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EU Scale and the Structural Reform of European Seed Funding · Deep Tech Germany – AI, Robotics & Frontier Innovation by Startuprad.io™

0:00
If you're a European founder scaling deep tech and stuck in
0:04
the web of fragmented investment rules, here's your
0:08
challenge: cross-border early-stage investments in Europe is
0:11
painfully slow. Legal fees are high and standardized
0:15
instruments are missing. Tomas
0:18
Matsurik, co-founder and co-CEO of FundingBox and
0:22
managing partner of FundingBox Deep Tech Fund, built and
0:25
exited tech companies, now invests across Europe and
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leads the EU-funded DeepSafe project to create,
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to create what is called EU Scale, a pan-European
0:38
convertible loan instrument. Today we'll uncover
0:42
how to navigate European startup funding, fix the cross-border
0:46
investment gridlock, and unlock deep tech capital flows
0:50
that could reshape the continent's innovation scene.
0:59
Welcome to startuprad.io.
1:02
Your podcast and YouTube blog covering the German
1:06
startup scene with news, interviews, and
1:10
live events. Our
1:13
guest today, Tomasz Mazuryk, brings a rare
1:16
trifecta. He's a founder who built and sold
1:20
NetSprint.pl, an investor deploying capital
1:23
through Fundingbox Deep Tech Fund, and a builder designing the
1:27
next layer of Europe's startup infrastructure.
1:31
With a PhD in computer graphics from Wien,
1:34
an MSc from IT— in IT from Warsaw
1:38
Institute of Technology, Thomas has developed over
1:42
1,500 startups' access, acceleration, and funding
1:45
through FundingBox. Now, as technical coordinator
1:49
of the DeepSafe project, he's steering the creation of EU-scale
1:53
Europe's first standardized pan-European investment
1:57
instrument for early-stage funding. So if
2:00
you're a founder, investor, or policymaker
2:03
wondering how do I raise or invest across Europe without
2:07
drowning in legal fees and red tape, you come to the right
2:11
place. Tomas, or Tomek, welcome to the
2:14
show. Um, for everybody
2:18
familiar with investment instruments, Would
2:21
you say the EU Scale is like the
2:25
European answer of Y Combinator SAFE?
2:29
Hello everybody. Hi Joe, thanks for having me here.
2:34
Um, well, that's our mission. That's the mission we have onboarded on, uh,
2:38
to create the pan-European instrument facilitating
2:42
faster and more seamless
2:45
investments at the early stage. The
2:49
issue that is pretty important right now
2:53
in Europe, because the deals in Europe are happening on average
2:57
3 to 5 times slower than in the US,
3:01
and I would assume that at the early stage the gap is even
3:04
bigger, especially at the early stage where the deals should be
3:08
happening really, really fast. I was just
3:12
recently talking to one of the board
3:15
members of the European Business Angel Association, and he
3:19
told me about two valleys of death, one very early stage and
3:23
one pretty late. And I think you, you're, you're more
3:26
or less also talking about the experience many founders have of the
3:30
first valley of death, but there'll be a different
3:33
interview. Um, you've built companies,
3:37
you've invested across Europe. Take us back to your founder roots.
3:42
What drove you to start netsprint.pl, and
3:45
how did that experience shape your later mission to rebuild
3:49
Europe's startup funding infrastructure? Well, we are
3:53
digging into the really, really past stories.
3:57
Uh, we founded Netsprint in the, uh, so-called pre-Google
4:01
era. So Google was the local player
4:05
back then in on the US market, of course with the global ambitions.
4:10
Um, but we came on the mission, uh,
4:15
within my current back then company with my business
4:19
partner. We've been running the software house. So we
4:22
created something that we know it's called
4:26
nowadays incubation program. Back then we
4:29
simply have announced, come to us with ideas
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and we are going, if we like the idea, we are going to fund it.
