 Slush. Are we getting started now? Yes, we are. It's good to be here. I think it's my sixth Slush and I can't believe how much has changed. So congrats everyone is organizing. So we want to talk a little bit about you know Europe's next wave of entrepreneurs and how we can make it better and bigger. So just to start I'm Martin Mignot. I'm a partner in X Ventures. We're a global VC fund. We've been investing in early-stage tech startups in Europe for the past 20 years. And it's been a pretty good wave so far. It started early in the 2000. That's just our portfolio with you know MySQL, Skype, and Bedfair in the UK. Then followed up quickly with a second wave of great billion-dollar-plus companies like King, Criteo, Justice, Supercell. And then you know more recently companies that haven't exited yet on the side. And that's just for our portfolio. You see you can add a lot of companies that unfortunately we didn't invest in like Zalendo, Klaunas, Spotify, Auto One, and a lot of others. So you can see bigger waves of larger companies. So Europe has been doing well in the past 20 years. And one of the reasons is that we've sold one of the most pressing issue that we had when we got started which was a funding issue. So you know when we get started 20 years ago there were very few venture funds, very little money being raised. And if you look at the past four years, the amount invested in startups has more than quadrupled. And with that the number of companies getting funded. So the capital is not the issue anymore. So if you think about those waves and how much money is now flowing into the market, you may think that everything is going great in Europe. And yet there is a nagging question hanging in the air which is where are the giants? Where are the companies that own an ecosystem, structure the ecosystem, invest in R&D, can acquire startups and can be worth not 10 or 20 billion dollars like the companies on the previous slides, but hundreds of billions or even a trillion like Apple is soon going to be. In Europe we are one or even two orders of magnitude behind the large U.S. companies or the large Chinese companies. So we ask ourselves, why is that? And what can we do to change it? And to us with 20 plus years of experience investing in tech companies here, it goes back to one thing. And one thing only which is talent. And how do you get the best talent to not work for Google and Facebook and Microsoft, all the large banks, all the large consulting firms in Europe, but going to the startup scene? There are two main ways to do it. One is I would say the soft part, which is the mission and the culture. And on that Europe has nothing to be ashamed of and can compete. And then there's a second aspect which is the reward, the monetary reward. And when you're a startup, monetary reward, you can't compete on the cash compensation. Facebook, Google, Amazon, they can all beat you on the cash component. The one thing you have going for you is the options, is the upside on the equity value. And that's the area where Europe is behind and where we lack for things to change. We spent the past six months researching and looking at more than 300 companies, their cap table, more than 4,000 option grants in Europe and in the U.S., in our portfolio and outside of our portfolio, and try to compare and benchmark things and see why Europe was behind on that area. And so the result of that survey, which is coming out on the index website, you can check it out, index ventures rewarding talent, there's a physical book and there is also a digital version. We got four key findings. It's a long survey, but there's four key findings. The first one, just to quantify the scale of the issue that we've got, is that European employees, at exit, on average, own half as many options as the U.S. counterparts. So it's about 10% versus 10% on the West Coast. And not only that, but on average, again, those options are taxed twice as much as the U.S. So you get half and you get taxed twice as much. Obviously it's much less attractive suddenly. And not only that, but also most of these options are skewed towards the more senior management versus non-senior execs. It's about two-third, one-third, while in the U.S. it's the other way around. And the last thing is that we have found out from this research is that the differences across countries, across sectors, across companies is just massive. While in the U.S. you have a fairly narrow range and things are very standard, you know, you get 10 or 12% in series A and so on and so forth. In Europe there's a really wide variation and each market operates in its own way. And we think that's not the best way to be competitive and to be attractive for talent. So we are launching that research, which is trying to be the ultimate guide for you entrepreneurs who are setting up your option plans on how to motivate, attract, retain your key talent, but also for policymakers to understand where do you stand. So we took a risk and created a ranking of countries across Europe for the most favorable to the least favorable. I won't give any spoilers now. I think we'll discuss it a bit later on stage in the panel. But that's the goal is to help entrepreneurs and policymakers to make their countries more attractive. And not only is there that guide that is helping you to say how much, to who, when should you give options. We've also decided to go one step further and create a web app called in a stroke of creative genius we call Option Plan. That you can go again on the index website and play with the tool to help you design your option plan. So I'll just show you a quick video to show you how it works and how it can be helpful to you. So go on our website, play with it, and hopefully that will help you out. And just to summarize, I would say our belief is