Europe’s startup founders face a stark choice: build in the bloc or follow the money to Delaware. Brussels has unveiled a two-track plan to keep high-growth companies at home, but one track may already be losing momentum.
The European Commission is working on parallel initiatives. A Scaleup Europe Fund, managed by Swedish investment firm EQT, would seed €1 billion from Brussels with a target of €5 billion total. Alongside it, a proposed “28th regime” for corporations, dubbed EU Inc, aims to create a single incorporation framework across the bloc.
The financing gap remains severe. OECD data shows US venture capital investment has ranged between 0.5% and 1% of GDP over the past decade. Meanwhile, the largest EU economies have reached roughly 0.1% at best. Even stronger performers like Sweden, the Netherlands, Switzerland, and the UK top out near 0.2%.
Europe’s financial system remains heavily bank-based compared to the United States. Victor Englesson, partner at EQT and co-head of the scale-up fund, argues Europe needs trillion-euro companies and far larger capital pools to support cloud computing, AI, and advanced robotics. Keeping successful founders building in Europe matters, he says, because the wealth they create can then be recycled into the region’s technology ecosystem.
The regulatory side tells a different story. EU Inc was designed to let entrepreneurs incorporate once and operate everywhere, but key features have already been stripped. A single company registry and unified insolvency rules were removed. Harmonised employee stock option rules now apply only below a certain company size. As a result, critics see a framework that may do little to rival Delaware incorporation.
Parliamentary debate now threatens further dilution as some lawmakers push to protect national systems. Englesson states the current EU Inc form may not attract enough founders. MEP Eva Maydell counters that a more ambitious version could still become a major integration project, provided policymakers offer something genuinely more compelling than US options.
