Is moving your startup from EU to the US a viable solution?
At some point of every discussion with a founder, or in the middle of a workshop about startups and business, someone spots the benefits of being an American based founder, but, the question that comes in my mind is: when moving to the US?
The American dream sounds very magic for ambitious people, especially if you are planning to build a great business on your own.
Achieve something in the EU, firstly
As a founder with ambitions, during the Tech Crunch in Berlin as Shoppi Inc. then, I have been approached by the EU commission and invited to be part of a workshop about public funding; the only reason why I have accepted was because of their value proposition: “We are looking for the next unicorn”, well, since our mascot is a unicorn and our goal is to build a big company, then, I have accepted and joined the workshop.
I had the perception that EU has built for the first time, a public funding call based on the American dream values, as you can see from their website “With the European Innovation Council pilot, we set out to support high-flying entrepreneurs with breakthrough ideas and a clear ability to create new markets.”
We’ve applied on May 2018 as Shoppi, to explain further the call has two phases (1 and 2), and you need to apply with an EU company, then, we’ve decided to incorporate in Berlin (there is a post here)
The call outcome is simple, in the Ph1 you receive a grant of €50k, then if you succeed with the feasibility study, you will apply for Ph2.
In the Ph2, a co-investment from a private investor is required. Additionally, the purpose of the Ph2 is to expand in new markets such as the US, then, an investor with offices in the EU is also an excellent fit for the co-investment.
At this point my question is answered, the right time to move to the US is after receiving a first investment in the EU, since I am European, the idea of moving to the US and raising without any previous track record (investment, traction or experience) is not an excellent presentation at any meeting.
Test your startup far from big EU tech-hubs
I have come in mind with the idea of testing my startup in another country since outside of big EU tech hubs the influence of US culture is more robust than the EU.
I have decided to give it a try in Ukraine by registering for Mobile Beach Conference 2018.
We’ve been selected as finalist to pitch, and the jury was very mixed but it was a great opportunity to pitch in a different style than you can do in the EU (problem -> solution -> revenue).
I had the feel of impressing the audience, but, since this is not the US, no one on the jury decided to embrace this big thing. Here the video.
I’ll make you an offer that you can’t refuse
At the conference, I had the opportunity of approaching VCs from the EU, and since we’ve applied for the Ph1, then, I have decided to make them a co-investment offer, so this is a great deal since you are co-investing in a certified business plan by an independent EU-commission.
I have attended InfoShare 2018 in Gdansk and NOAH18 in Berlin to approach VCs with my offer; surprisingly, the proposal has refused by 3 VC firms, two polish VCs and 1 Berlin-based VC.
At this point of my startup-life, I’ve concluded that breaking the European VC culture is not easy, besides of efforts from the Europe Commission, the investors in the EU prioritise a friend-of-friends culture, and they are not willing to move capital outside of their conditions.
Is that the reason why the EU is struggling with building new unicorns?
The trade deficit
Building a unicorn company is not a tech-related thing, it’s more than you realise because it affects an entire economy. At NOAH18 in Berlin, I had the opportunity of listening to great talks from big founders (e.g. Uber) and influential people (e.g. Al Gore), but the panel caught my attention with the minister of Economic Affairs and Energy and Lake Star (VC firm) about the cost of using technology from the US.
That sounds very scaring to me since Europe is excellent for building technology and infrastructure, that’s ridiculous that we are out of the race.
