Bureaucracy and procedure are two things German startup founders are deeply familiar with. And a post on X, formerly Twitter, over the weekend has rekindled a longstanding argument that the country's administrative burden is stifling innovation. Stripe CEO Patrick Collison posted on X on Saturday that he recently met with a German founder and asked whether stories of the challenges German startups face are exaggerated. "No, they're understated," Collison said the founder replied. The founder proceeded to describe spending a full day having a 90-page investment contract read to him (mandatory under German law)...by a notary that then charged €30,000. That was for his first company.

Collison's post sparked a flurry of other comments doubling down on how bad the situation is for startups in Germany. Some founders replied that they had similar stories, sitting for hours while notaries read out their contracts for a hefty fee; others pointed to how strong the notary lobby is in Germany. Some founders also remarked that it's systemic issues, like the tax and VAT system and employment laws, that are deterring startups.

Florian Huber, cofounder and managing partner of German accelerator EWOR, wrote on Linked In that burdens like notaries are pushing founders to register their companies elsewhere and are making the country look bad (even Elon Musk commented on Collison's post), describing them as devastating second and third order effects.

Rejecting 'defeatism' However some believe that getting hung up on laborious legal procedures is an excuse. Helsing cofounder Torsten Reil said on a recent podcast that it's underestimated how much of a difference aggression and ambition makes. ...Everything else is excuses. Regulation doesn't matter. Yeah sure it takes longer to start a company in Germany. Yes you have to go to a notary. Who cares?

A longstanding criticism It's not a new issue for German founders and investors to gripe about. Everything from onerous wads of paperwork to change a company address to marathon notary sessions have put a burden on startups for years. "Everything I do as a founder, when it comes to formalities, feels like I'm building a factory for metalworking in the 1800s," Berlin-based founder Jérôme Bau told Sifted back in 2024. "I go to notaries, there's a lot of paper, nothing is digital. There are things taped together. It all feels very ancient."

Still, the bureaucratic issues aren't stopping German startups from wooing investors. In particular, three of the country's most hyped startups — defence techs Helsing and Quantum Systems and robotics maker Neura Robotics — raised 44.3%, or €3.83bn, of the €8.64bn raised by all startups in Germany from January through July, according to new Sifted data.