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Ask HN: What is the best city to start a start-up in Europe?
49 points by roschdal 2268 days ago | hide | past | web | 95 comments | favorite
What is the best city to start a start-up in Europe?

I am surprised no-one has mentioned, Cambridge.

* 7% of all of European VC is invested in Cambridge (http://noweurope.com/2010/01/13/case-study-what-can-we-learn...), which is not bad for a City of 125,000 people.

* Close enough (50 mins by train) from London's ecosystem of VCs

* Close to Stansted airport for easy access to the rest of Europe

* Large density of tech companies, and tech competent employees. Similarly the professional advisors (lawyers/accountants) etc understand startups.

* Costs are (generally speaking) considerably less than London. Most costs (rent, salaries, professional fees) are 20-33% cheaper than London.

* Pleasant attractive historic town.

* One of the world's best universities, along with a significant research presence from the likes of Microsoft ensures there's lots of smart people about.

* For a long time Cambridge companies have been interesting startups but not made successful large businesses but the likes of ARM, Autonomy, CSR etc have all grown up to be billion dollar businesses.

Cambridge is a great place to hire smart people, but it's not the only fruit in the UK as far as starting up is concerned. Oxford, Reading, Bristol, Manchester and Leeds are all good places to start up each with their benefits and drawbacks. Oxford (1 hr), Reading (20 mins) and Cambridge (50 mins) are probably best for proximity to London. Bristol has a couple of good universities and it's own ecosystem. Manchester and Leeds are cheaper and can be good if you work with financial institutions.

Having said that Cambridge has a long history of innovation and tech startups.

EDIT: Forgot to mention Cheltenham. Chelly's an interesting place, if you're looking at dealing with certain areas of UK government it's a good place to start up, but getting to/from London/anywhere else can be difficult.

Agreed on almost everything (as a Cambridge guy with entrepreneurial tendencies).

It's worth knowing that the average house price in Cambridge itself is now higher than the average in London, though, and that the local authorities are almost religiously anti-car, which makes the city centre area much less attractive (in a business sense). If I were planning a start-up with funding for significant numbers of staff, I would probably aim to be based on one of the business parks on the outskirts, or in one of the smaller towns/villages close by. That way, you're still within easy reach of the people, industry and support services, but day-to-day running costs and accessibility for local employees who don't want to walk/cycle in every day and for professional visitors driving to your premises are better.

Wow, you'd love Houston Texas!

It seems a bit daft to be choosing a location based on the convenience of the hypothetical middle managers and mailroom employees you'll have in a successful future. Sure it's professional, but it isn't startup. Burn your business plan, remember?

> It seems a bit daft to be choosing a location based on the convenience of the hypothetical middle managers and mailroom employees you'll have in a successful future.

It's not just the middle managers and mailroom staff, though. Most people in Cambridge don't live near the city centre, because it's an old city and much of the space is taken by either the university or business premises. There are, however, many residential areas on the outskirts, and a whole string of surrounding villages.

Plenty of tech companies have set up in the middle of Cambridge, but with the transport policies of the local authorities, car access and parking is absurdly difficult. That makes it awkward to host visitors if you need to, and it is a genuine recruitment issue in that not everyone is willing to walk, cycle, or rely on our less than stellar local bus service for routine commutes to work from the surrounding area. Setting up on one of the business parks -- which are still within cycling distance of the city centre for keen cyclists based there, but also easy to access by car and usually by bus as well -- seems to have all of the advantages of being in Cambridge, without the unnecessary travel limitations.

You forgot to mention the great hand-made fudge.

The only real down-side is the focus on hard science patentable IP - which makes it a bit more difficult to get noticed if you're not in that space.

Cambridge is terrible for web - great for hardware/biotech stuff though.

Similarly with VCs, they're all big funds that invest in hardware - no seed fund activity here.

Rent costs in Cambridge are (IMHO) the same as London.

I don't think there are that many tech people in Cambridge, tons of students, but don't expect google analytics discussions down the pub in Cambridge.

If I were doing web or software I'd recommend London over Cambridge.

Also gets on soapbox Cambridge is far more interested in where it has been as opposed to where it is going.

> Cambridge is terrible for web

A couple of people have said that now. What problem(s) do you see with running a web or other software start-up in Cambridge? A lot of people seem to be doing so.

