Lack of understanding of regulation and taxation can be a major obstacle for startup growth, according to Dina Pasca-Raz and Tim Dümichen, both executives at international accounting firm KPMG LLP.
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The two executives spoke at Calcalist’s WeTechBerlin conference, held last week in collaboration with KPMG, real estate company Aroundtown Property Holdings PLC, Bank Leumi, one of Israel’s two largest banks, its digital banking subsidiary LeumiTech Ltd., and European investment fund Target Global.
Pasca-Raz is head of international tax, grants, and Incentives at the firm’s Israel branch KPMG Somekh Chaikin, and Dümichen is a partner at the firm’s German branch, and co-head of KPMG’s Germany-based startup accelerator Smart Start.
Startups find themselves dealing with regulation and taxation for the very first time when they are trying to raise late-stage funding, and investors require them to examine these subjects, Pasca-Raz said. At first, companies focus on developing their product and assessing its market potential, but when it comes to accelerating growth, they often fail, Dümichen said. Dealing with regulation and taxes, and building an accounting and reporting system is crucial in building a company, he added.