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Comment by nikanj | Hacker News Reader

EU is pouring huge amounts of money into development grants, because they want to decrease their dependency on the global markets.

Expect GAaaS startups (grant applications as a service) to pop up left and right, offering extremely slick pitch decks, founders in well-fitting suits and ridiculous pie-in-the-sky business ideas.

It’s some version of ”build it and they will come”. Granting millions in free money to anyone who promises to create an EU alternative to AWS / Intel / Facebook gets you a lot of said promises.

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It was never entirely clear to me how I actually get this money except by making friends and rubbing backs with the people in Brussels.

It certainly doesn’t seem to be based on likelyhood of success.

Seems like you already answered yourself. Crony capitalism and nepotism are the traditional EU way of doing business. That’s why our companies tend to lose on the global market, when faced with a level playing field and real competition

Pretty much yes, that's why all EU funded tech projects are half-assed. As soon as the EU public money dries up, all investors pull out as well because they know nothing they do is meant to be competitive on the free market, they're just there to suck on the teat of easy EU money and take off when it's dry.

The sad part is, without EU money, nothing in tech would happen in the EU. We have no VC investors willing to put their money in something as risky as tech when they can put their money in much safer places with surer returns like real estate which sacred in the EU compared to let's say the US.

The EU start-up I was working for was looking for VC investors and we found some German guy who was like "yeah I can invest 100k in your company" at which point our boss was like "bruh, that will barely cover scientist, dev wages and infra for 3-5 months". Then came and American guy with an initial investment of 2 million. Nuff said.

How would an investor pull out prior to an exit? Since they can't why would they invest in something they don't expect to be competitive. How could they suck on the EU teat? This makes no sense.

As you point out, the real issue appears to be a lack of VC risk appetite for investing in early-stage startups in the EU vs the US.

You misunderstood. As soon as the EU pulls out, so do the private investors. They're only along for the ride as long as the EU puts in most of the money and the risk.

We must know different investors. What ride would they be on except to bankruptcy if they can't profit from their investment?

> Over the next two years, it plans to raise €3bn — that averages out as €125m a month for everyone keeping score at home

The EU pledged €2bn so it's mostly government funding. Imagine burning €125m in public money every month.

The 2bn from the EU is not earmarked for Evroc, I understood that it was a general allocation (though perhaps they expect to get a lot of it).

The EC wants to invest 2b€ in the sector in general, not in the company specifically

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