
San Franciso Is Over: Europe Home to Next Big Hit - contingencies
https://www.businessinsider.com/vs-says-san-francisco-is-over-europe-home-to-next-big-hit-2019-5
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buzzwr
Please stop posting businessinsider links on hackernews. We need to pay for
it. This is not a community to make some money.

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wesammikhail
Yea no... This PR article is flat out misleading (and I´m being generous
here).

1) The article ignores the power of networks which is the main reason SF is
the titan that it is. Niall Ferguson and Peter Thiel have written extensively
about the topic and SF in particular if you´d like to read a thing or two
about it.

2) I recently had a successful exit in the US and have been interviewing
dozens of startups a months to invest in here in Stockholm (where I live). And
it´s safe to say that the quality of available early-stage startups is sub-par
at best in comparison to what SV or the US in general has to offer. Granted
this is my subjective opinion but I dare say it isn´t far off the truth
considering that I have started and worked on companies in both places.

3) "The environment has led to a re-evaluation of the city's prominence for
buzzy tech start-ups. House prices in San Francisco are four times the
national average. And the average house price is now $1.3 million"

The dishonesty of not mentioning that Stockholm´s housing cost is rising much
faster (relative to income) than SF´s housing market is rather astounding.
[https://www.hemnet.se/salda/bostader?location_ids%5B%5D=1803...](https://www.hemnet.se/salda/bostader?location_ids%5B%5D=18031)

4) "Europe is where the value-add is possible between funding rounds, you can
get sometimes three times the value for European companies over US for the
same money," says Söjgren."

Saying "sometimes" (which represent the edge cases) to provide a sense of
general well-being is just toxic. Evaluations and capital are about as dry
here as the freaking desert. That creates an environment where competition
between VC firms is none-existent which in turn makes it incredibly difficult
for early stage startups to even make it off the ground due to down pressure
on round sizing and equity demands. This is the case especially when you keep
in mind the level of employment tax expenditures that exist here compared to
the US. Besides, how in hell do you get 3x the value for the same money? By
that logic we should all start companies in Estonia or Lativa or India or
anyone of 200 places on earth where we get 20x the value for the money. So
Sweden in this context is the worst option on the table because there are no
networks, the round sizes are small, the costs are huge and the local talent
pool as abysmal.

5) "Investors are now joining the dots with smart money flowing into an
increasingly competitive European scene."

If that was the case the Swedish krona would have higher demand which would
push the price of SEK higher against USD or EUR. In reality however, money has
been escaping Sweden and SEK in general. See the 5 year charts:

[https://www.tradingview.com/symbols/SEKEUR/?exchange=FX_IDC](https://www.tradingview.com/symbols/SEKEUR/?exchange=FX_IDC)

[https://www.tradingview.com/symbols/SEKUSD/?exchange=FX_IDC](https://www.tradingview.com/symbols/SEKUSD/?exchange=FX_IDC)

Sigh...