4:37
And support it. So back then
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I took the multiple roles, uh,
4:45
of an angel investor, uh,
4:49
but in fact it was also the venture building
4:52
role. And we have incubated and
4:56
venture built the startup called NetSprint. Again,
5:00
back then we didn't know it's called startup. It was supposed to be
5:04
the company.
5:08
And we were on the mission of building the first
5:12
search engine of the Polish internet. Back then, Google
5:15
didn't cover Poland in an efficient way. The AltaVistas
5:19
and other search engines were really, really poor.
5:23
So we very quickly got the market traction.
5:28
We created the company Just
5:32
weeks before the dot-com bubble
5:36
crisis. So after setting up the company, uh,
5:40
we had a couple of conversations with investors, uh,
5:45
from outside of Poland. They were very excited,
5:49
but then the dot-com bubble crisis came and
5:52
all the dreams about getting any money has gone
5:56
bust. So
6:00
we went all the stages from the founding of
6:04
the company with the really angel tickets coming from
6:08
my pocket and of my partner's, business partner pocket.
6:12
And then we have been developing the company without any
6:16
external funding because on the local market, uh,
6:23
there were no investors, no VCs back then.
6:27
All the foreign investors after the crisis, dot-com uh,
6:30
dot-com bubble crisis, have stepped back.
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So for the 6 years we've been running the company and growing this
6:38
as in the bootstrap mode. So when I look, uh,
6:43
back and try to compare this to the
6:47
nowadays, I must say that today founders are in the very
6:51
luxury situation. They've got
6:55
money available on different stages of the company
6:59
development. They've got co-works. They've got
7:02
venture studios. They are just asked
7:06
to come up with their ideas and develop them.
7:10
So, you know, after 6 years of— 6
7:13
difficult years, we have been able to make
7:17
an exit to the global player from the media
7:22
space. And then after
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the exit, I got a little bit
7:29
step back, time to reflect what to do in life. I did
7:33
a bit of the consulting, but after
7:37
some time I decided, well, it's time to do something
7:41
next. So on the other side of the barricade, which
7:44
is the FundingBox platform and FundingBox company,
7:48
that I'm developing right now is the platform to support startups.
7:53
So we decided to, to, to support startups, uh,
7:57
through the acceleration programs. And after some
8:01
years seeing the great deal flow of startups coming from all over
8:05
Europe, uh, I also founded the
8:09
venture capital fund that is investing in the
8:13
best startups, from the local
8:16
ecosystem. You're getting a little bit
8:20
ahead of me here, Tomas. Um,
8:23
let us walk through all the questions, and I'm sure we'll touch on
8:27
everything of that. Um, let's talk a little bit about the current
8:31
status quo. Everyday founders in Europe face different
8:34
legal and tax reality in each country.
8:38
How would you describe the current state of European startup funding,
8:42
especially for deep tech and cross-border deals?
8:47
Well, the European startup scene is
8:50
growing, but it cannot
8:54
boom because the investment landscape, uh,
8:58
is still broken. You've mentioned in the introduction
9:02
about the two valleys of death, and here we are
9:06
covering the first one at the seed stage. Let
9:10
me come with an analogy.
9:14
Probably all the listeners of this podcast still
9:17
remember different chargers
9:21
for every phone they've been getting. I remember my
9:25
every Nokia phone was coming with a different charger.
9:28
And now if you've got a couple of phones
9:32
in your family and then every phone has
9:36
a different charger, it was a mess. You could not reuse your
9:40
charger. Then the USB standard came, now the
9:44
USB-C, and now
9:47
you've got— you can have the same charger, same cable for your
9:51
laptop, for your phone,
9:55
for your electric toothbrush, for the Oura
9:58
Ring, and all the other
10:02
devices. And I must say, it's a huge, huge relief.
10:07
So now,
10:11
how how to, to put this analogy into the startup ecosystem?
