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Business|Hoping to Grow in Europe, but Bogged Down by Red Tape
https://www.nytimes.com/2025/10/23/business/europe-start-ups-red-tape-entrepreneurship.html
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Entrepreneurs in the European Union who want to expand their business across borders keep hitting the same hurdle. Red tape.
More start-ups have formed across Europe in recent years, fueled by world-class research hubs in Britain, booming tech sectors in France and Germany, a high venture capital presence in Estonia and robust backing by pension funds in Sweden.
But cumbersome bureaucracy — covering everything from hiring requirements and environmental laws to financial regulation and fund-raising rules — can stifle companies wanting to grow.
Excessive paperwork threatens to hold Europe back from competing globally, according to an influential report released last year by Mario Draghi, a former president of the European Central Bank. The report also called for the creation of a single capital market, echoing the concerns of entrepreneurs, who feel the pain of excessive regulation more acutely than multinational companies.
Despite the challenges, there were 35,000 early-stage companies in the European Union and Britain in 2024, more than four times as many as a decade earlier, while investment ballooned tenfold to $426 billion, according to a report from the venture capital firm Atomico. Fund-raising rounds alone are now five times what they were a decade ago, bolstering private companies like the finance app Revolut and Mistral, an artificial intelligence company.
Yet European companies still struggle to expand, raising two-thirds as much funding relative to output as their American counterparts and achieving only half their success rate, according to the Atomico report.
