How Europe Can Facilitate Startup Growth
The following contribution is from the Financial Times website and is written by Brent Hoberman, co-founder and chairman of Founders Forum Group, firstminute capital, and Founders Factory.
Entrepreneurs and investors unite to call for a voluntary pan-European legal framework for startups.
The future is written by entrepreneurs. Europe needs more of them to choose it as a place to grow and scale in a world of shifting partnerships and economic challenges.
However, a recent investment experience highlighted a critical weakness in achieving this: the fragmented and cumbersome regulatory environment that hinders not only our startups, but also innovation and growth across the European economy. We were excited to make a small investment in an ambitious Austrian climate technology startup, until we found ourselves lost in a bureaucratic maze with more twists and turns than a mountain goat’s trail.
Video calls with notaries to verify each signature (and there were many). A ridiculous call with multiple expensive lawyers who had to read long investment documents aloud, even though we had already reviewed the documentation ourselves.
All this for a small funding round. It was completely disproportionate.
If we had invested in the UK or the US, it would have been a matter of minutes: digitally sign, transfer the money, and that’s it.
But in Austria? Weeks of arduous legal procedures. After enduring this madness, our lawyers offered us a small consolation: «If you think Austria is bad, Germany is worse.»
This isn’t just an annoyance, but an existential problem for Europe’s growth ecosystem.
For our startups to compete globally, they need to be truly pan-European: able to raise capital, operate, and scale seamlessly across borders. Right now, that’s simply not the case.
From obtaining travel licenses to managing complex HR systems (an area France is particularly difficult to navigate), stock option laws, and company formation rules, each country adds layers of friction.
While helping to build lastminute.com, I encountered these obstacles firsthand.
The only way to scale quickly was to buy companies in multiple geographies, because navigating local regulations was a costly headache.
Meanwhile, in the US, startups can scale relatively easily from New York to California, raising capital and hiring talent seamlessly under a prevailing legal framework.
Perhaps it’s no surprise that US startups raise more than double the funding of their European counterparts.
If more European companies could operate seamlessly across the continent, more would likely secure—and deserve—larger funding rounds.
But the good news is that thousands of EU entrepreneurs and investors are uniting to call for a pan-European legal framework for startups, which would standardize administrative processes, from company formation to investment structures.
The proposal, dubbed «EU Inc,» has been backed by the founders of major tech companies like Stripe, Supercell, and Wise.
This isn’t a new problem. In 2016, we recognized the need for a European startup passport and rallied many leading EU founders to support the idea.
Then Brexit came. But now there might be the will and the means to make it happen. And the economic argument is clear.
What we find particularly interesting about this proposed framework is that it would stand outside the current EU system as a «28th Regime,» a parallel and voluntary legal framework that any country, including the UK, could, in theory, join.
It’s an opportunity for British startups to access the market and operate more easily across the EU, and vice versa, without reopening the Brexit debate.
It’s a low-risk, high-return measure that fosters economic cooperation while preserving the UK’s independence.
It may even deserve a place on the agenda of the next EU-UK summit in May.
For better or worse, some entrepreneurs are now talking about MEGA (Make Europe Great Again).
While appropriating Trump’s language may not be the best strategy, the idea is sound.
Europe needs to be a more attractive place to start businesses, and that starts by reducing friction for founders, freeing up capital, and facilitating expansion.
Economic ties generate social ties. And in a time of growing division, we should work for greater economic and business unity, not adding more barriers.
Rohan Silva, founder of Second Home and the Libreria bookstore, contributed to this article.
Towards a European Strategy for Startups and Scaleups
The following contribution is from the European Commission’s Research and Innovation portal and is authored by the team.
The Commission is developing a European Strategy for Startups and Scaleups by 2025. Why it is needed, how to contribute, news, and events.
In 2025, the European Commission will adopt a European Strategy for Startups and Scaleups.
