Well, there are some ways that you can make start-ups more appealing for founders without increasing the reward. In the United States, creating a startup has c

Well, there are some ways that you can make start-ups more appealing for founders without increasing the reward. In the United States, creating a startup has considerable risk and cost. Health insurance comes to mind as the largest cost. Europeans don't have to worry about this in the same way and, therefore, are able to eliminate a cost of several thousand dollars from their startup budget. They don't risk being without health coverage by creating a startup (and that does lower the risk, therefore requiring less reward). Likewise, unemployment insurance is better which makes it easier for those whose start-ups might not pan out to feel secure. So, the government can lower the risk for founders in a meaningful way. I'm not saying that socialism is awesome or anything, just that certain social programs reduce the risk of doing a start up. Aaron Swartz (of reddit fame) once wrote an essay on this topic arguing this point: http://www.aaronsw.com/weblog/prostartup http://www.aaronsw.com/weblog/prostartup The lack of a social safety net requires founders to be in a good position - good health, no dependents (spouse, kids), etc. - or get enough VC that they can afford to go in that direction. It's clearly not the only issue - investment dollars still need to come from somewhere and this doesn't change that risk (other than lowering the amount initially needed since the VC wouldn't have to pay for things like health insurance), but personally it would go a long way for risk-averse me.