It's not just startups. Trying to do business in France is insane. The bureaucracy is nightmarish and I really suspect bidding processes are rigged. The labour laws are far too skewed towards workers and away from companies. I certainly don't believe in exploitation, but you need balance.
I run a small software company with customers all over the world, including North America, Europe, Australia and South Africa. We do very well in Europe except in France; that's a desert for us. We've basically given up because it's just too difficult to do business there, and we're happy enough to work with more business-friendly countries like the UK, Netherlands, Sweden, Switzerland, etc.