4 ms·

The glaring number to me is only 5% of VC funds vs 52% in the US. That's 10x more opportunity despite roughly comparable economies. As long as that is true, it

by zmmmmm 6mo ago

The glaring number to me is only 5% of VC funds vs 52% in the US. That's 10x more opportunity despite roughly comparable economies. As long as that is true, it seems like it will always be impossible to get an organic startup industry working in the EU. Any startup that is any good will almost certainly end up getting a round of investment from the US and most likely move their base of operations there. I wonder if recent US actions will start to influence this as there now appears to be more risk in sending your money to the US or founding your company there as a foreign entity than there used to be.

enejej 6mo ago
The funding allocation is a reflection of different cultures really. I’m from the UK but there’s no way there’s the same density, drive, and hunger to take risk, to the extent that you find in US. Also there’s a lot more synergy in the US vs a fragmented Europe.
- zmmmmm 6mo ago
  Yet the UK did produce Deepmind. Which you can look at both ways since it got gobbled up by Google. But it at least came from the UK. I assume the article excludes the UK, I feel like UK has much more of a startup and VC scene than Europe does and I wonder if that is part of the issue : if you do want to create a startup, the London is a better place than mainland Europe. So even startups that for whatever reason won't take US funding still land outside Europe.
  - re-thc 6mo ago
    > Yet the UK did produce Deepmind That was a long time ago. That UK is not the UK of today.
  - yobbo 6mo ago
    Deepmind was not a viable business at the time Google acquired it. Today, it is probably even less viable. It functions as R&D-lab for Google which has its own products and datacenters.
- doctorpangloss 6mo ago
  There are places with the same entrepreneurial drive that are part of the EU. But look at an LP-facing deck for a VC fund in Europe, and I can't recall ever seeing an investment with a little flag of Poland. My belief is the underlying dynamics are less about, generalizing about cultures. Like you're right that that's what US VCs say, and collective belief is truth in markets even if it is not truth in reality. The bigger factor is EU, meaning French, Dutch, German, Swiss and Italian capital, are concentrated into the hands of large, opaque family trusts, structured primarily around tax evasion first and foremost, and other feudal issues, rather than minimizing the downsides of real risk or whatever, and that feudal stuff means, why do early stage investing? Without that there's little innovation. Hence Mistral, a growth stage company that everyone is happy making the growth stage, "dot AI" and "dot EU" winner. Presumably for EU sovereign wealth to be forced to buy.
  - deaux 6mo ago
    > There are places with the same entrepreneurial drive that are part of the EU. Name them rather than being vague, clearly people here want to hear where they are.
- kitbrennan 6mo ago
  I’m also from the UK and I think this is a self-fulfilling prophecy. As a UK founder that has raised in the UK, I have seen our US competitors raise substantially more with substantially less traction, so in future I’m significantly more tempted to look across the pond for raising. It has little to do with my culture vs theirs, and all to do with where the opportunity sits. Many of the other founders I know with the “drive and hunger” as you put it, have already made the same jump.
  - zmmmmm 6mo ago
    there's probably a high correlation between people with the "drive and hunger" to build a startup in the first place with those that would have the "drive and hunger" to relocate overseas to make it successful.
  - abletonlive 6mo ago
    > It has little to do with my culture vs theirs, and all to do with where the opportunity sits. So it does have to do with culture. The US has better culture for starting a business. You can't just divorce the opportunity that came from the culture just to make a point.
  - deaux 6mo ago
    This seems pretty limited to tech. For example in domains like media and marketing - I mean startups in these fields, not "marketing team of a tech startup" which is tech - the amount of "drive" feels the same whether the US or the EU. So it's purely tech. And there, that extra "drive" that leads to the US and modern VC culture seems to largely be based on a hunger for power and immense wealth, when it comes down to it. I know everyone pretends it doesn't, changing the world for the positive, blah blah. But when push comes to shove, that's the outcomes we're seeing.
tokai 6mo ago
Imagine all the great investments the US VCs are missing outside of AI.
tjwebbnorfolk 6mo ago
Not just startups or funding. Google alone has more AI compute than China and the EU combined. There's no shortage of capital in Europe. But nobody wants to take the risk. Meanwhile in the US, people are putting 10-100x the capital at risk. So you can say what you want about it looking scary to you to invest in the US, but the people with capital to invest clearly don't see it that way. More often when you hear VCs give interviews, they are saying the opposite: that never-ending EU regulations introduce more business risk than anything the US president could possibly do.
- enejej 6mo ago
  I’m not all that convinced on the regulation part. Ultimately it’s all about investing money to create real assets that generate cash flows. One can side step regulations to some extent whilst developing a product (nobody cares/notices until you are actually growing fast) and then deal with regulations later. Uber already showed this and the leading AI firms are following the same act - having ripped off a lot of content but nobody threw a fit until a legit asset came out of it.
  - shimman 6mo ago
    Yes, let's ignore regulations that provide people with stable jobs, societies, and countries. Afterall what good is democracy when the alternative is making more money?
    - enejej 6mo ago
      [flagged]
    - valkmit 6mo ago
      A lot of these are mostly well-meaning but have backfired. The only way an international business is going to consider investing in French workers, for example, is with relatively low salaries to offset the inability to fire them. It's counterintuitive but if you allow "failing fast", you lower risk of new engagements, and this allows for more speculative bets on ideas and people. Make it difficult to evict tenants? Expect more stringent requirements from landlords Enact rent control? Initial rents are going up, new builds are are disincentivized. Strong worker protection? Expect fewer highly paid roles (wage compression) I'm not saying these regulations are unilaterally bad - I'm saying don't be surprised that there are 2nd-order effects that are arguably just as bad, if not worse.
latexr 6mo ago
I don’t consider VC investments to be particularly beneficial to the world. This idea of “let’s use capital to make it faster for people to exploit others with the only goal of generating more capital” does more harm than good.
- TonyStr 6mo ago
  Venture Capital is how entrepreneurs get off the ground and are able to try out new ideas. It is of both the entrepreneur's interest and the investors' interest that the product or service being developed captures value in the market, so they can reimburse their original investments. Without Venture Capital, we are limiting business creation to people who are already wealthy, which severely limits the pool of potential creativity that the society can utilize. We have regulations in place to make it more difficult and more risky for businesses to engage in immoral behavior, but these regulations usually appear after observing bad behavior.
  - deleted 6mo ago
    [deleted]
exiguus 6mo ago
That's why Mistral is not focused on raising venture capital. Instead, they prioritize securing government contracts; hence their significant political lobbying efforts.
- pbgcp2026 6mo ago
  [dead]
0xbadcafebee 6mo ago
This assumes one would want a startup industry. It's a bit like wishing your country had more private equity.