> I don't think there are that many tech people in Cambridge, tons of students, but don't expect google analytics discussions down the pub in Cambridge.

Are we both talking about Cambridge, UK? IME, it's filled with tech people...

>> Cambridge is terrible for web

> A couple of people have said that now. What problem(s) do you see with running a web or other software start-up in Cambridge? A lot of people seem to be doing so.

There really isn't an entrepreneurial ecosystem in Cambridge for software. There is plenty of stuff for freelance or whatever. I know of two startups that have relocated from Cambridge to London because they couldn't get the technical talent in Cambridge (Rails in these examples)

>> I don't think there are that many tech people in Cambridge, tons of students, but don't expect google analytics discussions down the pub in Cambridge.

> Are we both talking about Cambridge, UK? IME, it's filled with tech people...

I mean tech hackers, rather than academic people

Cambridge is a great place for hardware and biotech. It's alright for enterprise software. It's downright poor for web.

(We moved Timetric from Cambridge to London towards the end of last year.)

For anyone interested in Tallinn and Tartu in Estonia, we at http://startupleadersclub.com/ are glad to help and give advice. The community is pretty strong.

There are 2 larger world-class companies (Skype and Playtech) that have 3-400 people in tech & development here in Tallinn/Tartu, which can sometimes be a problem for startups competing with hiring. At the same time, many people are also leaving those big companies for startups.

Still I believe locating sales, marketing and any customer facing operations in consumer space in SF Bay Area or NYC/Boulder etc. Having product development and anything tech related in Central and Eastern Europe makes a lot of sense on other hand.

Paris. The business culture here is so toxic and aristocratic that you could probably recruit any developer by promising to not terrorize him. (An internationally competitive salary is not required: small steps.)

Cost of living is very hight, taxes are very hight, there's not a lot of VCs (compared to SF, NY, london or berlin), bureaucracy is a hell in france from opening a bank account to pay bills or taxes, it's difficult to get a work visa ...

Are you basing this on facts ? Cost of living is indeed high (much lower than London though), but taxes are not so much higher than in many other countries in West Europe. You will need a French account manager from time to time so that you benefit from various tax cuts, especially in the first few years.

I am curious about the banking issue as well. Never heard of it being that difficult. Working visa are indeed becoming increasingly difficult, but I am afraid this is a trend that is not restricted to France.

I think the issues in Paris are much closer to the toxic environment mentioned by the OP. I know several people who founded their own company just to avoid the usual IT job which consists in being a semi-slave for one of the numerous consulting companies.

Taxes are very hight to afford for a startup, I don't have numbers right there but look at what cost an employee in France ... and taking advantages of government support for young companies requires a skill in french bureaucracy that not all entrepreneurs have + it's often harder to get it when you're not a french entrepreneur. Banking was just an example about bureaucracy in general. You'll spend way more time in France to setup simple things, need way more papers, seriously it's a pain ! I can't compare with lot of countries but by experience it's far more easier in Berlin or in SF.

And about the issue about being a semi-slave : I worked for many startups in Paris and I never felt that. Of course if you take the consulting way you can't really compare with startups. And yes an internationally competitive salary is required and it costs an arm for the employer.

As someone who runs an incubator in Paris but lives in Silicon Valley, let me add my 2cents:

look at what cost an employee in France

An engineer in France is way cheaper than an engineer in Silicon Valley. Taxes on salary are indeed higher, but the base salary is so much lower that in the end, France is cheaper. To give you an idea, a basic salary in Silicon Valley is $100K, the equivalent in France would be below 50K€. Those cost the employer about $120K and 75K€ respectively, so you can see which is cheaper.

On top of that, France has a pretty good tax incentive for R&D engineers. You can almost get all your money back as the employer, it's frankly crazy (it's called CIR). But nice for startups.

The main issue in France is the complexity of navigating all the government aid. It's a patchwork of measures that don't fit well with one another...

The complexity of the bureaucracy is indeed a bummer from what I could see when I worked in small companies. One company I worked for lost a lot of money just by not getting in time some forms for some tax/"charges" reduction.

