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Tax and regulatory frameworks that let EU pension funds allocate a small, prudent share to European venture and growth capital, to help close the structural funding gap with the US.
Europe does not lack savings. It lacks a mechanism that turns those savings into growth capital for its own companies. European pension funds manage trillions of euros, yet allocate only a fraction of what their US counterparts commit to venture and growth-stage investment. The result is predictable: European scale-ups raise their largest rounds from American funds, and the returns, board seats and eventual listings follow the money out.
The fix is not exotic. It is a set of tax and regulatory frameworks that let EU pension funds allocate a small, prudent share of assets to European venture and growth capital. Denmark and Sweden already show what institutional participation can look like; the playbook needs to work across all member states, not just the frontrunners.
The prize is a structural one. If European institutions funded even a modestly larger share of European growth rounds, the continent's best companies could scale without changing flags. That is the difference between an innovation economy and an innovation export business.
The data behind this insight
Policy recommendations from the S9+ coalition, the startup organisations of Europe's digital frontrunner (D9+) countries, driven by Danish Entrepreneurs.
More insights
The €800 Billion Question – Why Europe saves enough, but invests too little.
Europe is not short of capital. Across the continent, households save large parts of their income, pension funds manage vast pools of long-term wealth, and institutional investors control resources that should be capable of financing a new generation of European companies. Yet when those companies begin to grow, many still struggle to find the capital they need at home.
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Incentives for scaling companies to stay headquartered in Europe, through stock-option reform, preferential tax treatment and public-procurement access, modelled on Nordic success.
A single EU venture passport
Harmonise venture-capital rules across member states with a single licensing framework, so cross-border capital can flow to European startups without 27 separate rulebooks.