve the required growth in the scale-up phase.

Public incentives for start-up and innovation ecosystems in Europe are far more than those provided in the US.

Terminology; The angel investor in the USA is Angel Investor and in Europe it’s a Business Angel. Angel Investor is an angel investor, and Business Angel is a business angel. The Angel Investor not only refers to financial investments, but the business angel definition includes non-financial abstract investment instruments such as mentoring.

Here is The former US Ambassador to the United States, Anthony Gardner, who has also worked as a fund manager in the UK, is a 3-minute video:

A short comparative analysis between US and EU entrepreneurship

So, Turkey is located where in this picture? If we pass out of the above individual differences generally available in Turkey picture we see across Europe. However, Turkey has this advantage: Both crowdfunding both countries have the legal infrastructure of one of the two angels entrepreneurships subjects. This nearly 500 accredited angel investors in Turkey in 2017 and revealed the startup investment market in the total amount of EUR 512 million – the fifth largest market in Europe.

According to OECD statistics, only 1 in every 100 entrepreneurs can receive investment from angel investors. Only one in ten entrepreneurs can generate a success story. I think the differences I have listed above are of importance in the emergence of these success stories in the USA.

12 Comments