

An Estonian Startup With €25 Million Turnover - jkaljundi
http://www.arcticstartup.com/2013/09/26/the-estonian-startup-with-e25-million-turnover-you-havent-heard-of

======
jcrei
Ah yes, the #not_quite_estonian_mafia or as some commenter put it on the site
#foreignermafia (as opposed to the #estonianmafia label that goes around every
time an Estonian start up is mentioned). In all honesty I'm very happy to see
foreigners achieve good results with their start ups in Tallinn. I would love
nothing more than to see Tallinn become this international hub for start ups.

~~~
jkaljundi
We love foreigner-started startups as part of #estonianmafia. That's the joy
of the broad term, it can include both Estonians abroad, foreigners in Estonia
as well as anyone with any relation to Estonia. You're definitely part of it
as well :)

------
antr
Although I'm a believer in bootstrapped startups, I just hope that if AdCash
raises capital they make it from European funds, and not foreign ones. Europe
needs to considerably develop is own venture funds and funding resources, and
that won't happen if capital comes from abroad.

~~~
dcc1
What Europe needs is less bureaucracy and taxes, Here in Ireland i have to
handover 23% (likely to be more in upcoming budget) in VAT on all EU sales!

Not only thats almost a quarter of your price gone in sales tax but, there is
a quite abit of added work in remaining tax compliant

Of course if you are Google etc of this island you can just launder your money
onto Bahamas or somewhere else warmer and barely pay any taxes

~~~
pcrh
Well... Google and Apple pay their taxes in Ireland, rather then where the
money is made.

~~~
jarkko
Except they don't.

“And under Irish tax law, the second Irish resident subsidiary is not taxed on
the royalty payment because it is controlled by managers elsewhere.”

[http://www.theregister.co.uk/2012/11/22/how_vendors_avoid_ta...](http://www.theregister.co.uk/2012/11/22/how_vendors_avoid_tax/)

Google (as a verb, no pun intended) for “Double Irish” and “Dutch Sandwich” if
you want the full picture of the scheme.

~~~
pcrh
Despite these tax-avoidance shenanigans, I think they do pay tax in Ireland,
just a ridiculously small amount.

[http://www.theguardian.com/business/ireland-business-blog-
wi...](http://www.theguardian.com/business/ireland-business-blog-with-lisa-
ocarroll/2011/mar/24/google-ireland-tax-reasons-bermuda)

~~~
dcc1
Oh they do pay some taxes, but rather insignificant amount when compared to
the billions they launder thru' here.

And not just Google I believe Apple laundered north of 50 billion and only
have a handful of employees here
[http://www.nytimes.com/2012/04/29/business/apples-tax-
strate...](http://www.nytimes.com/2012/04/29/business/apples-tax-strategy-
aims-at-low-tax-states-and-nations.html)

As a small business owner it sickens me with how these large companies can get
away with so much here, ok granted they are creating jobs (badly needed) and
have other positive effects on a sinking economy but having Revenue put a
blind eye on these shenanigans while making life miserable for small companies
is unfair.

~~~
lhc-
Having "only a handful of employees" is hardly creating jobs. And Apple is a
notorious example of a company that doesn't actually reinvest most of the
money they avoid paying in taxes, they just sit on enormous cash reserves
(reinvestment is often used as an excuse for tax breaks and tax holidays here
in the US).

~~~
handelaar
Apple's one of the largest employers in Cork, and Google's headcount in
Ireland is measured in the thousands.

------
jacquesm
There are quite a few companies like this (and much better ones) that power
infrastructure for whole industries. I'm always very much impressed by these
submarine operations.

Try this one: [http://www.iponweb.com/](http://www.iponweb.com/)

imho it is much more impressive than AdCash.

------
jhonovich
The €25 Million turnover number is misleading. Later, the article notes,
"AdCash gives about 70% - 90% of revenue to their publishers, so with a
turnover of €25 million, you can do the math on their theoretical
profitability."

Let's say they keep 20% (the middle of that range). That's €5 Million. Of
course, that's not profitability. That's essentially their revenue before the
expense of having 40 employees, etc.

Still impressive but more realistic with that aspect clarified.

~~~
blibble
don't confuse revenue/turnover with gross margin.

gross margin is turnover minus cost of goods sold.

~~~
jhonovich
Sure, so this is a company with a paltry 20% gross margins.

~~~
blibble
I guess PayPal, eBay, VISA, and all the banks should just shut up shop then...

The number alone means nothing without understanding the business that they're
in.

