E584 | EUVC Summit 2025 | Andreas Klinger, Prototype Capital: The Path to EU Inc: A Unified Future for European Startups

0:00Europe boasts immense talent and ambition. Yet startups often face fragmented regulations across nations. Andreas Klinger, founder of Prototype Capital and former CTO of Product Hunt, is championing the EU Inc. initiative. Because it's very easy to say everybody in Brazil is an idiot and doesn't know what startups need. Yes, but it doesn't really work. A movement to establish a standardized pan-European corporate structure, the EU Inc. initiative has quickly gathered momentum, Gaining widespread support from over 13 ,000 tech leaders, venture capitalists, and policymakers. Join us as Andreas Klinger outlines the vision for EU Inc.

0:43Cool. So I'm not going to pitch you on my fund. I run a small micro fund. It's very successful, but that's not why I want to be here to talk to you. I actually want to talk to you about a project we have started last year. and I generally think when we have achieved it will be the biggest step function improvement for startups in our lifetime. And that's the EO Inc. And before I do this, I want to explain to you why we have started working on this and why we're so passionate about this. Since COVID, the world is an economic crisis. We're kind of like ignoring it in some parts, like some areas like the States, for example, are like, yeah, we are the best, everybody else sucks.

1:21Europe is self-regulating. every area is reacting a little bit different to this. But Europe's position is very unique here because we don't have high productivity jobs. We lack the tech innovation, and we'll get to this in a second. And I'm actually cheating here because the next few slides are actually from Dealroom. Highly recommend their presentation on this. The main reason, the main issue we have is that all of the high productivity jobs of the last, let's say, 10, 20 years were actually in the States. We are more like very frequently customers. Previously high productivity jobs, for example, like trade, banking, machinery, we had those here.

2:01AI, software, all this kind of stuff we don't. And the second problem we have, the Internet acts as like a global distribution network where power law can perfectly work. So if you are the number one, number two, you might lock the whole market among just you two companies. There's like the biggest seven companies in the States And you can actually my opinion remove Tesla here. It's like the biggest six already really interesting They alone do more R &D and CapEx and all of the words we see combined So not having these kind of companies means you have a different level of research a different level of R &D in your area You can argue that okay R &D is very different to VC It's a different effort, different everything, right?

2:46They also invest more into startups than European VC alone. So these six, seven companies invest more into startups, investing, not acquisitions, investing, than Europe as a whole. Or differently put, unless we build comparably large or important companies here in Europe, nothing we say or do in this room matters. This is basically having a second complete VC ecosystem just in the form of a few companies And it's not only those few companies they have And we can't argue that, yes, but Europe is shaped differently We like to have smaller companies, Mittelstande called in Germany We had these kind of like big spending, big progress, big companies in every other industry We lack them in tech, in AI, in software and this is why in my opinion to be fully sovereign Europe needs tech innovation to work and one thing we do and I have regularly with politicians is startups are frequently framed as like small creative ambitious companies no VC invests in a startup even the hope that they stay small the whole point of startups is to build huge companies and the second problem here is that modern innovation like AI research for example this is happening at these big companies in a completely different scale.

4:03So to actually not become a pure SaaS customer of the US, and I know today's theme is not pitting US versus Europe, I'm pitting actually Europe versus everybody else. We need to have these kind of large companies here. We have to have working tech innovation here in Europe. Our largest competitors are United Blocks. China, India, the US. We act as individual countries. You can't even compare Europe to the States because in reality, one second, I'll jump to this one, in reality it's almost every country on its own. There's less than 18 % pan-European investing in the first 5 million of us got up.

4:42Or differently put, unless you have local angels, very likely you're not going to be able to efficiently raise. the only solution to a like a world where like big blocks are united and like acting on their own interest is continental scale let me jump here so this is why we started eo inc for the people here the easiest explanation i have is deliver inc but for europe so like a standard that actually is known across of europe where it's easy for everybody here like i have seen this kind of company, my lawyer has worked with them, I know what to do, I have seen the documents, all of them are standard, it's like standards all the way, I just can quickly go.

5:24In the States, if I talk to a founder in the States, I can easily convince them to leave their job, start a company and send me a YCSAFE. I don't even have to send the YCSAFE to my lawyer because it's a standard document I've seen hundreds of times. In Germany, for example, everything starts with a ritual where we get one of the elders of our community to sing to us our own shareholder agreement for like an hour, and then we have to pray that the bank actually accepts us. Like, it's very, very different here. And this is something we need to fix. This is, in my opinion, the largest step function improvement we can do as an ecosystem for the founders of our generation.

6:02A few people agree, more than 16 ,000 actually. So from Patrick Collison, the founders of Weiss, the founders of Bolt, the founders of Volt, Every meaningful fund in Europe has scientists every meaningful founder in Europe has scientists every association and We did a step like a little bit more we didn't just say like hey this would be great Please Brussels figure this out the nuance is important like it's important that the solution is actually useful for startups So what we did is we created an 80 page legal proposal in detail how this could look like we open source it We've worked with the largest legal firms in Europe focused on startups, and we got contributions of hundreds of people.

