"Only 5% of global venture capital is raised in the EU, according to the European Commission . The US, by contrast, attracts more than half, while China takes 40%. Yet Europe isn't capital-poor: households save €1.4tn a year , nearly twice as much as in America. Still, very little of that money finds its way into startups, despite a plethora of incentives like the UK's EIS tax relief for business angels."
"Even when funding is available, Europe's venture capital firms are slow and cautious. Funds spend weeks on diligence and hesitate once valuations rise past $10-15mn. Regulation is often cited as a hindrance, and to some extent, it is. However, American funds backing European startups operate under the same regulatory frameworks, yet their capital keeps flowing freely. The drag isn't the law itself. It's investors who interpret rules conservatively - instead of moving decisively."
Europe raises only 5% of global venture capital while the US attracts over half and China 40%. European households save €1.4tn annually, yet little of that capital flows into startups despite tax incentives like the UK's EIS. European venture firms conduct lengthy diligence and often hesitate as valuations exceed $10–15m. Regulation is cited but American funds face similar rules and still invest. The principal drag is conservative investor behaviour rooted in banks, insurers, pension funds, and the Mittelstand mindset focused on capital preservation. Venture capital arrived later in Europe and largely funded e-commerce, fintech, and delivery rather than deeptech breakthroughs.
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