Challenges: Forming a team: In Finnish society, small talk is near absent. Without small talk, you can’t expand your circle of acquaintances. Without an expanded circle of acquaintances, you cannot make a good selection on early team members. Add to this the Finnish/European tendency to bond within a small, closed group. So, outsiders will remain outsiders, and building early team for a non-EU founder is a nightmare of sorts. So, single non-EU founder setup, until some significant advance made, should be considered pretty legit, and the thinking box needs to be widened Pre-seed investors: They come in all shapes and sizes. But one common thread among most EU-based preseed investors is high emphasis on early team based out of EU. So, foreign founder must bring in his 3-4 core team members from his country/acquaintances to be considered by these investors. But why would 3-4 people take a chance with their financial destiny by moving abroad when nothing is certain, and where costs of living are much higher. Pragmatically speaking, one person should move and if things look up for startup revenue-wise, others could consider quitting their day jobs and moving abroad. Given that most EU-based pre-seed investors completely miss out on this scenario; I have a feeling that they are neither as mature as they project themselves to be, nor are they truly international though they want to fund internationally scalable startups. They should spend some money and time living 3 months minimum in non-EU (not silicon valley) countries to sharpen their own minds and funding theses. Else, a lot of what they utter is just sophisticated crap. Finnish government should check their track record of investments and returns - if they are no good (less than ten percent returns on average) and if they can be disqualified from this professional practice, it should be done. They spoil the startup ecosystem with their ignorance and idiocy. Taxation on early stage startup salaries: For founder & early teammates (> 7 yrs of professional experience), full commitment to a startup (> 10-12 months) is a career and financial risk. If startup fails, job market will treat them like losers (some exceptions, but mostly thats the case). When job market treats you as loser, you get a job, when you do, at pay lesser than what you deserve. While when you’re working on early startup, you get less salary because high salary can’t be paid. Basically, at least 1-3 years of lower personal earnings. The downside risk is pretty obvious, and 75-90% probable on average. If upside via capital gains can be taxed and there are laws to that; the downside must be tax-discounted; if the country wants professional entrepreneurs, not just fresh out of college graduates jumping on the next shiny thing that makes quick headlines (aided by VC funding). My view is that at least 18 months of tax discount (at least 20% from the normal calculation) must be applied on founder and early team member salaries for first 3 years when they are being paid a salary. To summarize: single founder is Ok until there are some sizeable revenues, early stage salaries should be tax-discounted to lower the financial risk involved and encourage professional talent to take the plunge, EU preseed investors should be coached to think outside the box!