by zmmmmm 6mo ago

enejej 6mo ago

The funding allocation is a reflection of different cultures really. I’m from the UK but there’s no way there’s the same density, drive, and hunger to take risk, to the extent that you find in US. Also there’s a lot more synergy in the US vs a fragmented Europe.

zmmmmm 6mo ago
Yet the UK did produce Deepmind. Which you can look at both ways since it got gobbled up by Google. But it at least came from the UK. I assume the article excludes the UK, I feel like UK has much more of a startup and VC scene than Europe does and I wonder if that is part of the issue : if you do want to create a startup, the London is a better place than mainland Europe. So even startups that for whatever reason won't take US funding still land outside Europe.
- re-thc 6mo ago
  > Yet the UK did produce Deepmind That was a long time ago. That UK is not the UK of today.
- yobbo 6mo ago
  Deepmind was not a viable business at the time Google acquired it. Today, it is probably even less viable. It functions as R&D-lab for Google which has its own products and datacenters.
doctorpangloss 6mo ago
There are places with the same entrepreneurial drive that are part of the EU. But look at an LP-facing deck for a VC fund in Europe, and I can't recall ever seeing an investment with a little flag of Poland. My belief is the underlying dynamics are less about, generalizing about cultures. Like you're right that that's what US VCs say, and collective belief is truth in markets even if it is not truth in reality. The bigger factor is EU, meaning French, Dutch, German, Swiss and Italian capital, are concentrated into the hands of large, opaque family trusts, structured primarily around tax evasion first and foremost, and other feudal issues, rather than minimizing the downsides of real risk or whatever, and that feudal stuff means, why do early stage investing? Without that there's little innovation. Hence Mistral, a growth stage company that everyone is happy making the growth stage, "dot AI" and "dot EU" winner. Presumably for EU sovereign wealth to be forced to buy.
- deaux 6mo ago
  > There are places with the same entrepreneurial drive that are part of the EU. Name them rather than being vague, clearly people here want to hear where they are.
kitbrennan 6mo ago
I’m also from the UK and I think this is a self-fulfilling prophecy. As a UK founder that has raised in the UK, I have seen our US competitors raise substantially more with substantially less traction, so in future I’m significantly more tempted to look across the pond for raising. It has little to do with my culture vs theirs, and all to do with where the opportunity sits. Many of the other founders I know with the “drive and hunger” as you put it, have already made the same jump.
- zmmmmm 6mo ago
  there's probably a high correlation between people with the "drive and hunger" to build a startup in the first place with those that would have the "drive and hunger" to relocate overseas to make it successful.
- abletonlive 6mo ago
  > It has little to do with my culture vs theirs, and all to do with where the opportunity sits. So it does have to do with culture. The US has better culture for starting a business. You can't just divorce the opportunity that came from the culture just to make a point.
- deaux 6mo ago
  This seems pretty limited to tech. For example in domains like media and marketing - I mean startups in these fields, not "marketing team of a tech startup" which is tech - the amount of "drive" feels the same whether the US or the EU. So it's purely tech. And there, that extra "drive" that leads to the US and modern VC culture seems to largely be based on a hunger for power and immense wealth, when it comes down to it. I know everyone pretends it doesn't, changing the world for the positive, blah blah. But when push comes to shove, that's the outcomes we're seeing.

