Stop Telling European Founders to Move to the US

Why It Matters

The piece highlights that Europe’s talent and research base can drive world‑class companies, but closing the domestic funding gap is essential to keep those firms and jobs on the continent.

Key Takeaways

• 85% of European founders prefer staying in their home country
• European unicorns like Wolt and Iceye scale without US incorporation
• €5 bn (≈ $5.45 bn) Scaleup Europe Fund targets growth‑capital gap
• Policy focus on pension‑fund incentives aims to boost local VC
• 27 new European unicorns in 2025 signal rising ecosystem strength

Pulse Analysis

The myth that a startup must incorporate in the United States to attract serious capital is losing credibility. Data from the State of European Tech 2025 shows that a clear majority of founders value the continent’s deep engineering talent, world‑class research institutions, and lifestyle advantages. Companies such as Wolt, which grew from a high‑cost Nordic market, and space‑tech pioneer Iceye have demonstrated that execution, not geography, drives valuation. Their fundraising success—hundreds of millions of euros, roughly $110‑$220 million—proves that U.S. investors are comfortable backing European‑based entities.

Nevertheless, Europe still faces a pronounced growth‑capital gap. Domestic investors lack the depth to lead mega‑rounds, prompting a policy push for larger local funds. The €5 bn Scaleup Europe Fund, managed by EQT and equivalent to about $5.45 bn, exemplifies this shift, aiming to keep high‑potential firms rooted in Europe while providing the scale needed for global expansion. Incentives for pension funds and institutional capital are being crafted to channel long‑term money into frontier tech, a move that could narrow the financing chasm without sacrificing the continent’s innovation pipeline.

Momentum is already evident. In 2025, Europe produced 27 new unicorns—the third‑highest annual total—while quantum firms like IQM and Pasqal eye SPAC listings. Initiatives such as EU Inc streamline company formation, and regulatory simplifications are underway. As the narrative evolves, founders receive a more balanced picture: Europe offers a fertile ecosystem, and with targeted funding reforms, it can retain talent and value creation while still accessing global markets.