Concerning the cost of an employee: one thing to keep in mind is that once you paid your employee, he already got his basic retirement and health plan in place, contrary to the US and pretty much everywhere else outside western europe. As an example, I earn more here in Japan than in Paris, the cost of living in Japan is certainly cheaper than in Paris, and taxes are low but in the end once I factor out the cost of health insurance, retirement, and maybe soon sparing money for children's education, France is really not so bad.

I actually know several friends who came back to France after earning "so much money" in the US, especially once they had kids.

Looks like too much FUD for me. "Look at what cost an employee in France" - what's next, "you cannot fire anyone ever" ?

Bring some facts in here, leave the conclusions to us please. As for getting the "government support for young companies", isn't negotiating with Sand Road VCs a skill of its own as well ? What about scoring DOD contracts ? Both require immersion in a culture with specific goals, myths and traps.

> hight

It's high, not hight (I'm French too).


Yeah, this is exactly why it will never happen in Paris. (I live there too)

I'd be very interested in knowing more about your experience in Paris. As a French who has grown up in Paris but wants to start a startup, I'd like to know if I should leave and try the adventure somewhere else.

There's quite a few things brewing in the Copenhagen/Malmö-region. Flattr is located there, Bambuser, Polar Rose and Neo4j are there and there's even a startup accelerator going on for the first time just now in Copenhagen: http://startupbootcamp.dk/ and another similar in a nearby university college http://www.startupcamp.se/

But as you see from the other replies there's not one particular region that is so far ahead of the rest that it can be called the startup centre of Europe. Berlin, Barcelona, London, Stockholm... the startups of Europe are spread all over the place.

It's quite expensive to start a company in Denmark. You need ~10k eur for a limited liability company (ApS) and to be stock-based you need ~70k eur (A/S).

The startup scene is growing, there's a lot of pressure from the government to create new companies. See: http://venturecup.dk/ http://www.vf.dk/?sc_lang=en

Italy has the same problem with limited liability companies. I created a modest initiative to attempt to get things fixed: http://www.srlfacile.org/

I'd be more than happy to link to sister initiatives in other countries!

I just landed in CPH a couple on month ago, and I see a lot of potential in the Scandinavians countries as a niche market.

The main problem is that salary and taxes are very high.

On the other hand, the salaries are high enough that you can work for 2 days per week and support yourself while bootstrapping.

Well, that depends. Salary expenses are high but so are the taxes which means you as an employee don't get to keep very much.

Remember, Sweden and Denmark hold the #1 and #2 position for highest taxes in the world.

Having said that, I actually plan to be employed 4 days/week and try a startup on the 5th. We'll see...

Hi Erik :)

What happens to the 2 free days most people call a weekend?

Göteborg is a great city, there are several VCs, good engineers due their universities and an Entrepreneurship culture

Berlin as explained by many here: http://news.ycombinator.com/item?id=1565375

I'd definitely say London, purely for that fact that it has many of the same things that make Silicon Valley so appealing: a (relatively) thriving tech community, especially around the Old St area, it's close to VCs, there's lots of networking events, conferences, etc. Only downside is cost of living, which has frankly been overemphasized here. NY is just as expensive, and theres a pretty sweet scene there...

London for sure.

There was a very similar thread not too long ago: http://news.ycombinator.com/item?id=1565375

My question is different, because I'm asking about Europe specifically.

Than pick the european cities from that thread :) .

Glad no one mentioned Italy, don't even think about it. Just founding a limited liability company costs 6000euros+ (2500 of those are to be put in as starting capital MANDATORY and the rest is pure cost)

That's not a lot of money. Neither relatively nor absolutely. For contrast, starting a GmbH in Germany (llc equivalent) requires a 25000 euro investment plus all the fees and legal cost. Starting a B.V. in the Netherlands requiresna 18000 euro investment, again not including overhead and registration. The US is the exception, with its liberal LLC and bankrupty laws. In europe there just are a few additional hurdles.

I agree that italy should be avoided, but for other reasons (mentality, corruption, etc)

Separate corporate structure from where you base yourself. For example to start a limited company in Ireland with accountant fee's etc is about €300. Capital Requirement is €1. And that company can base itself anywhere in Europe. One of the advantages of the Single Market.

I've heard varying things about this from people in Italy. I'm not sure it's entirely ok to live and work in country A for a company that is located elsewhere, but I'm neither a lawyer nor an accountant.