10:15
Well, in Europe, startups are trapped within
10:19
27 different legal and tax systems. Uh,
10:25
practically, uh, of course it's possible
10:28
to make the cross-border investments, but it's making them
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slow, expensive, involving too much
10:37
legal activities. So
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it's making them expensive, and especially at the very
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early stage, the seed stage,
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those costs are relatively too high
10:53
compared to the size of the ticket startups are getting.
10:57
So that basically means in every of the
11:00
27 EU member states you have to deal with different
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laws regarding, uh, taxation as well as investment
11:08
funding. So that means it makes cross-border
11:12
transaction pretty expensive and inefficient,
11:16
right? Exactly. And that's why we are on the mission
11:19
on bringing the US SAFE type of
11:23
instrument to Europe that is universal, that
11:27
could be applied almost on the spot to
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make the investment without too
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many work around it. I was wondering,
11:38
at some point you you realizing— realize that
11:41
copying just the US SAFE model just wouldn't work
11:45
here. What was that moment of clarity, and what
11:49
did you discover about why Europe isn't ready
11:53
for US-style SAFE? And a little disclaimer here, I know there are always
11:57
details making this impossible. For example, in Germany, when you
12:00
finally convert the safe, you still have to invest a little bit,
12:04
which is not in the US legal tradition, and so on and so forth. So
12:07
basically, they always needed to be adjusted, at least
12:11
in Germany. Yeah, well, and the
12:15
reality is, um, that there are some
12:18
adjustments needed, uh, in every
12:21
country, or almost every country across Europe. So
12:26
We started our DeepSafe project,
12:30
and after 9 months of
12:34
making an effort to fit the US-style
12:38
safe into the European reality,
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well, literally I can say that we have hit the wall because we have
12:46
found out that this is not possible to make it in a simple way.
12:51
So We have confirmed, making
12:55
the consultations with some selected investors,
12:59
that basically Europe is not
13:02
yet ready for the simple adaptation of US SAFE.
13:07
The legal accounting tax realities and the no clear
13:11
vision how to treat it, whether it's a debt or an equity.
13:17
And on top of this, there are coming
13:20
additional considerations, like for example,
13:24
the so-called difficulty situation of the company.
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If you take the capital into the company,
13:32
which you don't know how to classify, a debt or an
13:36
equity, most of the accountants and tax advisors will say, okay,
13:40
let's take it as a, as a debt. This
13:43
is sitting on your balance sheet. And
13:48
too much debt, uh, after
13:52
some time, like 3 years, is creating the so-called
13:55
difficulty situation of the company, which
14:00
doesn't allow the company to get any public help, any grant, any further
14:04
investments that are backed by the public money.
14:08
So there are many consequences of this status quo.
14:12
So just to recap before we move forward,
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there is a lot of money in Europe, but
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it comes with the limitations of the public money also.
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I mean the grants, but also the funds that are backed
14:27
by public money. Because
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of that, many investors that are backed by
14:35
public money are too risk-averse. So they
14:39
are paying too much attention on the downside protection,
14:43
and they are not paying enough attention to the
14:47
upside potential that is coming with the deal. And basically, you
14:51
know, the American way of investing is, uh, looking
14:55
at the upside of the upside potential of the company.
14:59
So, uh, that's why our ecosystem
15:03
is simply not ready yet, uh,
15:07
for the full deployment and the
15:11
growing in the way that we would be
15:14
expecting to grow. That's, that's my take. So there
15:18
are like two elements. One is the legal
15:21
constraints, but also the readiness of
15:25
the ecosystem. Um,
15:29
we've been talking a lot about different, different
15:34
costs, especially, um,
15:39
when investing cross-border. Can you share a story
15:43
of a promising cross-border deal that
15:47
fell apart because of legal or tax barriers?
15:50
What did it cost the founder, not just in money but also maybe
15:54
in lost momentum?
15:58
Well, I think you've touched a very good point. It's
16:02
not about the money. It's mostly about losing
16:05
the momentum. And
16:09
well, I have seen in my life
16:13
hundreds of the negative examples.
