A discussion regarding European startup bureaucracy drew widespread attention after Stripe CEO Patrick Collison shared the story of a German founder who paid a €30,000 notary fee to have a 90-page investment contract read aloud. Elon Musk reacted to the account with a single word: “Wow.”
Under Section 13 of Germany's Beurkundungsgesetz notarization law, notaries are required to read a full deed aloud to everyone present in the room. Parties must then approve the document and sign it by hand. This rule impacts startup funding rounds because the standard German company structure, the GmbH, cannot transfer shares or raise capital without a notarized deed.
The pricing for these services is set by state law rather than individual notaries. Under the GNotKG statute, fees are tied directly to the value of the deal, meaning larger funding rounds incur significantly higher costs regardless of how many hours the reading takes. A ruling by the Higher Regional Court of Karlsruhe demonstrated this math when it upheld a notary bill reaching roughly €100,000 for a transaction assessed at approximately €35 million, which included a €63,110.85 fee for the reading alone.
Other industry figures joined the conversation online. Y Combinator co-founder Paul Graham contrasted the practice with the US system, where investors use standardized SAFEs without public readings or statutory tariffs. Just Eat Takeaway founder Jitse Groen estimated that his company's contract reading stretched through the night and cost at least €200,000. Meanwhile, Italian founder Stefano shared a seed round experience involving a disputed power of attorney between Italian and Belgian notaries that resulted in a €21,000 invoice and mandatory in-person signatures.
To address such administrative hurdles, the European Commission proposed EU Inc. in March. This optional EU-wide company form aims to enable fully digital formation within 48 hours. However, Article 14 of the draft requires company articles to pass preventive administrative, judicial, or notarial control, leaving critics concerned that notary requirements could persist.
Amid these policy debates, Collison and former European Central Bank President Mario Draghi launched the Rhine Group. The 55-member forum of policymakers, economists, and entrepreneurs aims to push for European reforms based on Draghi's 2024 competitiveness report, with its first meeting scheduled for late September.