It very much ok to have a company registered in one country and work for it in another . This is the whole idea of the Treaty of Rome, which is the treaty that forms the EU. Some famous examples are like Air Berlin which is a UK PLC. Where things can get a bit complex is the tax situation. You need to pay tax where the business is, which can be different from where it is registered.

As riffraff says, corruption isn't a problem for internet companies, really. Especially seeing as how most of them are in the north, which, while still not being a model of squeaky clean, is much better than the south.

The problems in Italy for an internet company are 1) bureaucracy 2) the fact that many potential employees are going to value stability over the good things about startups 3) fairly high cost of living in many places (Milan is expensive and an armpit - hot and humid and smoggy in the summer, cold and clammy in the winter).

That said, there are an awful lot of bright and creative people here. I hope that we'll see that potential unlocked sooner, rather than later.

BTW, here's a more in-depth article about Italy's problems, although some of them are not so applicable to internet startups:


For this reason the german UG (Unternehmergesellschaft - Society of Entrepreneurs) was created. The investment can be chosen freely by the founders, the fees are very low (about 300 Euros) and the only drawback is that you have to put one quarter of the profits back into the capitalization.

Starting a B.V. in the Netherlands requires you to have 18000 euro in your bank account at the moment of inception for a few days, but the actual cost are much lower. I managed to do it for less than 1000 euros and within a week (although usually it takes about a month).

Could you elaborate on the procedure? This would make an excellent future reference.

The 18K liquidity requirement for Dutch BVs is about to be dropped, if indeed it hasn't already.

It's a trivial obstacle anyway. You only need the money in an account on the day of incorporation.There are a number of companies that will lend it to you - for a fee, of course. :-)

18K is in the range of what YC companies receive. It's not a 'trivial amount' - it's a bunch of extra hassle that one has to think about, especially if we're talking about a couple of kids just out of college with an idea and not a lot of money.

And, at least in Italy, the 'social capital' thing means that the money has to go into the company somehow - you can't just borrow it and then give it back to the bank the next day.

What about ireland and england LTDs? They're pretty cheap.

And 6k euros for "2 guys and an idea in a garage" can be a lot of money.

Agree for mentality, people might want stability.

Corruption no, here in the north there's almost none - that I heard of, at least. And if you aren't selling to the government how is that a problem anyway? You only need an internet connection

in what way does corruption obstructs a startup working on the internet to the world? It is an issue if, say, you try to market you new cool X thing to local administrators and state owned companies, but that does not seem the case for the OP.

London or Berlin are where all the action is in consumer and B2B web startups. They're where the money and markets are. If you're doing something connected with the media or financial industries, then I think there's a very good case that London's the best city in the world to start it; Silicon Valley doesn't have the depth in banks, advertising, publishing, music, TV, film or fashion. The only competition for those startups'd be New York. Net-a-Porter would never work in Silicon Valley.

The Baltic states, especially Tallinn, have benefitted from Skype; the Scandinavian countries are full of developer talent. They're also full of English speakers, and if you're looking to go global, that doesn't hurt.

If you're doing hardware or biotech, the answer's Cambridge, though.

Great thread! I have worked (and continue to work) for a handful of startup-type companies in Liverpool (NW England). I don't have a wide enough experience of European cities to say it's the best place to start a business, but it's a great place to live and relatively cheap to rent office space and similar. Historically there's been a good amount of public sector funding available (although whether that will continue under the coalition government remains to be seen!), but of course there isn't an "VC ecosystem" equivalent to that of London.

All that said, there are amazing, interesting and fun people here doing cool things with tech, and there's the beginnings of a great scene. I love it :-)

But my main reason for posting was to ask: is there a directory of some sort compiling answers to questions like this for cities globally, detailing the sort of recruitment and funding opportunities available, as well as what sort of startups are already based there? Almost like a "Crunchbase for cities"...might have to think about knocking such a thing together if it doesn't already exist!

1) london for the ecosystem 2) berlin for the quality/cost of living and a pretty booming ecosystem

Interesting question. I think once you get outside of the Bay Area, it really doesn't matter anymore where you are.

SF has the whole echo chamber thing going for it, which can be a huge advantage, and it has tons of little startups to interact with. Nowhere else has either of those, so there's no particular reason to pick one place over another.

