The Great Relocation Myth: Why Global Scale Doesn’t Require a US Passport
There is a persistent, damaging narrative circulating in European venture capital circles: the idea that a startup must relocate to the United States and re-incorporate as a Delaware C-Corp to achieve global status. This has become an industry-standard ultimatum delivered by US investors to early-stage European founders. The claim is that European foundations are fundamentally incapable of supporting world-class, billion-dollar companies.
However, this narrative is less a reflection of objective market reality and more an effective marketing campaign that keeps European talent and value creation flowing toward US-based venture ecosystems.
The Structural Fiction
The argument that US funds cannot or will not invest in European entities is factually incorrect. Top-tier American venture firms frequently lead rounds in companies headquartered in Berlin, Helsinki, Paris, or London. The structural barriers cited by proponents of the move-to-the-US model are often overstated or entirely manufactured to facilitate easier exit mechanics or operational oversight for investors.
When founders are coerced into relocation, they are not just moving an office; they are uprooting their lives and abandoning the core advantages of the European ecosystem. According to the State of European Tech 2025 report, 85% of founders prefer to remain in Europe. This preference is not mere sentimentality; it is a strategic decision leveraged by proximity to elite engineering talent, world-class research universities, and a superior quality of life that has become a premier asset in global talent acquisition.
Evidence of Execution Over Geography
The success stories of the past decade dismantle the necessity of US incorporation. Consider the trajectories of companies like Wolt, which scaled from a high-cost environment with disciplined capital efficiency, or deep-tech leaders like IQM, Iceye, and Helsing. These businesses have secured hundreds of millions in funding—including from major international funds—without conceding their European origins.
Their success proves that global destiny is a product of execution, not latitude. When a founder is told they must abandon their home market to succeed, they are effectively being warned away from a environment where they hold a competitive, cultural, and talent-acquisition advantage.
The Real Hurdle: The Growth Capital Gap
It is important to distinguish between company-building challenges and growth-scaling challenges. Europe does, in fact, suffer from a structural deficit in late-stage growth capital. We have a fertile ground for planting and early-stage nurturing, but we lack the domestic institutional depth—specifically from pension funds and large-scale insurance capital—capable of leading massive, nine-figure competitive rounds.
This is not an indictment of European innovation; it is a policy-induced bottleneck. The fix is not to export our startups to the US, but to implement the right fiscal incentives to unlock European private capital for mature, frontier-technology companies. Initiatives such as the €5bn Scaleup Europe Fund, backed by EQT, signal a shift in the right direction. By aligning domestic capital with home-grown winners, Europe can retain value capture that currently flows across the Atlantic.
Institutional Momentum and the Path Forward
Despite the aggressive narratives surrounding a hostile European climate, the data tells a story of resilience. The emergence of 27 new unicorns in 2025 and the growing appetite for European IPOs among companies like Pasqal and IQM indicate that the infrastructure for scaling is not only functional but maturing rapidly.
The EU Inc project and ongoing efforts to simplify digital regulation confirm that the legislative environment is becoming more, not less, conducive to growth. We are witnessing a clear divergence: while the infrastructure of the European tech scene is improving, the mythology surrounding its inadequacy is becoming more vociferous.
For the founder currently sitting across from a US investor, the advice is simple: demand nuance. Recognize that global scale is being achieved routinely from within the continent. Europe must continue to be hyper-critical of its genuine deficiencies—specifically the growth capital gap—but it must simultaneously stop allowing an incomplete, biased narrative to dictate the strategic destiny of its most ambitious companies. Relocation is an option, not a requirement.