Europe’s soft socialist entrepreneur

Socialst Entrepreneurship

The Socialist Entrepreneur

It’s no big surprise that on the European side of the Atlantic you can find many government backed programmes and initiatives that offer start-ups and entrepreneurs various forms of financial assistance.

Call up your local chamber of commerce, ask for entrepreneurial assistance, wait about fifteen minutes on hold and then you’ll receive the info you need to search for, apply and learn more about the different help initiatives coming from your European capital of choice. Do some research, pitch them an idea the way they want to hear it, put a new spin on it, and lo and behold you’ve got €20.000 to run wild with and start your enterprise

On paper, it all sounds grand, and I don’t believe anyone would sneeze at a free 20 thousand, but unlike a market such as say the States, where pretty much the only government aid you’ll get is well… none. You have non for profit initiatives such as SCORE and a handful of others, but you’ll be hard pressed to find anyone giving out free cash.

EU hand holding  vs’ U.S. hard love

While 20k is undeniably nice it does cause a problem withing the European entrepreneurship community that we’re calling the softening of the socialist entrepreneur. Meaning, the European entrepreneur that “knows” he / she will receive state aid is not as hard pressed and driven to succeed as his/her American counterpart, the pressure is simply not there to achieve as much with as little as there is in the Sates.

This lack of pressure on the part of the entrepreneur establishes a more lackadaisical approach towards work output that trickles down to the employees of the start up, and creates inefficiency – this need for milestones and successes before money runs out – is simply not there, the living on the edge, or the one foot in the grave the other on a banana peel mentality does not exist to the same degree as it does in the U.S.

Meaning, that the American entrepreneur is more driven to succeed, because he/she knows that once the money runs out, that’s game. In the EU, these disbursements can take place over time, a pre-market concept can go on hold until c grant is received, or assistance is given from a local governing body. There’s a general lack of that type of “pressure” that is so needed to go the extra mile.

Striking a Balance or Changing Mindsets?

This socialist entrepreneurship is a result of the European mindset. In the U.S., business angel and venture capital activity is much more prolific than it ever was in Europe, and especially so now in 2010. As such, finding capital financing, and even bank financing for a new idea and concept has always been easier in the U.S. than in European markets, be it for cultural reasons – or whatever. As such, governments have stepped in to try and fill that gap that is otherwise lacking in the EU. However, lacking a profit motive, the government initiative inherently fails as it’s purpose is to support enterprise, create jobs, etc… and not to turn a buck.

What needs to happen is a balance, where instead of offering grants, those government backed initiatives in the EU, need to function as totally autonomous investment bodies without any political influence – investing in companies that they see the same high growth potential in as an experienced BA, or VC, but taking on a higher risk than your typical early stage European investor, because those mindsets that have led to Europe trailing the U.S. in terms of investment activity will not change for at least another 40-60 years.

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