In Europe, I've set up shop in Pamplona, Chamonix, Kalymnos, and now in a little town up in the Lake District of England. Each has pretty much exactly the same startup culture, consisting entirely of me and whatever other developers I've brought out with me.

Yes, I am in Southern Spain and the concept of being an entrepreneur and starting a company seems to be completely foreign (pun intended!). There is a department in Andalusia that is supposed to help startups but they seem to focus on startups with very high capital behind them already - they point blank refused to help my company do anything (even finding an accountant!).

(No offense) All the answers make no sense. How can you advise a country with so few information about the start-up?

Dimensions to assess that would totally change the selected country:

- A start-up in which business domain?

- What will you sell?

- Who are your targeted customer? Where are they located?

- Where are you main competitors?

- Where is the best "ecosystem" in your domain that could help you/partnership with?

- Do you need some VCs?

- Tax optimization requirements?

- What is your "exit strategy"?

Hint: be located close to your competitors, partners and of course... customers.

What's Edinburgh like? I was under the impression that a few companies had started up there from the university.

Have a look at http://techmeetup.co.uk/

I went to the Techcrunch event in May and there seemed a few interesting wee companies and at least one sensible VC around.

Edinburgh is a gorgeous city with a great atmosphere and fairly convenient for the Highlands if you like outdoor sports (the skiing in Scotland last year was particularly awesome).

The main downside to Edinburgh is that travel can be a bit painful - although it is a lot better than it used to be.


Define start up. Are you going to be profitable from day one? London, that's where the big money is. Do you need VC money? London, that's where the big money is.

Are you self financing and have limited run way? Go to cheaper places.

I second this, if you think you can get to money within the first year get yourself to London. If you are within the UK and can't get to money within the first year, live within 1 hour commuting distance and plan to move there. This has worked pretty well for me. It is extremely expensive to be able to live here but the ability to casually attend and walk to serendipity tech networking events is a real luxury and I save a lot of money commuting. The lively eco system around the Techhub interested people is exciting and I recommend it.

I third this. I've avoided London for many years (traffic, overpopulation, cost) but now that I'm here I realise I should have done it earlier. It's almost like another country - everything is going on here.

There are a bunch of recommendations in a previous thread on HN "What is the best startup city outside the US" here: http://news.ycombinator.com/item?id=1565375

Anyway, I like Amsterdam: People speak English and the state provides a lot of stuff for free if you're not making money yet (child care, health insurance, even access to museums). Once you start making money get out of there or pay the worst taxes in the world ;-)

SF/Silicon Valley. Seriously, if you have the freedom of choosing among cities, a hop across the pond is not a big deal. Might as well stack the chips in your favour.

Immigration issues are probably simpler for Europeans moving throughout Europe. Putting "Hi, I want to move to the US and do nothing visible, and oh, I have no money" on your US visa application is probably not going to put it in the "instant approval" stack, but that's what a startup is.

Apart from UK cities I would also check out Dublin. Barcelona does have a startup scene as well but spanish laws and regulations are generally insane.

Dublin is insanely expensive, and not to put too fine a point on it, but every Irish investor will hold his breath until you get the much-required Enterprise Ireland seal of potential approval. As a place to live, Dublin is actually more expensive than either London or New York. In both London & NY you have the option to go down market. Cheaper digs, more suppliers, more options. Dublin is a small city with few options on many levels.

Also, having worked in a (very) well funded Dublin based start-up, I would add that the infrastructure isn't great.

Infrastructure? What infrastructure?


Seconded. As a native Dubliner, I am always impressed with how cheap other european cities are when I visit there.

As some of you have already said it, some cities have a better ecosystem, others have a low cost of living but no ecosystem and crazy bureaucracy, others have low taxes.

The solution is an offshore: you start your company in a low-taxes European country (Cyprus, Bulgaria) or a tax haven, you live close to an ecosystem (near London, for instance) and you hire developers from Eastern Europe (low wages, highly skilled).

