The European Inc: Challenges and Solutions for European Excellence

​Allied for Startups and Startup Hungary are hosting an event with founding members of eu/acc to launch the “The European Inc.” petition - an initiative that aims to establish the 28 regime, or a new pan-European legal framework for European startups. 

​The legal entity, if it becomes a reality, would unify the European startup investment landscape and hence allow the European startup ecosystem to compete united globally. At the launch event policymakers, founders, investors, and startup organisations will discuss this petition as well as other bottlenecks and opportunities in the European startup scene.

​Agenda

​14:00 - 14:10 Opening remarks
14:10 - 14:30: Launch of Andreas Klinger’s petition on the European Inc.
14:30 - 15:15: Panel discussion - The European Inc. petition through the lens of CEE
15:15 - 15:50: Open discussion
15:50 - 16:00: Closing remarks
16:00 - 17:00: Network Reception

​The Need for a European Inc.

​Europe is falling behind, struggling to create, fund, and scale startups at the same pace as its global competitors. Unlike common misbeliefs such as Europeans are risk-averse, not hard-working enough, and lacking ambition, a growing community of startup founders and investors, believes the root cause of Europe's lag is national fragmentation and hence friction. Friction in starting a business, accessing early funding, and scaling across the EU’s diverse markets.

​The European Inc. initiative aims to address these barriers. Co-founded by Andreas Klinger, a startup founder, operator, and early-stage investor, whose viral blog post “Dear Europe, please wake up!” became a rallying cry for change and resulted in the creation of the eu/acc movement. With experience leading startups in both Europe and the U.S., Klinger is urging EU policymakers to acknowledge the market frictions that stifle innovation and to pursue straightforward, actionable solutions. The European Inc. petition, supported by Klinger, Index Ventures, and multiple other prominent founders and investors is at the forefront of this effort.

​If implemented, the European Inc. would standardise pan-European investments, creating a system similar to the streamlined investment processes seen in the U.S. Beyond simplifying investments, it would also address complex issues like employee stock options and cross-border employment, fostering a more integrated and efficient startup environment across Europe. In short, it would enable Europe to compete as a unified force on the global startup stage.

​Spotlight: The Central and Eastern European startup ecosystem. 

​The problem of fragmentation is especially felt in smaller emerging hubs. A great example here is the CEE region. While frequently praised as talent-rich, the local fragmentation into dozens of legal systems discourages international investors from investing early in these markets. Leading to a lack of funding options and momentum for local founders. The most telling example here is the amount of startups relocating. In Hungary, for example, 29% of startups have moved their legal HQ abroad and another 26% are planning to in the near future.  For Hungarian startups expanding internationally, that figure is almost 100%. 

​In almost all cases they move their company to the US – specifically using the Delaware Inc. The Delaware Inc. acts here as an international standard that investors are familiar with and have legal confidence in. Meanwhile, we do not have an alternative to this in Europe expecting investors to be comfortable with several dozens of legal entities, and then we act surprised if early startup investments lack momentum in Europe.

​Taking place during the Hungarian Presidency, we aim to spotlight The European Inc. petition as an example of pragmatic solutions around real-world problems that Startups in Europe face. The event kickstarts continuous communication among AFS members from the startup ecosystems in both the current and upcoming EU Presidencies: Hungary, Poland, Denmark, and Cyprus. This ongoing dialogue ensures that startup-related issues remain a priority on the EU agenda, fostering collaboration and support across these nations.