Tech leaders to pressure European politicians to revise ‘archaic’ laws

More than 30 business leaders and entrepreneurs from across the technology industry have signed a letter to be delivered to European policymakers in January, urging them to consider updating EU laws on giving employees shares in the startups they work for.

With signatories including the bosses of firms such as Transferwise, Delivery Hero, Anthemis and Funding Circle, the letter will warn that while "the days of living in Silicon Valley's shadow are over", the current legal rules on rewarding stock options in young businesses will create "a brain drain of Europe's best and brightest".

Research to be published by Index Ventures in December, being used alongside the letter, will show European employees own around 10 per cent of the firms they work for, compared to 20 per cent in the US.

The firm will argue this makes it harder for European companies to attract top talent, if they're not able to give them a slice in the company's growth.

"Europe could be the world’s most entrepreneurial continent but the limited availability of talent to nurture and fuel its blossoming start-up ecosystem is a serious bottleneck to growth," the letter will say.

"This isn't just a perk on top of a salary: universally, stock options reward employees for taking the risk of joining a young, unproven business, and give them a real stake in their company's future success."

Instead, EU policymakers will be asked to adopt a similar structure to that of the UK, and ditch "patchy, inconsistent and often punitive rules that govern employee ownership".

Six policy recommendations will be set out in response, including allowing startups to issue stock options with non-voting rights and deferring taxation until they sell their shares.

Other signatories include Klarna founder Sebastian Siemiatkowski, Stripe founder Patrick Collison and UiPath chief Daniel Dines.