Letta Report and Draghi Report
The Commission has placed startups, research, and innovation among the key priorities of its mandate, with the aim of closing the innovation gap between the EU and its global competitors and boosting competitiveness, taking into account the Letta Report on the Future of the Single Market and the Draghi Report on European Competitiveness.
The Competitiveness Compass, adopted in January 2025, indicates that this Strategy will be one of the first flagship actions to be adopted, within its first pillar, «Closing the Innovation Gap.»
The Strategy will subsequently be translated into various concrete measures, including legislative proposals such as the European Innovation Act or the so-called «Regime 28» for innovative companies.
The Strategy seeks to foster an innovation-friendly environment that facilitates and accelerates the growth and expansion of innovative European startups in the Single Market.
It is expected to address the difficulties faced by European startups and scaleups in accessing the capital, markets, services, infrastructure, and talent needed to thrive in Europe and compete globally.
The Savings and Investment Union
The Startup and Scaleup Strategy will be closely linked to other flagship actions of the Competitiveness Compass, such as the «Savings and Investment Union,» the «Single Market Strategy,» and the «Skills Union.»
Why is the strategy needed?
Startups and scaleups are among the main drivers of innovation, as they often develop and bring to market innovative and disruptive products and solutions.
A thriving startup and scaleup ecosystem plays a pivotal role in economic growth and market evolution, boosting productivity, incentivizing investment, and creating quality jobs.
EU startups and scaleups have the potential to create new markets where the EU can take a global lead, while increasing its competitiveness by closing the innovation gap with its main global competitors.
– The Startup and Scaleup Initiative was launched in 2016 with the aim of removing barriers that prevent startups from scaling up within the Single Market.
– The European Innovation Council, Europe’s flagship innovation program to identify, develop, and scale disruptive technologies and breakthrough innovations, was launched in 2018.
However, the EU’s regulatory and business environment is still not conducive enough to deliver innovative products, services, and solutions to users at the necessary scale.
As a result, many innovative companies end up seeking venture capital and expanding opportunities outside Europe: around 60% of global scaleups are based in North America, compared to just 8% in the EU.
The EU’s share of total global venture capital raised is only 5%, compared to 52% in the United States or 40% in China.
There is an urgent need to address the financial, regulatory, and administrative obstacles that limit or slow down startups’ growth and enable them to become established and profitable businesses in the Single Market, and to incentivize them not to relocate outside the EU.
How to participate
Everyone can contribute to the design of the EU Strategy for Startups and Scaleups by participating in the online consultation published on the «Have your say» portal, which will be open until March 17.
Contributions will be collected, analyzed, and processed to inform the Strategy and the instruments that the Commission will propose in the coming months. In addition, various events are being organized to gather the views of stakeholders.
Events
At the initiative of the Commission, public authorities, organizations, and private entities are organizing various events, meetings, and forums to gather the views of stakeholders.
European Startup and Scaleup Forum
As Commissioner Zaharieva announced in her appearance before the European Parliament, a series of meetings with founders, CEOs, and other stakeholders, the European Startup and Scaleup Forum, will be organized in 2025 to support the Commission in developing the Strategy for Startups and Scaleups.
This process incorporates the experience and opinions of key innovation stakeholders, which, along with other forms of consultation, will usefully contribute to the development of the strategy, from its inception to its implementation.
The first meeting took place on February 17. Additional meetings will be held throughout the year.
Europe needs to make it easier for its startups to start a business.
The following contribution is from the Tech.eu portal, the leading online publication dedicated to Europe’s growing technology ecosystems. It offers a range of editorial products with a clear focus on curated news, practical information, and educational interviews with influencers from across Europe, combined with insightful market intelligence reports based on our proprietary database, events, a job platform, and a variety of other services.
The author is Monty Munford.
Global territories like the UAE and the US are making it easier to start a business, meaning that Europe’s tendency toward bureaucracy and red tape is holding back innovation.
For any startup looking to establish itself in Europe, there is enormous competition from other territories struggling to offer easy routes to incorporation and market access.
