Thirty CEOs of European tech start-ups have called on lawmakers to reform rules around employee stock ownership to help them better compete with Silicon Valley peers in hiring.
Calling the current rules around employee ownership “often archaic and highly ineffective" start-up executives argue that Europe could be the world’s most entrepreneurial continent. However, they say the limited availability of talent to nurture and fuel its blossoming start-up ecosystem is a serious bottleneck to growth.
"The next Google, Amazon or Netflixcould well come from Europe, but for that to happen, reforming the rules of employee ownership is definitely not optional" the entrepreneurs wrote.
According to Index Ventures, a U.S.-based venture capital firm which is behind the letter, tech employees in the US own twice as much equity in the start-ups they work for than counterparts in Europe.
The investment firm's research shows there is an imbalance country-by-country, with the U.K., France and Ireland as most favourable when it comes to employee stock options and Germany and Spain scoring lower on this front.
Rules in some countries are “so punishing that they put our start-ups at a major disadvantage to their peers in Silicon Valley and elsewhere, with whom we’re competing for the best designers, developers, product managers and more” the letter says.
“If we fail to take action we could see a brain drain of Europe’s best and brightest, leading to fewer jobs created and slower growth. That’s why we need to create start-up-friendly employee share ownership schemes to help Europe’s tech sector– its greatest engine of growth, innovation and employment – to succeed and thrive in the global labour market.”
The signatories include:
Johannes Reck (GetYourGuide), Alice Zagury (The Family), Christian Reber (Pitch), Johannes Schildt (KRY / LIVI), Peter Mühlmann (Trustpilot), Ilkka Paanenen (Supercell), Taavet Hinrikus (TransferWise), Lucas Carne (Privalia), Jean-Charles Samuelian (Alan), Alex Saint (Secret Escapes), Dr. Tamaz Georgadze (Raisin), Patrick Collison (Stripe), Nikolay Storonsky (Revolut), Samir Desai (Funding Circle), Markus Villig (Taxify), Jean-Baptise Rudelle (Criteo), Nicolas Brusson (BlaBlaCar), Jacob de Geer (iZettle), David Okuniev (Typeform), José Neves (Farfetch), Felix Van de Maele (Collibra), Joris Van Der Gucht (Silverfin), Daniel Dines (UiPath), Rohan Silva (Second Home), Niklas Östberg (Delivery Hero), Dominik Richter (Hello Fresh), Dr. Raoul Scherwitzl (NaturalCycles), Alex Depledge (RESI), Juan de Antonio (Cabify).
The letter, published online encourages more business leaders to add their name to it before it is sent on to Europe’s policymakers on the 7th January, 2019.