16:16
A couple of them we have witnessed
16:20
in our investment fund.
16:26
Once we have rolled out our fund,
16:29
we have been using the full potential of the FundingBox
16:33
Group to look into the European pipeline of
16:36
projects. In the first 6 months of
16:41
running the fund, we have found 3
16:44
excellent startups from Western Europe.
16:50
But it ended up that due to the limitations, due
16:53
to the costs, the potential costs of the transaction,
16:58
uh, the cross-border transaction, those deals didn't happen.
17:02
So on the business level, we,
17:05
we have been aligned, we have put the term sheets,
17:10
but then in the framework of the implementation
17:15
the deal simply didn't happen. From the
17:21
FundingBox acceleration platform, I can
17:25
give one example of the startup, an Italian startup, Cognivix,
17:30
that after 2 years of going
17:34
back and forth with, with the lawyers, they finally
17:37
set up the office in the US.
17:42
And got the investment. But
17:46
so this is the so-called Delaware flip. But you know,
17:51
it was the time, it was the momentum, and it was really, really
17:54
the complex operation. But well, speaking about the positive
17:58
examples, probably
18:02
you, all the listeners have heard about the recent
18:06
unicorn coming from Poland, 11Labs. Polish
18:10
founders, uh, after 3 years
18:14
of running the company, they have hit the valuation of $6.6
18:18
billion. But here
18:22
is the twist: after analyzing the
18:25
landscape, they decided to set up the company in the US and
18:29
start fundraising into the US company from
18:33
day one. So It is the positive example of
18:37
the company coming from or born in the CE,
18:41
but the negative for the, from the EU ecosystem perspective is that
18:44
they decided to go directly to the US. So those are the
18:49
barriers, those are the limitations that we are working on to
18:54
eliminate them. And that's our mission.
18:58
I was wondering, instead of forcing a
19:01
safe you pivoted towards
19:05
a pan-European convertible loan as the foundation for
19:09
EU scale. Why was this the
19:12
smartest starting point for Europe, and what lessons did
19:16
you learn from the initial missteps?
19:21
Yeah, well, as I said before, US
19:25
SAFE adoption failed, the simple one.
19:30
So we have pivoted and decided
19:33
to concentrate on something that market
19:39
already knows and is familiar. So
19:43
all investors in Europe, all startups in Europe are
19:46
familiar with the convertible loans.
19:51
Uh, still the convertible loans can be very
19:55
complex. So we decided to
19:59
onboard on a mission of creating the EU simple
20:02
convertible loan agreement. We call it EU Scale,
20:08
and we believe that this approach gives the
20:12
chance to gain the traction and trust among
20:15
the startups and investors and is going to, to
20:21
help to facilitate the speed of the deals happening
20:25
across Europe. So it is very
20:28
simple, 2.5 pages. Uh.
20:33
No interest on the loan, no cash repayment,
20:37
no specific guarantees for the investors, just
20:41
the promise of the future
20:45
most favorite nation of the shares
20:49
at the future conversion, which is the standard
20:53
when, when getting shares in future.
20:57
And well, we stayed true to our goals. So we
21:00
wanted the standardized and simple agreement.
21:05
We are using the convertible note as the true starting point.
21:09
And just to remind
21:15
That's how the US SAFE originally was
21:18
born. It was the American adoption of the
21:22
convertible notes that were very popular on the market.
21:27
So in, in the framework
21:30
of our project, we plan to encourage some investors to start
21:34
using our template and
21:38
adopt it. And then hopefully the others are going to
21:42
follow and we believe in the snowball effect on the market.
21:46
So after a few positive examples, after a few examples
21:50
that the deals can happen fast, we believe that it can
21:53
become the new normal.
21:57
So as I said at the very beginning,
22:01
the US deals are happening 3 to 2 times faster than
22:05
European. So we are on the mission with this approach, with this template
22:09
that everybody's on the, on the
22:13
startup and investors seem familiar with to make this
22:16
gap smaller or even liquidate it.