that the best companies will win by being the most aggressive and the most generous with the talent because that's a global war for talent and you have to be competitive. And secondly is that the countries that are the most favorable to entrepreneurship are the one that will be hosting the next giant of Europe and which will make it possible finally to cross the 100 billion bar and potentially the trillion bar and really build a company or multiple companies equivalent to Amazon or Facebook or Google in the US. So thank you. Thank you, Martin. My name is Jonathan Moles. I'm the journalist in the room. Come here, Martin. I'm the guy who's been brought on to grill and stimulate some discussion here on a very important subject. I'm business education correspondent at the FT as well as presenter of our start-up stories podcast. I think about the anniversaries here. It's great to be back in Helsinki and here at the 100th anniversary of independence of Finland. It's actually my 18th anniversary of being at the FT and I was sinking back over the years and when I started I was writing about tech and visiting places like Helsinki. And back in those days, Al Gore was actually thought he was going to be president rather than talking about the current president and Prince William and I had a lot more hair as well. And back in those days, Google was a start-up itself. Facebook didn't even exist and yet now they are among the world's largest companies and there is a question of where are those European tech titans and I think what we are going to talk about here is whether we can stimulate that and what we can do to build the talent to build those world-beating companies. Now to start with Nicholas Johansson who is going to talk a bit about how governments can help in this process and about what you, Nicholas, are doing in Sweden. Thank you, Jonathan. Yes, and thank you for this presentation you have been doing. I hope that Sweden will move up the ranks. Last week, the parliament passed a new neural on stock options that will be available from the first of January in Sweden. But if you look at why from a government perspective in a country like Sweden, of course, having in our whole competitiveness strategy in a country like Sweden and in the Nordic region, we are looking at change all the time. We are small, open economies that you need to change all the time. And the start-up is a great driver for change, all the start-ups. So you really have to find ways in order to attract talent. And I can tell you in countries like, even though countries like Sweden and Finland are maybe not the best at bragging, we do realize with the November whether that attracting talent is not always the easiest thing to do, so you have to compete. Sometimes we thought that the best thing to do is to make people come here and get them hitched, then they might stay. But to find a partner. So we've also looked at some of the soft things, because this is a behavioral model, you know. It's both risk and reward. It's about security. It's about where you want to live. It's not only how big is the benefit when you hit gold. It's also how big is the risk if you fail where our social security systems, our education systems help with that. Basically, you don't have to worry that your kids is not going to get a good education if you fail, if your plans, which most of our start-ups do sometime. But one big element that we also wanted to include in Sweden is that we also want to compete better when it comes to stock options. So that's why we're introducing this new program now. And what do you have an assessment of whether it's a success or not? What are you going to look at and say we've succeeded in this scheme because we've seen this happen or that happen in Sweden? If you're looking at what the thing is like, it's very difficult for a government point of view to sit and say like this is the one that's going to succeed and this and that. But if you look at the stock option program, of course, we're introducing this now. It's the first time we're doing this. And there are, of course, there are always barriers that will meet problems when you do this kind of system, when it's not a general system. This is tax exemption. This is making it easier. We're moving taxation from the excise date to when you actually sell your shares later on and we're moving from income taxation to capital taxation. So basically there's a lot of benefit in that. But then we're not doing it broad. It's not for everybody. It's not for all the sizes of companies. So we're starting with smaller companies with the largest problem. And then we'll have to look and evaluate that. But I think there's, I hear from startups that have been meeting here that there's a lot of people are now looking at how to use this. So, Stefan, if I can bring you in, you have implemented stock option schemes. You've been involved in startups that have run these. Can you tell a bit about what that actually means in practice, maybe what you do at King? And what is the effect? What's the benefit of this? So stock options, it's one tool in the toolbox. There are many other instruments that you can use and that are relevant subject to what stage of development your company is in and also what you want to achieve. I think the key impact is really to make your employees feel and behave like owners because owners behave differently because they might go the extra mile, they might be more passionate and they have obviously a stake in the success of your company and that's very important especially as so many of tech companies and interactive entertainment for us are all driven by teams. So it's not the individual is the team and it's just a reflection of the fact that the team will succeed together. I think government and companies and leadership have a