There are places for everything:

Åland Islands (Fi) - no VAT

Jersey (UK) - no VAT on goods sold, as long as items cost less than £18 and are posted individually, no import taxes to mainland UK

Estonia - no corporate profit tax (flat 21% tax on dividends)

Some people claim Lisbon to be the upcoming Silicon Valley of Europe: http://seedcapital.pt/2009/11/18/lisbon-by-the-sea/

That's where I live and work, can't say it's easy to get money but I'm pretty sure I don't know the right people yet. :)

Been there once. A nice town. My first impression was: ok, how could i make a living here? I know some people who kept their clients from back home and moved there, so they make the same money but pay less for costs of living than in central europe, while enjoying the nice climate. Very clever I guess, but what keeps me from going the same route is, that you dont get far there without speaking portuguese though.

I'd personally opt for either Prague or Frankfurt on one hand or Geneva or London, if you could sustain it financially, on the other hand.

Prague? That's insane, its close to being the worst place to be a startup: http://www.praguepost.com/business/3757-venture-capital-hard...

I also have a hard time believing Geneva, have you actually been there? In Switzerland I would understand Zurich or Lausanne, but Geneva does not even have a technical university, compare that with ETH and EPFL.

I would think Zurich would be pretty good for the following reasons:

* ETH (availability of talent from a good computer science research university)

* Good transportation alternatives (you can get a direct flight to/from Zurich from/to most major airports, direct high speed trains are also available to France and Germany)

* Business friendly tax rates (relative to other European countries)

* Switzerland, in general, has high quality of life

Side note, Google has a sizable office in Zurich and is able to attract and keep talent from both Western and Eastern Europe.

Frankfurt/Main? Why?

Besides the banking sector the city is dead. No user group activities, no "cool shops" or startups. Highly expensive like Munich and Hamburg without having real benefits besides the great airport.

I should have been more clearer though. It's a TV hub also, which lines up with my interests. :) Muenchen is more of a film hub, and to an extent Hamburg also.

There a some people recommending Bratislava: next to Vienna, great place to live and still cheap.

Would be interested in hearing more about it. Anyone?

Bratislava is probably not as cheap as you might think - yes, Slovakia in general is very cheap and that might be true for most parts of the country, but Bratislava is more westernized. Don't get me wrong though, it is still cheaper than the average city in Western Europe.

I am not sure if there is much of a startup culture here, though...

/second. Was going to ask about this too. Interesting blurb on it in another Ask HN:


"Bratislava- Near vienna, but relatively low cost. Seems to be growing in leaps and bounds and has a well educated populace. Environment of low regulation and capitalism, so this could be the startup hub of the next decade. Might not be that now."

London, Berlin, Barcelona, Hamburg


Cost of living is very high in London.

Compared to Eastern Europe and Southern Europe, yes. But if you compare London against Germany or any of the northern siblings (Scandinavia region for instance), London is very cheap. If cost of living is your highest priority, then cities in Czechoslovakia, Hungary, Italy and Spain (in that order) will be your favourite. But then that's just not what a startup needs, doesn't it? In case of software, London has the best ecosystem. London is also not bad for lifestyle, etc ...

In my experience, London is more expensive than just about anywhere in the world. If you need cheap, my recommendation is Berlin, housing and office costs are very low, and if you are coming from anywhere else in Europe almost everyone speaks English which is quite handy

Try living in Tokyo and Scandinavian cities :) I am currently living in Finland and just finished a small tour of the Scandinavian region. The costs here compared to London are not comparable. Other then rent, everything else is way out expensive compared to London. But if you are ready to travel a bit daily you can offset that rent cost. But then you cannot beat the rest of environment. For e.g. number of fellow hackers / programmers, etc ...

Rent is the main factor that makes London expensive, so if there is someway to get free housing, your other costs won't be too bad.

Czechoslovakia? I believe life cost and style, from what I've seen, is quite different between the czech republic and slovakia

True. I also know a few who have relocated from Budapest (Hungary) to Prague (Czech R) after completing university. More jobs, better wage, better living standards.

Slovakia has improved a lot lately. Some thing which I didn't expect before visiting Slovakia, was the lack of English skills among youth. They seemed to speak better German than English.

London cheap compared to Germany?! Compared to Scandinavia perhaps, Germany no.

Berlin is way cheaper than London.

Göteborg was way much cheaper than London both rent and food. Plus it is a small city, great internet and lot of people wanting to do new things

You are right, how can I forget Lidl :P.

Any thoughts on carrying the message to Newcastle &/or thedifferenceengine.eu

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