22:21
In the founders world, you'll also tell some inside story about
22:25
stories about that. But let us go into building trust.
22:28
As you said, one adapts and then more people will adapt.
22:32
Um, you've said before European investors are distrustful of
22:36
automation. How did that insight shape your approach,
22:39
especially regarding AI funding platforms
22:43
versus one-on-one, the, the typical human trust
22:47
building? Well, our original plan
22:50
within the DeepSafe project envisioned using
22:55
our proprietary FundingBox-owned matchmaking AI
22:59
platform, OnePass Bridge, to match investors and
23:02
startups automatically.
23:06
Uh, obviously We did not believe that the deals
23:10
are going to happen automatically, uh,
23:14
but the goal was to do the matchmaking
23:18
and allow startups and investors sign the
23:21
deals on the platform, uh,
23:26
using the standardized template. Uh,
23:29
the platform recently won the Alastria Blockchain Award for
23:33
the best Web3 project. So from the product
23:37
perspective, um, it's
23:41
ready to be deployed. But what we have found out,
23:45
that there is no product-market fit, uh,
23:49
because the investors, especially investors, are not ready,
23:53
uh, to use it for the
23:57
purpose of closing the deals.
24:00
So The reality is that the EU investors are
24:04
not ready for the so-called blind hype-based seed
24:07
investments. They are also distrustful of
24:11
the new legal approaches, uh,
24:15
and the so-called black box automation. So now we are pivoting this
24:18
to one-to-one model, uh, meaning
24:23
in the framework of the project, we are test
24:27
driving matchmaking the investors
24:30
also through the platform, but then taking this
24:34
on the one-to-one basis to close the deals using
24:38
the EU scale template. So we want to have
24:42
the real-life proof that the deals, the signing of the
24:45
investment agreement, can happen really, really
24:49
fast. And this is the first step that we are
24:54
right now, uh, testing.
24:59
I see that, that sounds pretty promising. You've been talking
25:02
about DeepSafe before. Can you walk us through the
25:06
structure of the DeepSafe project? Who's involved?
25:10
How decisions are made? And how founders, lawyers,
25:13
and even VCs are contributing to the EU
25:17
scale design? Yep, absolutely.
25:21
So the DeepSafe is the EU-funded initiative. Uh,
25:26
it's consortium of experts doing the work. We are rather
25:30
a small consortium of 7 partners led by FundingBox
25:33
accelerator company based in Poland.
25:38
In the consortium, we've got the Danish accelerator
25:41
called Accelerace, seed fund from
25:45
Latvia Overkill, South Moravian
25:49
Innovation Center,
25:52
BW.CON, Baden-Württemberg Connected
25:56
from Germany, and Techosystem
26:01
in Ukraine. And on top
26:05
of this, we've got a sister company from Spain, FundingBox
26:09
Communities. So that's the consortium. That
26:12
is helping us to get immersed
26:16
into the different ecosystems, different legal ecosystems in different
26:20
countries, to make the adaptations
26:24
as fitting to the legal
26:28
realities of different countries, different ecosystems.
26:33
While the European
26:36
Simple Convertible Agreement for Loan to Equity
26:40
EU Scale is the product. It's a contract template,
26:44
uh, supported by the
26:48
guidelines. And right now we are looking for
26:51
the organizations willing to join us
26:55
and help us build it together.
26:59
We want to listen to the voice of the ecosystem because
27:02
we are building this product for the
27:06
ecosystem. So if you are the lawyer, tax advisor,
27:09
VC representative, angel investor,
27:13
or experienced founder, we are opening a call for
27:16
expressions of interest to recruit for our working
27:20
groups. So you can visit our website eu-scale.eu
27:23
to register, and, uh,
27:27
we are definitely going to
27:31
to involve everybody that is willing to contribute to this
27:34
common goal that we've got in Europe.