special responsibility to make sure the equity instruments are safe and simple. I've seen many years ago people going into personal bankruptcy because the equity was badly designed and I think that the work that index has done is fantastic because it's providing guidance and hopefully it's going to provide safety to entrepreneurs who don't have that experience as they build their companies. I think governments should be very mindful of what they expose potential employees to because there are very serious potential implications. That's one thing and the second thing is when we had to deploy equity plans inside King we were active in probably six or seven years of European jurisdictions and that has meant six or seven different equity plans. So it's very complex, it's very costly. If you have to take your company public later you will have to collapse every single one of these planning to a single plan and that's going to add to the complexity and the cost and the hurdle of potentially going public and creating a European champion. If you want European champions you need to have a European system for incentive plans and equity plans because as long as you have fragmentation it's going to be very hard to achieve. So you think maybe the bigger goal should be we should have more simplicity across Europe. Simplicity and harmonization of the taxation and the equity structures either for options or for RSUs which are restricted subunits or performance stock but there is an incredibly compelling case for harmonization there. And I think I would say it's a little bit what we're trying to do here as well. Just at least get the data out there so that people can see the massive gaps that exist today between systems across Europe. So at least people can see that's the best in class and the UK clearly is best in class. Sweden coming close now with the new plan and then trying to get everyone to reduce the spread and get closer and closer to best in class. But I'm saying OK, DEU needs to take that in charge and from the top down force everything. Just pushing from the bottom up and really trying to make sure that at least people are aware that this is an issue. That's what the situation is today, that Europe is behind and that countries that are competing against each other and with the rest of the world need to get on board and get closer to what best in class means. Yeah. And what sort of effect can it have, Martin, if they're implemented well? Well, we believe, I mean it's hard to quantify obviously, but we believe that that's the single most critical thing that could happen to the ecosystem because basically what you would do is that you would massively shift the attractivity of the startup ecosystem versus more traditional jobs whether in large tech company or other type of large companies. The talent pool available to startups would increase many fold and Europe doesn't lack talent. We've got great universities, we've got really well educated people but they don't work in the right places. They should become working in the tech ecosystem and that's what we're lacking. Is there an issue that we're focusing on stock options and there are many other things that stimulate people and I think Stefan and Nicholas sort of pointed that people are human, they have families and other things that they want to know that their company is nurturing that bigger self. Yeah, I think that's kind of the cultural element of it and obviously startups are not for everyone, clearly. It can be hard work, intense, insecure. It's not an easy environment but at the same time today the issue is exactly that, is that the imbalance between risk and reward is just totally, you know, it's cute because the risk is high so the reward needs to be high as well and today you don't have that high reward because it's too complex to operate these option plans as Stefan mentioned and whenever, even if you hit gold, as you would say by a company going public then you're going to be very heavily taxed and you wouldn't have had enough options in the first place to really make a difference. So I think those are all of these elements to keep in mind that we're discussing the risk-reward ratio in Europe. Yeah, Nicholas. Yeah, I think that it's very important to not look only at elements like stock options that we really have to broaden the view. We're discussing attracting talent, of course, one of the most important things which I think that day like today is evidence of is like bringing people together from all over the world attracting talent from all over the world, the openness, not building walls. That's extremely important to get that when it comes to when we are looking at how should we attract more talent? We are looking more at Sweden is very good. We can't be best at everything but we're good at some of these soft things and I do believe that we are especially good when it comes to talented women. I think they like Sweden. So that's one area where we are thinking of a target market. I was going to mention this one, Nicholas. There are more men here talking about the importance of diversity of talent for white men and people are motivated by different factors. I mean, on that gender element, is there anything you can offer on what we can do to gain from both sexes? Definitely, when it comes to, I think, policy-wise, there are many, many things you can do to improve equality and basically it's about giving women career opportunities and not having men and women have to choose between a career and family. The things we can do to combine this means a more equal society. We've come quite a way in the Nordic countries even though we have very long still to go but things like that, I told you backstage about this good vision of this picture of an American being in Stockholm, seeing all these men walking