tokai 6mo ago

Imagine all the great investments the US VCs are missing outside of AI.

tjwebbnorfolk 6mo ago

Not just startups or funding. Google alone has more AI compute than China and the EU combined. There's no shortage of capital in Europe. But nobody wants to take the risk. Meanwhile in the US, people are putting 10-100x the capital at risk. So you can say what you want about it looking scary to you to invest in the US, but the people with capital to invest clearly don't see it that way. More often when you hear VCs give interviews, they are saying the opposite: that never-ending EU regulations introduce more business risk than anything the US president could possibly do.

enejej 6mo ago
I’m not all that convinced on the regulation part. Ultimately it’s all about investing money to create real assets that generate cash flows. One can side step regulations to some extent whilst developing a product (nobody cares/notices until you are actually growing fast) and then deal with regulations later. Uber already showed this and the leading AI firms are following the same act - having ripped off a lot of content but nobody threw a fit until a legit asset came out of it.
- shimman 6mo ago
  Yes, let's ignore regulations that provide people with stable jobs, societies, and countries. Afterall what good is democracy when the alternative is making more money?
  - enejej 6mo ago
    [flagged]
  - valkmit 6mo ago
    A lot of these are mostly well-meaning but have backfired. The only way an international business is going to consider investing in French workers, for example, is with relatively low salaries to offset the inability to fire them. It's counterintuitive but if you allow "failing fast", you lower risk of new engagements, and this allows for more speculative bets on ideas and people. Make it difficult to evict tenants? Expect more stringent requirements from landlords Enact rent control? Initial rents are going up, new builds are are disincentivized. Strong worker protection? Expect fewer highly paid roles (wage compression) I'm not saying these regulations are unilaterally bad - I'm saying don't be surprised that there are 2nd-order effects that are arguably just as bad, if not worse.

latexr 6mo ago

I don’t consider VC investments to be particularly beneficial to the world. This idea of “let’s use capital to make it faster for people to exploit others with the only goal of generating more capital” does more harm than good.

TonyStr 6mo ago
Venture Capital is how entrepreneurs get off the ground and are able to try out new ideas. It is of both the entrepreneur's interest and the investors' interest that the product or service being developed captures value in the market, so they can reimburse their original investments. Without Venture Capital, we are limiting business creation to people who are already wealthy, which severely limits the pool of potential creativity that the society can utilize. We have regulations in place to make it more difficult and more risky for businesses to engage in immoral behavior, but these regulations usually appear after observing bad behavior.
- deleted 6mo ago
  [deleted]

exiguus 6mo ago

That's why Mistral is not focused on raising venture capital. Instead, they prioritize securing government contracts; hence their significant political lobbying efforts.

pbgcp2026 6mo ago
[dead]

0xbadcafebee 6mo ago

This assumes one would want a startup industry. It's a bit like wishing your country had more private equity.