27:40
Um, we are focused on Founders here on Startuprade.io,
27:44
so let us dive in a little bit into the Founders Playbook.
27:48
For founders listening today, admittedly we're recording this
27:52
shortly before Christmas, but it will be aired only in February
27:55
because we, we currently do have quite a backlog a
27:58
backlog in content. So for founders listening today,
28:02
say, when racing across Germany, Poland, and
28:06
Czechia, what 3 practical
28:09
steps should they take right now to prepare
28:13
for cross-border round? Well,
28:17
nowadays I think that the best approach is
28:21
get the local lead investor
28:25
and close with him a preliminary deal that he's
28:29
going to lead the round.
28:33
Then search for the international investors who like
28:37
the idea. Well, searching for investor is still the
28:40
job that you have to do as the founder. And then once
28:44
you convince them, ask them to join the round. Why
28:48
the local lead investor? To build the trust
28:53
of the foreign investors that all the legal
28:56
elements and the
29:00
basic due diligence has been done properly under
29:03
the local legislation. So
29:07
that's the approach for now. For the future, once the EUSK
29:11
will become the standard, it should be much easier because then you could
29:14
be raising money independently
29:18
for— from different investors and signing, uh,
29:23
like the American companies are doing, signing SAFEs,
29:28
each of them independently and up to some limit,
29:33
and then with the promise of converting them at the next
29:37
equity round. But we are still not
29:40
there as the ecosystem. And
29:44
I was wondering for our audience if you ever paid a lawyer to
29:48
translate a SAFE or convertible notes between EU
29:52
jurisdictions. Drop a comment where you're based and let
29:56
us know how common this is. We need to talk about
29:59
the policy context here, the so-called 28th regime and EU-INC.
30:04
Yes, the European Union has currently only 27 members, and
30:07
the 28th regime is
30:11
part of growing political momentum in Brussels, um,
30:16
a potentially new pan-European company structure that could—
30:20
would let startups incorporate once and operate
30:24
everywhere. But since this might take years to become real,
30:28
how do you see EU Scale positioning itself as the
30:32
bridge between solution founders and investors
30:35
can use today? How has
30:39
the shifting political climate influenced
30:43
you? Well, the
30:46
response coming from the
30:50
European Union, European Commission,
30:54
towards the initiative of creating the 28th
30:57
regime is very positive. EU-INC initiative
31:01
is working on it. They have even developed the EUFAST.
31:07
This is the advanced
31:11
subscription template that
31:15
is basically the US SAFE adoption in
31:18
Europe. We believe
31:23
it has still
31:26
the flaws, that we
31:30
have faced when trying to adopt American
31:34
SAFE in the current European ecosystem.
31:38
So that's why we believe that the intermediary step,
31:43
like the SCaLE, Simple Convertible Loan Agreement, is
31:47
needed. Commission recently
31:51
announced that the 28th regime is going to be
31:54
the binding regulation. That's good. It's likely to be
31:58
adopted in '27 but taken into force
32:02
late '27 or even '28. Uh,
32:09
just to remind the listeners, GDPR was also the
32:13
regulation, and there were many, many issues with the
32:17
implementation, and there is usually the transition
32:20
period allowing companies to get
32:24
time to prepare. There are different interpretations of
32:27
laws, different understanding what data protection was.
32:31
GDPR was supposed to be universal but became
32:35
very complex, and practically for the it, SMEs, uh,
32:41
it hit the small companies with the disproportionately high costs.
32:46
GDPR concept was born 15 years ago. And
32:51
very recently it got fully implemented. So, uh,
32:55
that's why we believe that on the way of
33:00
implementing the 28th regime,
33:03
there will be some hurdles. Regarding 28th
33:07
regime, there are more questions than
33:11
answers. These questions are tax residency, social
33:14
securities, labor laws. It still might
33:18
not be applicable for all companies,
33:23
especially those that were established under different
33:27
local laws. And that's why we
33:31
believe that we need that bridge solution
33:34
now. The EU scale, we believe, is something
33:38
that is going to be the intermediary step, but we
33:42
need it really now and fast in the European
33:45
ecosystem.
