5 things startups want out of the European elections

European startups have traditionally had limited interest in EU politics and policymaking. The pressures of fundraising, building a product and gaining customers, often with limited budgets and small teams, means that advocating for more favourable regulations in the EU bureaucratic jungle has usually been at the bottom of founders’ to-do lists. 

But the last couple of years have shown that EU policies can have a real impact on startups — whether they like it or not. Laws such as the AI Act, Data Act, Digital Services Act (DSA) and Digital Markets Act (DMA) have left founders with additional obligations, but also opportunities. 

So now, as European citizens head to the polls on June 6-9, many European startups and their trade associations have decided it’s time to lodge their requests for the incoming members of the European Parliament and European Commission. 

“The European election is a great opportunity to think ahead of where we are and where we want to go in the next five years,” says Josy Soussan, head of global public affairs and government relations at Klarna, which has written its pre-election manifesto. 

So, what are startups and their lobbyists asking for? 

1/ One contact point 

There’s no single office that represents high-growth tech companies’ interests. As far as EU jargon is concerned, “startups” fit into the same bucket as “small and medium enterprises”. As a result, policies that affect startups are often drafted by several different departments of the European Commission. That means that founders don’t have a single person to advocate for them or reach out to with concerns.  

Having a commissioner or department focused on startups’ particular needs — as exists in France — would be a big help.

“There is really one thing that is working in France — it’s la French Tech and the digital minister. It’s honestly a very unique one-stop-shop for any issue a startup or a scaleup has in France. This does not exist at the European level,” says Hugo Weber, vice president of corporate affairs at Mirakl, a French SaaS unicorn. 

Weber’s request is: “A single point of contact: a vice-president of the European Commission or a commissioner of the European Commission, who would be responsible for helping the European startups navigate the EU bubble, and solve the issues that they have, which can range from social rights, to immigration, to M&As.”

Allied for Startups, a Brussels-based lobby group for European startups, has also asked for a commissioner for digital entrepreneurship in its pre-election manifesto. “Having a startup commissioner would be ideal,” says Maxime Ricard, the group’s policy manager — although also rather unlikely. “A bit more doable” would be to have a commissioner covering all kinds of digital companies, he adds. 

The group is also working to create a startup intergroup in the European Parliament — where parliamentarians from different committees and political groups could meet to exclusively discuss startup issues. “We would provide the decision-makers with unique access to an invaluable source of information and would equip them with the tools to create innovation friendly-legislation and the right policy ecosystem with tangible benefits,” he says. 

2/ Implementation over regulation

In the last few years, European startups have had to get to grips with numerous new tech policies, many of which have been a real headache to comply with.

So now, startups are calling for policymakers to give them a break — and some time to implement all the new rules. 

“If we had to identify one real priority for the next mandate, I think it would be really simple: that EU policymakers focus on the implementation of the existing legislative texts rather than discussing new regulations and trying to create new ones,” says Ricard. “It’d mean that finally we would have a regulatory environment that would be focusing more on innovating rather than regulating.”

3/ European Delaware Inc.

The need for a stronger European single market is a recurring request from startups. While there are no trade nor people movement barriers within the block, the 27 governments still set up their taxation, business and employment rules individually. Adapting to these various laws can be a real headache for startups that want to scale quickly — and for VCs that want to invest in European companies. 

To get around this, Allied for Startups is calling for the introduction of an EU company status — something that would allow startups to scale their products and services once, rather than 27 times, under a single set of rules.

EU/acc, a community movement of founders and investors, is also calling for the creation of a” standardised legal entity for Europe”.

“Countries with the population of a Chinese office building, or the GDP of an averagely successful computer game, have completely different processes, terms, expectations, constraints and legal dances an investor has to learn,” EU/acc says on its website. 

“To expect that any European investor will learn this for 27 countries is absurd. To expect this from American investors is delusional.”

4/ Easier access to funding and talent

If the European Delaware Inc. idea sounds like a long shot, startups are also calling for more practical changes to make fundraising and hiring easier. 

Allied for Startups’ manifesto calls for a pan-European startup visa, “a startup and scaleup test” that all new legislation would have to pass and pan-European investment instruments. 

Klarna, meanwhile, is calling for greater harmonisation of stock option plans across Europe. “We need to reform the tax system, it needs to be unified,” says Soussan. “Granting equity to employees should be made much easier. If you look at how it’s organised across the union, it’s very complicated. So for a company that’s cross border or that has operations in different markets, it’s very hard to be able to offer the same benefits to its employees.”

5/ Less populism, more unity

Startups are also hoping that conservative, right-wing parties which put nationalism over European unity won’t take over the European institutions. According to recent polls, far-right parties across Europe are on the rise and could become an important voice in the European Parliament. 

“These elections are very important because it’s going to be about reactionary narratives, far-right narratives, against European integration, migration, green policies,” says Miguel Ferrer, vice president of Adigital, a Spanish association for the digital economy. The group has published a declaration in which numerous European startup associations, as well as the founders of startups such as Glovo, SumUp and Cabify, call for a Europe which is more united, open and ready for global leadership based on its values. 

“All ideas that support a single market are the good ones; ideas that look at fragmenting, and everything that is in line with nationalism and protectionism at national level will definitely hurt European startups,” says Weber. “The more European we are, the better it is for startups.”

Read the orginal article: https://sifted.eu/articles/startups-europe-elections-eu-policy/