Recently, The Irish Times published an excellent profile of Patrick and John Collison, the founders of Stripe and Ireland's representatives at the EY World Entrepreneur of the Year competition this week in Monaco.

The Collisons are a superb example for Irish entrepreneurs. They have shown ambition on a global scale and have executed fantastically, building great product that delivers for thousands of customers around the world.

I haven't met Patrick but I met John at a dinner hosted by Paddy Cosgrave in San Francisco a couple of years ago. He's smart and engaging but also humble and down-to-earth.

However, in relation to their comments on tax and entrepreneurship, they got things very badly wrong. Ordinarily, that wouldn't require any response. People can and do disagree on this issue. But John and Patrick Collison are special. People look up to them and place great store in what they have to say about entrepreneurship.

They are Ireland’s representatives at what is probably the closest thing that exists to an Olympics of entrepreneurship. What they say carries weight. For that reason, it’s important to respond and show exactly how they got it so spectacularly wrong.

Impact of taxation

Firstly, their reasoning is based on having made “a full-time job of talking to entrepreneurs” and noting that it’s rare to hear tax rates raised as an issue.

That’s not my experience, and I also have a full-time job of talking to entrepreneurs as a venture capital investor.

But the real problem is that they are talking to the wrong people. To understand the impact of taxation on entrepreneurship, you also have to talk to those who are not entrepreneurs because the risk-reward ratio simply doesn’t make sense to them.

You have to talk to those who were entrepreneurs and who gave up because they tired of the financial sacrifices that you frequently have to make.

In talking to current entrepreneurs you are talking only to those who are doing it anyway, in spite of everything. Quite rightly, they focus their attention on the problems that are within their control and those that will directly impact their business in the short term.

Secondly, the Collisons live, work and pay their taxes in the US. The US has a much more favourable regime from the perspective of entrepreneurs and those who work in startups than Ireland does.

Indeed, I seriously doubt that the Collisons are really that familiar with the details of the Irish taxation system and how it actively discriminates against entrepreneurs.

I feel reasonably confident that if the Collisons were fully aware, for example, of a tax regime for share option gains that can result in effective tax rates on those gains of over 60 per cent, they would see this as a problem that needs to be fixed. It’s a key driver of the ability of startups to attract the best talent from larger companies domestically and also from the international talent pool.

Finally, John and Patrick took a pop at those who have been campaigning to improve the tax environment for entrepreneurs in Ireland, implying that they are not entrepreneurs and that they don’t know what startups need or want.

In fact, many of those who have campaigned openly for a fairer and more supportive tax environment for entrepreneurs are very successful entrepreneurs in their own right – people such as Colm Lyon of Realex Payments, Pat Phelan of Trustev, Ray Nolan of HostelWorld and many others.

Bootstrapped

I started my first software company when Patrick was three and John was one. We bootstrapped the company for four years before raising, by today’s standards, a very modest amount of venture capital funding then going on to sell the company in 2000.

I’ve been co-founder of two other startups since. I think I know a thing or two about the price of turpentine.

Where the Collisons are right, however, is that taxation is only one part of the puzzle. We face a global “war for talent”. The countries that will be successful in the future will be those that create the most attractive and compelling environment for entrepreneurs to build their businesses and for other highly mobile talented people to join them on that journey.

Taxation is part of that; a welcoming, open and friendly culture is part of that; and so is a simple, transparent and flexible immigrant visa regime. Brian Caulfield is a partner at venture capital fund Draper Esprit and a non-executive director of the The Irish Times