33:49
Guys, right after the break, we'll uncover the strategy
33:53
that changed how FundingBox scales cross-border
33:57
investments and how EU Scale could speed up
34:01
your next round by months.
34:08
Guys, welcome back from the ad break. How, Tomasz, how
34:12
do you balance national differences, say Poland versus
34:15
France, while designing one instrument that
34:19
fits everyone? It has to fit 27
34:23
legal regimes. Where do you draw the line
34:26
between flexibility and standardization?
34:31
Well, convertible loans are widely used across
34:35
Europe with relatively small differences
34:39
between countries, but
34:42
unfortunately, quite often they become bulky and too complex.
34:47
So the primary challenge that we've got is to make it— make
34:51
them simple enough to make them universal
34:57
But on the other hand, we are working on creating a
35:00
playbook set of rules on this,
35:04
how to align existing accounting practices, tax, legal
35:08
implications in different
35:11
legal setups. So
35:15
to address this, we'll develop the white paper that will
35:19
highlight the required adjustments and interpretations
35:23
and educational materials So it's like a playbook for
35:26
this, how to use this EU scale depending on the
35:30
setup. Investor coming from this country investing in the startup in
35:34
the other country.
35:38
Let's look a little bit into the future, Tomas.
35:42
If the EU scale becomes the norm,
35:46
what we currently hope for, what will Europe's early-stage
35:50
funding landscape look like somewhere around
35:52
2028? Will we finally see a true pan-European
35:56
seed, pre-seed market? We hope
36:00
so. That's our goal and that's our mission. You, you
36:03
guys are also working
36:07
with DeepSafe. When is your next intake of
36:10
DeepSafe for startups and investors, and can you
36:14
explain the benefits for both?
36:19
Well, we expect to to launch the next cohort for
36:23
about 20 startups in, in late February
36:26
'26, with the deadline for applications
36:30
being in April. April. In So
36:35
after onboarding those 20 startups, we are going to
36:39
support them with the Venture Readiness Program starting from
36:43
May. We offer them the mentoring
36:48
But also we are going to include the fundraising and
36:51
actionable advices on how to use the EU Scale
36:54
instrument. Moreover, we are going to offer
36:58
also the warm introduction to investors
37:03
that are in our ecosystem. And we
37:06
are looking for the high potential early stage startups
37:10
active in the deep tech domain.,
37:15
established in the EU member states or Ukraine, uh,
37:21
and we are looking for startups that are interested
37:25
in piloting the EU Scale convertible, uh,
37:29
deals. And obviously the expression of
37:32
interest will be launched at the eu-scale.eu, so we are
37:36
inviting all the startups to
37:40
mark this website and look for
37:44
announcement of the open call in February.
37:51
Um, your predictions for 2030—
37:55
what is your boldest prediction for Europe's deep
37:59
tech ecosystem by 2030 in talent,
38:02
capitals, and exits?
38:07
Well, we believe that, um, the
38:12
gap between EU and
38:16
US and China will be minimized. Our goal
38:19
is to reverse the trend, and we
38:23
believe that reversing the trend, meaning that the gap is not
38:27
growing and getting smaller, is going to be a success.
38:31
I would also be interested in your contrarian take.
38:35
Many say Europe can't compete with the US. Um,
38:39
I actually just read the, uh, State of
38:43
European Tech from Atomikor. They say something different.
38:47
Um, but, um, you've argued that Europe's
38:50
fragmentation might be actually its secret
38:54
weapon. How so? Well,
38:59
nowadays we definitely
39:02
cannot compete in the volume and speed of investments.
