Here’s what’s happening, regularly, throughout Europe: A US investor flies in, sits across from a pre-seed founder and tells them they have to move to the US and incorporate there. It is simply impossible to build a global company from Europe or raise serious money as a European entity.
The founder believes them. Why wouldn't they? The message is reinforced not just by media coverage, but even more aggressively by online critics and investors that frame European tech as structurally incapable of producing globally dominant companies.
What the founder is rarely told is that household US funds have no trouble investing in a European company, based in Europe. The supposed structural barriers are largely fiction. Decisions to uproot entire lives are being made on the basis of a marketing campaign against Europe’s tech ecosystem. So let us talk about what is actually true.
You do not have to incorporate in the US to succeed
More than four in five (85%) European founders say they want to stay exactly where they are, according to the State of European Tech 2025 report, a decision driven by the deep engineering talent, world-class research institutions and a quality of life we have here that has become one of the continent's most underrated advantages for attracting global talent.
The companies that chose to stay prove the point. Delivery unicorn Wolt built from a small, high-cost market with a fraction of its competitors' funding and scaled throughout Europe on product and discipline.
Vibe-coding platform Lovable, satellite scaleup Iceye, quantum computing company IQM, and legal tech Legora are some recent examples that prove a company’s destiny isn’t dependent on geography, but execution. All were built primarily from Europe, and have raised hundreds of millions of euros, proving that global companies can be built from here.
The capital gap
Europe does have a growth capital gap, and fixing it should be a policy priority. The continent still lacks enough domestic investors capable of consistently leading the very largest growth rounds.
But this is a scaling problem, not a company-building problem.
It is clear that what Europe needs is larger local growth funds. The birth of which can be supported by creating the right incentives for pension funds, institutional investors, and private capital to allocate more towards the frontier and by rewarding long-term investment in technology companies.
Luckily, institutions and policymakers are taking scaleup financing more seriously than they were even a few years ago.
New initiatives are already progressing, like the €5bn Scaleup Europe Fund now led by EQT, to bridge the growth funding gap and help the very best companies keep roots, talent and value creation in Europe while scaling globally.
Without a sense of urgency at our policymakers level, Europe will continue producing world-class companies while outsourcing too much of their scale-up and value creation to foreign capital.
But conflating a genuine capital gap with an impossible company building and fundraising environment means ambitious founders are more likely to look elsewhere before they’ve even tried to raise. Europe ends up exporting its best talent and ideas so other markets can scale them.
And despite the gap, major rounds are still happening in Europe. Mistral became one of Europe’s most valuable AI startups within a year of founding, Helsing has raised billions for defence technology, and Iceye has built a globally competitive space technology company from Finland. These companies should challenge the idea that globally significant businesses cannot be built and scaled from Europe.
The momentum is already here
The EU Inc initiative, which aims to make it easier to start and scale companies in Europe, is moving; 27 new European unicorns emerged in 2025, the third highest year on record; and quantum companies like IQM and Pasqal have announced plans to IPO via SPAC. Across the continent, founders are building category-defining companies without relocating. The simplification agenda on digital regulation is ongoing.
Europe's operating environment has not substantially worsened in the past year, but the narrative has. The good about that is that problems around story can be corrected a lot faster than those around infrastructure.
The ask is not to avoid doing business in the US, or to stop working with some of the world’s best investors who can support European companies in scaling or to pretend the problems do not exist in Europe. But to name what needs fixing in Europe, and name what is already working. Because right now, a new founder somewhere in Europe is sitting down with a visiting investor and is about to make a decision based on a story that is, at best, incomplete. They deserve better than that.
