The French economy stifles innovation. Taxes are high and it is prohibitively expensive and risky to add anyone to a payroll. Labor laws create de facto severance obligations that are impossible to raise money against. In effect, the safest place to be in the French economy is in the employ of the government – and that is exactly where I am finding the next generation of tech entrepreneurs. France has a strong history of technology transfer from government entities to the private sector. In France last month I met with several companies that are commercializing technology that originated within the French department of defense or atomic research groups. The founders are still on the government payroll, but carrying the business cards of their startups. And they are doing really cool things. They also have a built-in funding path through the quasi-governmental VCs that have as their LPs the large government contractors and defense firms.