The US has always made it easy to start a business, and business-friendly states like Delaware and Texas are home to numerous European companies that consider themselves European but are headquartered there.
In recent years, the UAE has offered companies a significant advantage in establishing themselves there.
Furthermore, the time zone benefits from its location between Europe and Asia, making it a near-perfect location and a bridge between continents.
Even in the post-Brexit UK, which is not currently perceived as a hub for innovation, it is extremely easy and inexpensive for startups to register with the Companies House and start their business.
Furthermore, it is cost-effective and doesn’t require expensive third parties to guide founders through bureaucracy and red tape. On the EU website, it seems just as easy, but the reality is sometimes very different, especially given the cost of starting a company.
According to the EU, it «encourages all countries to meet certain targets to assist the creation of new businesses,» requiring startups to comply with regulations from the outset.
It states that it costs less than €100, can be set up in three working days, all procedures can be completed through a single administrative body, and all registration formalities can be similarly completed online.
This sounds great, and there are other promises of EU support as well. Startup Europe is an initiative that brings together investors, accelerators, universities, corporate networks, and media to support startups.
The InvestEU portal also brings together investors and project promoters in a single EU-wide database of investment opportunities, and the Startup Europe Partnership is an integrated platform offering trans-European open innovation and a database of investment opportunities.
So far, so good, but what’s the reality like in the real (European) world?
Cristóbal Alonso is the charismatic CEO and general partner of Startup Wise Guys and doesn’t hesitate to tell it like it is.
His company was founded in Estonia in 2012 and, in the 13 years since then, has supported more than 800 founders of all nationalities across Europe, resulting in more than 20 successful exits.
In a conversation, he mentions that, unlike China and the US, innovation and technological growth in Europe are not limited to a few large cities. With more than 65 cities, the European startup ecosystem relies on diversity and local talent.
Startup Wise Guys has been advocating for decentralization beyond traditional hubs for years, investing in places like Vilnius, Porto, Bucharest, Bilbao, Malaga, and Tallinn, but Alonso understands the challenges startups face.
A major issue is the impact of bureaucracy on time and money. Many EU-based startups establish themselves in US states like Delaware, as it can be done in one day and at a very low cost—and, of course, electronically.
This isn’t the case in many European countries, although the UK, Ireland, and Estonia offer completely online company registration, minimizing traditional notary fees.
However, in countries like Germany, Austria, and Belgium, notary services remain an integral part of the incorporation process,
which significantly delays and increases the cost of the process when companies are at their most fragile.
Even worse is the formalization of capital increases in later rounds.
We have cases where an entire funding round was delayed several times at the notarial level for months! It’s time for the EU to streamline the process in all member states.
Alonso’s comments echo those of Benoit Vandevivere, a tech startup founder and EU policy advisor.
Vandevivere has advised (and continues to advise) governments and institutions, including those in Europe, on improving their laws and increasing their competitiveness, attractiveness, and growth.
He also supports entrepreneurs and investors to make governments and institutions more friendly to scientists, creators, founders, and their supporters.
With experience as an entrepreneur, engineer, and lawyer, he is ideally positioned to discuss the challenges Europe faces in attracting startups.
Europe must match the world’s leading business destinations, such as the United States, in speed, agility, and pricing.
Imagine investing in seconds, completely online, 24/7, without the cost of notaries and registration procedures that can be completed in an hour, not 15 business days as in the EU.
But what about the startups themselves?
Chris Skinner is a serial entrepreneur and sought-after global speaker on FinTech.
Having settled in Poland after moving from the UK, he appreciates the positive local atmosphere, with government support and strong investor interest, but challenges persist.
I live in Poland. I’m involved in many startups, especially in the fintech sector, obviously.
However, it varies by country. Estonia and Lithuania are very popular because they are small European countries where business is done immediately with 27 countries; that’s why Revolut moved to Lithuania.
Overall, however, Europe needs to build something pan-European that can compete with China and the United States.
In that context, what we mainly see is that the United States innovates, China replicates, and Europe regulates. This is the big