39:07
Not today and probably not in the
39:11
short future. But, and here
39:15
are a couple of buts, we
39:19
believe that the united defragmentation under the EU umbrella
39:23
The fragmentation of the market, um,
39:28
is giving a huge opportunity because
39:32
Europe has the largest public grant
39:35
ecosystem in the world. That is including
39:39
grants on the different levels, including the
39:42
cascade funding grants where we as FundingBox, for example,
39:46
are one of the European leaders of distributing the cascade funding
39:50
grants. Just to remind the audience, we have distributed and supported,
39:54
uh, more than 1,500
39:57
startups in the last couple of years.
40:01
On top of this, well, Europe has the, uh, complex but
40:04
more stable and predictable political and regulatory environment.
40:09
Still lower costs of accessing talent, for example, from CEE
40:13
or Ukraine, and Just to mention,
40:17
numerous technology and competence centers, uh,
40:22
that hold untapped advantages.
40:28
Once fully unlocked, they could
40:31
significantly strengthen the deep tech ecosystem.
40:36
So Europe may not be the most competitive now, but
40:39
it's likely the most steady market. We believe that all those elements
40:45
are the counterarguments that Europe
40:48
will not be able to compete with the US and China. And
40:52
we believe that the defragmentation is the key
40:56
to unlock all those opportunities.
41:02
Um, for our audience, if you're a founder or investor in Europe,
41:06
we would be interested give us a comment of your country
41:09
pair, the two markets you're trying to bridge with funding,
41:13
say Germany, Poland. We'll highlight some of your cases in future
41:17
episodes. Tomas, you have
41:20
any advice for founders? Because looking back to your
41:25
first startup days and your early investor experience,
41:28
what two things would you do differently today?
41:32
And what should founders focus on when raising
41:36
cross-border? Well.
41:41
Back then there was literally no VC
41:44
ecosystem in Poland, so we had to bootstrap.
41:48
Due to the lack of capital,
41:52
we got stuck in Poland. We simply didn't have the capacity to go beyond.
41:57
So nowadays I would raise
42:01
funds from, from abroad and start
42:04
scaling from day one with the global mindset.
42:08
Today, the mindset should be global and
42:12
not local, not even regional, from day one. And
42:17
only those companies have the chance to be a
42:20
true success, uh,
42:24
the founders that are born with the global
42:28
mindset and go with this
42:31
setup, uh, of conquering the world.
42:35
That's the only way forward in my view nowadays.
42:42
Let's talk about a hidden gem as the last
42:45
question. What's one little-known legal or tax
42:49
tip every European founder should know before
42:53
signing the next term sheet?
42:57
Well, I guess there are many, many tips and tricks.
43:02
I believe that founders should
43:06
be really careful when
43:11
making— signing their first investment agreement.
43:15
I would say, first of all, conduct the
43:19
due diligence of your future investor.
43:24
Investment agreement, especially at the very early stage, is the
43:27
long-term contract. So be sure
43:31
with whom you are onboarding
43:35
on your mission. More
43:39
practical things: do not make any guarantees on your personal
43:43
property. Still, such elements are
43:46
happening from time to time. And
43:50
this can potentially lead to a lot of
43:54
tensions and a lot of unnecessary pressure on
43:57
the founder. Early-stage deals,
44:01
it's known to everybody that are very risky
44:05
and then can often fail. So you as the founder
44:08
shouldn't be putting more pressure on yourself than needed.
44:12
And The last thing, quite obvious,
44:16
but unfortunately still too often
44:20
overlooked: do not give away a large
44:24
portion of your equity for the seed investment. We have seen
44:28
so many broken cap tables that companies became uninvestable,
44:32
and it's a big pity. Tomasz.
44:39
Awesome closing words. Thank you very much. It was a pleasure having you as a
44:42
guest. Thank you, Joe. It was also a pleasure
44:46
having me with you.
44:55
That's all, folks. Find more news, streams,
44:59
events, and interviews at
45:00
www.startuprad.io.
45:05
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