I think what's even more important is that the costs for founding and maintaining such an LLC should scale with revenue, including scaling to 0.

In many EU countries, you still have to pay social security and/or health insurance, even if your company brings in no revenue. This isn't supposed to be a problem, as you're not really supposed to officially start a business unless you cross specific revenue thresholds. However, that doesn't work in practice if you're offering your services online, as many payment gateways in Europe will not deal with non-business accounts.

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Xylakant 3 hours ago | parent | next [-]

Social security gets paid on wages. Revenue doesn’t play into it.

	▲	buzer 2 hours ago \| parent [-]
		Not quite true. In Finland YEL (yrittäjän eläkevakuutus, pension insurance for entrepreneurs) is required and it's based on estimated value of the entrepreneur's work input. Even if you pay yourself 0 euros your YEL income is likely higher. The models that insurance companies use take revenue in account.

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dv_dt 4 hours ago | parent | prev | next [-]

If they were being pragmatic about it, the more universal healthcare systems offered by many EU nations should be a massive advantage for startups vs nations like the US, but the wrong regulations around company operations negates it or worse.

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trueismywork 5 hours ago | parent | prev [-]

Startups but definition have no revenue.

Its also a chicken and egg problem. Having a revenue means having a company and vice versa. Unless you're in very old fields, which explains lack of new tech companies in Germany

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sib 15 minutes ago | parent | next [-]

>> Startups but definition have no revenue

"Having no revenue" is definitely not the definition of a startup. There are plenty of startups with revenue (and even profit!)

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friendzis 5 hours ago | parent | prev [-]

> Its also a chicken and egg problem. Having a revenue means having a company and vice versa.

How would you pay your employees making the product/service that will eventually bring in the revenue? That's what "own capital" is for.

Typical LLC/JSC will have at the very least one employee -- the CEO -- and that will bring one minimum wage worth of expenses (sort of). There are legal entity types that can function without employees with shareholders sort of self-employing, but those are not universal across the EU.

	▲	jandrewrogers 2 hours ago \| parent [-]
		In the US, it is common for a small startup company to have no employees. Your role and title with a company is separate from your official employment status. This is where concepts like "sweat equity" come from. You can be an owner and work on a company without being an employee or receiving any compensation. Creating a company in the US comes with no real obligations to do something with it. This is beneficial. It allows small companies to bootstrap without incurring the complexity and cost of having employees until they have enough revenue or capital to justify that expense.