"Contrary to popular narrative, Europe is not short of cash. In aggregate, European households save $1.4 trillion a year-substantially higher than the $800 billion figure for U.S. households. According to data platform Dealroom, European investors in 2025 were sitting on $31 billion of dry powder, waiting to be invested. But where American capital is one of the U.S. economy's great strengths, famously accelerating business growth there, Europe's capital doesn't deliver in nearly the same way."
"Startups struggle comparatively to raise funds, turning to U.S. venture capitalists for 35% of the continent's growth funding pool, per Atomico's State of European Tech 2024 report. Lower liquidity in Europe's disjointed public markets, meanwhile, presents growth-stage companies with a stark choice: face the prospect of listing at lower valuations compared to the U.S., or IPO in New York. Despite Europe's leading talent pools and R&D capabilities, which are key ingredients for a flourishing innovation economy, the money isn't flowing."
European households save roughly $1.4 trillion annually, and investors held about $31 billion of dry powder in 2025, yet capital does not sufficiently fuel domestic business expansion. Startups turn to U.S. venture capital for roughly 35% of growth funding, and fragmented public markets reduce liquidity, forcing growth firms to accept lower listing valuations or seek IPOs in New York. Around 25% of European savings flows to international markets and too little is allocated to equity. Proposed policy reforms, such as the 28th Regime, aim to harmonize legal and financial frameworks to improve cross-border operations for startups.
Read at Fortune
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