Built here, scaled elsewhere.

None of the routes we heard about involved a company giving up. Each involved a company that kept building, and found the money, the buyer or the market somewhere else.

Four routes came up again and again. They have one thing in common: the science and the intellectual property were built here, and the growth happened elsewhere.

Medical devices cannot be sold without certification, and in Europe certification runs country by country. A medtech investor, speaking for two VCs, described the trap. At least 15 of their portfolio companies were affected and at least six months were lost, in a year when they made about 60 deals and invested around €130M.

A dental AI company made it concrete. It raised €3.5M against €133M for a comparable US rival, 38 times less, while its cash drained waiting for certification. The rival is now set to enter Europe, a market the company puts at about €3B at scale. The founder supplied the figures; public information on the rival matches.

Large customers feel it too. A large pharmaceutical company told us some new SME vendors were turned down because they could not show they could scale at the speed and capital required, with certification adding to the gap. A life-sciences investor said he cannot fund companies through clinical validation, because the risk carries no reward. At least five companies have left the EU, in his experience.

Grants are meant to carry a young company through its riskiest years. We heard from a funding-programme observer with feedback from at least 120 SMEs since 2022. An application takes three to four months. A decision takes another three to four. Refusals come with no useful feedback.

Winning is not the end of the wait. In about 30% of awarded grants, the money arrived up to six months later still. From application to cash, that is up to 12 to 14 months. For a company burning cash, that is the difference between a grant and a lifeline that comes too late.

The design matters as much as the timing. Several founders said grants reward a research project more than a commercial business, and change the founder's mindset. A hardware founder in Germany said national grants are spread across regions instead of awarded on merit, costing business and talent. A university venture builder, supporting about four start-ups a week, said grant rules can stop a company building with its own money until the grant arrives.

Three companies, in space and precision engineering, biotech and chip raw materials, told us they have ten key positions open between them. The space company also struggles to source raw materials locally.

The companies said they look first to Europe for this talent, and Europe is rich in it. Yet it grows scarce here, absorbed by opportunities elsewhere. A US investor at a different lab agreed.

A fabless chip company described the squeeze: big companies absorb scarce skills, so scale-ups turn to India and outsource roles. The jobs a European scale-up would have created are created elsewhere.

Behind talent sits reward. A frontier-tech advisor said founders, investors and government all take less risk on frontier industries in Europe. A space founder who built and sold a company in the US, then returned to build satellites, said the EU lacks rewards proportional to investor risk. By his estimate, the sector could add €6 to 8B in revenue and his company could build 200 satellites a year.