[johntdaly]

As somebody working in software startups in Europe, what I’ve seen is a pretty broken system. The companies have a wild west attitude towards sales that leads to irregular contracts unpredictable money flow.

I’ve worked on trying to predict our income based on our contracts and because of a couple of sales people a lot of the contracts where basically inscrutable, we brought two different experts in to “fix” my “failing” just for them to give up and do what I did and predict future income based on billing rather that contracts. That made us less interesting to the more risk shy European investors. It didn’t help that we abused a system that was designed to run an IT shop with because that is what the company started at years earlier.

The other thing is that until you make about 25 million revenue a year nobody is interested in you. To risky, not enough early investment and companies are money strapped. At that point a lot of the companies that come in don’t come in to invest but to buy up the company and those companies are usually American. If you do get investors and those investors are Europeans they are often Vulture investors that prop the company up, make it more presentable and just sell it on to the next investor. In one lucky case the IT startup was bought up by a European company that wasn’t in IT and saw the investment as a way to future proof itself.

The investment for startups and in particular IT startups in Europe is very broken and the companies that benefit from it are often American. It is getting better but I think the US can still snap up European companies for its own growth for the next 10 to 20 years.