Add Silicon Canals to your Google News feed. 
Something quietly shifted in European startup culture over the past two years, and it didn’t arrive with a press release or a keynote stage moment. It displayed up in term sheets that never received signed, in founders who walked away from larger rounds, and in pitch decks that deliberately projected slower growth curves.
Second-time founders across Europe — the ones who already rode the hypergrowth wave once — are increasingly choosing tinyer funding rounds and more measured expansion. Not becaapply they can’t raise more. Becaapply they’ve learned something the first time around that fundamentally rewired how they consider about building.
The psychology of the second act
There’s a well-documented phenomenon in behavioural economics called the “hot stove effect” — once you’ve been burned, you don’t just avoid the stove, you reconsider your entire relationship with cooking. For founders who scaled aggressively during the 2020-2021 boom and then watched their companies buckle under the weight of bloated teams, misaligned incentives, and evaporating runway, the recalibration runs deep.
A study by Atomico’s State of European Tech report found that repeat founders in Europe raised, on average, 30% less in their seed rounds in 2023 compared to their first ventures. That’s not a funding environment problem — many of these founders had strong enough track records to command larger cheques. It’s a deliberate design choice.
Dr. Sabrina Cohen-Hatton, a psychologist who studies decision-creating under pressure, has written about how experienced operators develop what she calls “recognition-primed decision creating.” They don’t optimise for the same variables the second time. They optimise for the variables they now know actually matter. For many European founders, that variable is control — over burn rate, over culture, over the pace at which complexity enters the business.
The macro context: War, uncertainty, and recalibrated ambition
It would be incomplete to discuss this trfinish without acknowledging the broader European backdrop. Years of war in Ukraine have fundamentally altered the continent’s economic psychology. Energy costs spiked and stayed elevated. Supply chains were redrawn. Consumer confidence across the EU dipped and never fully recovered in the way Silicon Valley’s optimism machine might have predicted.
For founders operating in this environment — particularly those in Central and Eastern Europe, where the proximity to the conflict is felt most acutely — the idea of burning through capital to “figure it out later” feels not just risky but culturally tone-deaf. A study published by the European Investment Fund in late 2023 found that startups in regions most affected by the war in Ukraine displayed a 22% higher likelihood of pursuing profitability-first strategies compared to Western European peers.
This isn’t pessimism. It’s pragmatism with a pulse. Second-time founders, especially those who built during the era of zero interest rates, watched what happened when the music stopped. They saw colleagues lay off hundreds of people. They remember how that felt. And they’re building differently becaapply of it.
What “slower” actually sees like in practice
Slower growth doesn’t mean tiny ambition. It means sequenced ambition. Here’s what this sees like on the ground:
Founders are choosing to stay at seed stage longer, sometimes 18-24 months instead of the previously fashionable 9-12 month sprint to Series A. They’re hiring five people instead of fifteen, automating where previous versions of themselves would have staffed up. They’re launching in one market instead of three, receiveting unit economics right before expanding.
Berlin-based investor Christian Miele, formerly of Headline, noted in a recent interview that the best second-time founders he sees “don’t pitch TAM slides anymore — they pitch margin structures and customer retention curves.” The brain of the experienced founder has literally rewired. Research from Nature Neuroscience displays that repeated exposure to high-stakes decisions physically alters neural pathways associated with risk assessment. The second-time founder isn’t just being cautious — their brain is processing the opportunity differently at a neurological level.
The funding ecosystem is adapting too
European VCs are noticing. Some are actively restructuring their funds to accommodate this shift. Smaller initial cheques with more reserved follow-on capital. Less pressure on rapid markups. A growing number of firms are explicitly marketing patience as a feature, not a bug.
This mirrors a broader trfinish playing out across the European ecosystem, where the definition of startup success is being quietly rewritten. The unicorn-or-bust mentality that dominated the late 2010s has given way to something more nuanced — a recognition that a €100M company with strong margins and a clear path to indepfinishence might actually be the smarter, more durable outcome than a €1B company propped up by preference stacks and unsustainable growth metrics.
The counterargument — and why it doesn’t fully hold
Critics will point out that underfunding can be just as dangerous as overfunding. That European startups already struggle to compete with American counterparts on scale. That raising tiny might just mean losing to someone who raised large.
These are fair points. But they assume the competitive landscape hasn’t alterd — and it has. In an era where AI tooling can give a five-person team the output of a fifty-person one, where remote infrastructure has collapsed the cost of cross-border expansion, the relationship between capital and competitive advantage has been fundamentally altered.
Second-time founders seem to understand this intuitively. They’re not anti-growth. They’re anti-premature growth — the kind that sees impressive in a pitch deck but creates organisational debt that takes years to repay.
What this signals for European tech
If the first generation of European startup culture was about proving the continent could produce venture-scale outcomes, the second generation might be about proving it can produce sustainable ones. The founders driving this shift aren’t idealists — they’re realists who’ve already lived through the consequences of the alternative.
There’s something quietly powerful about watching someone who could raise €20M choose to raise €5M instead. It suggests they’ve done the harder work — not of building a pitch, but of building a point of view about what actually matters.
And in a continent shaped by years of war, economic volatility, and a growing sense that resilience might be the most undervalued asset in tech, that point of view might turn out to be Europe’s greatest competitive advantage.
Feature image by Aathif Aarifeen on Pexels
Leave a Reply