6:39EU Inc. isn't like a meme, a vibe, or a general idea. It's a very specific solution. And the specific solution is you standardize corporate law on the European level. You have an online registry where you can basically stripe Atlas. It's the easiest explanation of this one. But the company stays a local company in the sense you still have German taxes, German employment law, French taxes, French employment law. The reason is otherwise they would never give up this authority to Brussels. There's no country in Europe that would give up employment or taxation to Brussels. So this is a compromise we do for a simple reason.

7:13We want to make sure that the EU Inc. actually is available to any kind of startup because we do not know how the startups of the future look like. If this goes through, we can easily do standardized illegal stocks, standardized European stock options. So make it actually possible to very efficiently provide options across Europe, across your team. And they will be taxed only at exit. So I want to drive this home. This isn't an entity for startups. It's an entity for any kind of company. I know people who became millionaires by investing in coffee shop companies. I know people who started bus companies that became billion-dollar businesses.

7:50You never know what's the next big success, and you especially don't know what the innovation of the future looks like. This is why we have this whole taxation and employment compromise. Otherwise, what would happen is that they would make it only for a niche, and then Brussels would define what a startup is allowed to be. Yeah, there's a few other inside baseball facts, but basically we're trying to create a whole ecosystem around it. So if you're used for the States, like I used to work five, six years in the States, for example, you can very easily create a Mercury account for your delivering, like automatically online banking, all this kind of stuff.

8:23Like there's multiple services around the whole ecosystem of standards, and this is basically what we're trying to do here. Cool. How can you help? Anybody who has minister or president of a country in their job title, and I'm not kidding, I'm not kidding, would be very, very useful. We are at the point where Brussels is actually a very, very big fan of this. We're at the point where multiple countries are very, very interested in this. Now it's about making sure that it's the correct implementation and not some shady compromise. And for this we need to talk to these people. These people, like the problem you have with any of this is it's not like one department in the government that's responsible of this.

9:05This goes across multiple ministries by default. So what you need to do is you need to basically put it on CEO level. So we need to put it on CEO level in every country and on Brussels level. So if you know prime ministers or presidents, please afterwards talk to me. By the way, our goal is to have the first EU Inc. by 2028. Brussels already said they want to try until 2027. We were so successful with this whole campaign that in Brussels, not only they made this the number one thing they want to actually do for startups, and the first thing they want to do for startups, we were so successful that our name, like EO Inc., became the meme for any solution in that space.

9:43Which is very confusing, by the way, when you feel like in these meetings. Why not 2025? For context, the question is why not 2025? for context DSE needed 30 years 30 if I get it done by 2028 that's a 10x for Brussels speed or for a government speed it doesn't even Brussels this is like hyper speed this is light speed the fact that they actually want to have like a legal proposal this year they want to have voting this year implementation next year like this is comparably fast like for startups I know I have the same I tell my team like why is this like why is it taking so long And everybody who worked in policy in my team is like getting a freak out in this very moment and tell me like you have no idea.

10:26Please like this is insanely fast already. Cool. The second one I want to leave here is you can just do things. The people who did EO Inc. are a group of founders, investors, association peoples who got together in a WhatsApp group. We need a pan-European solution for IPOs. If one of my founders would do an IPO in Europe, I would sue them right now. and without exits we don't have a vc ecosystem so we need a solution so like somebody get together and figure this out please thank you very much um i started a youtube channel as well i have a vc fund uh feel free to connect before you go i just want to give a massive shout out to the partners who made the evc summit and awards possible so please do not tune out we're partnered with these firms because they're great people with offerings that we know from our friends in the ecosystem are truly world-class.

11:19First up, I want to give a big thanks to HSBC Innovation Banking. They helped us incept the awards in the very beginning, and truly, they are the leading bank for anyone in European venture. There's a reason why everyone knows them. Google Cloud, they were our venue, hosted the summit. What a team, what a big effort they put on to help us. We're hugely grateful. Make sure to reach out to Arabella or Oksana at the Google Cloud team to hear how they can help you as well as your portfolio. Massive credits goes to them. Ace Alternatives, we have so many friends in the Berlin ecosystem partnered with these guys.

11:54Just the best fund ops team around. And as with any good restaurant, where the locals are is also where you get the best service. And now they're expanding across Europe, so they're definitely someone to talk to. Hainspoon, they're longtime partners of ours in both our own legal work. They're great supporters of us here at EUEC, and I definitely think that they are one of the go-to legal teams to have in your corner. CW Communications, our dear friends who helped us secure CNBC, Bloomberg, Financial Times, and many more for this summer. It's a joy working with Dan and Kathy and the team. Fundcraft, Digital Native, Full Suite, Lux Headquarter, and a great partner as you grow your firm out of Luxembourg.

12:35Definitely a fund admin to consider in your stack. I can only say that the team are incredible to work with. I'm very thankful that I've gotten to know them. I think they're one of the up and coming fund admins that you want to be thinking about. Portfolio IQ by Synaptic. You may know them for the Discover tool, which is branded on a Synaptic, but Portfolio IQ is absolutely a product you should know because there's no one that understands intelligence better than this team. And finally, Goodwin. They are a truly world-class legal partner you can trust. They're hands-on, business-oriented, an expert in everything and anything transatlantic.

13:11So those were our partners for the summit and awards. I know this might have been a bit long and boring, but really, if you have these guys on your side, I don't think your firm could be in any better hands. And also, they're helping us do what we're doing every day for you.