around with strollies and saying that, oh, why are there so many male nannies in Sweden? When nannies, they were on paternity leave which is, these are elements that one should put into this equation, I think. It's going to bring up your kids where both can work. It's not just gender. In your company, you have different types of people. Presumably there are people who are going to take risks because of a financial reward but actually encouraging people to take risks. Other people are stimulated by other things. What do you do and can you explain a bit about the different people in King? The majority of people, their main driver is not the financial reward. It's a necessary condition to add to a very compelling mission, a great culture and a great walking environment but to build on the point that Nicolas was making, diversity and inclusion is obviously a dominant theme in the workplace today because it's not only about making the work environment more diverse, it's also retaining the diversity and nurturing the inclusiveness once you have a diverse workforce and in addition to that, it's to make the workplace safe. I think the issues we're seeing right now with the MeToo movement is even if you achieve a high ratio of diversity and you strive for inclusiveness you still have many safety issues in the workplace which are bubbling up first in venture capital then in technology, then in the political circles right now in the UK. It's very complex because if something happens during the weekend, it's not your problem but as of Monday morning at 9am if the workplace is no longer safe and there is awkwardness, it becomes my problem. And we are now spending a lot of time thinking very hard on how we can make our workplace safer how we can provide a very confidential environment where there's no fear of retaliation where the channels are open, the confidentiality is respected and I think that's going to be a very big theme for the years to come in our industry and in the tech industry in general. And Martin, your point about the need for talent to come through and wanting more of this sort of risk taking among people, people getting involved in entrepreneurial ventures what sort of people are you thinking of here being missed at the moment and not drawn into this and how we can draw them in? I think it's across worlds, obviously there is a tech side so everything else which is marketing, comes, PR, finance, ups there's a very wide range of roles in startups it's not all about coders and developers and that's why you need diverse skillset and people who have been working in the hotel industry would be fantastic for working for Airbnb for example so I think we need a lot more of that as well of this cross-pollination between traditional sectors and the tech sectors. I think until we open up the floodgates then we won't have enough talent and the right talent to come work for the tech companies. Yeah, and you're advising a lot of companies as well as companies you're investing in and there are some really big success stories that Deliveroo has unicorn status $2 billion valuation now what do you think those sort of companies are doing to motivate people within them above and beyond stock options? Yes, I mean look stock option is clearly one I think we were always and I'm calling for all of our fellow investors to do the same which is to push the entrepreneurs to not think short term only about the dilution but think long term about getting the best people on board and thinking if you want to build a 10, 20, 30 plus billion dollar company it's going to require a lot of senior people, experienced people and that's going to have a cost for you and you should get prepared to dilute yourself to get these people on board and then I would say in Deliveroo's case the culture is critical they just move for example into a new office and your office space sounds like something logistical but actually for the first time they grow very fast it's very cramped space with rats and mice I mean it was quite disgusting for a long time and for the first time they move into a proper office I would say for the right size for the right team and that's made a massive impact into the kind of people they've been able to attract and retain as well and I think just having something as simple as the work environment is huge but I do think you need both you need the soft stuff that we've discussed but you also need the hard stuff and I think a lot of people are staying at Deliveroo as well because they think there are options that were issued four or five years ago in the EMI scheme with very low strike price on hours, you know, millions and you see it can be like Criteo for example when they went public everyone had options in the company and they made instantaneously more than 50 millionaires and then the company still grew and increased in value so probably more than 100 and all of these people it's only about them becoming rich that's great but most of them are now starting their company investing in their companies and so it's not only about Criteo it's about the ecosystem that goes around it and you see we just reinvested in Criteo's CEO new business and he's obviously reinvesting a lot himself because he's made money from the Criteo story and that's exactly the kind of snowball effect that we really want to get started and that's why options are not only about today and the company today but growing the pie for tomorrow Martin I think we could carry on this debate but I realise our time is up on the screen it feels like there's movement here in Europe maybe we're on the cusp of something in countries like Sweden we can do things but it's a lot more than money it's less and a good office helps exactly can we just thank the panellists here and we're on to the next hack thank you