[alephnerd]

To reach the "Microsoft or Nvidia" lead round phase, you need an ecosystem of angel, seed, and early stage investors. This doesn't exist in much of mainland Europe, as that entire ecosystem has been in London for decades, and the entrepreneurship space is fundamentally power law driven.

[goethes_kind]

What exactly is causing the fiction? Is it that there are some laws that make cross-border funding a challenge? Or is it simply that it is hard to network and gain the confidence of VCs if you don't live close to where they operate from?

[alephnerd]

> What exactly is causing the fiction

It's truth, not fiction.

Here are dealflow statistics by country [0]

There isn't enough dealflow in much of the EU, leading to a major issues as a founder where you don't have access to operators to give funding, advice, and open doors. This means you have to move, but this also means local champions don't develop who will fund local entrepreneurs.

It's a chicken and egg situation, as there aren't that many unicorns within mainland Europe (CH and DK for biotech, and SW excluded) meaning there isn't as much capital flowing around or experienced people who can found companies.

Edit: realized you meant friction

> is it simply that it is hard to network and gain the confidence of VCs if you don't live close to where they operate from

Pretty much this.

[0] - https://dealroom.co/guides/global

[mamonster]

I think the person you are responding to meant friction instead of fiction?

The main problem IMO is that EU is still not really a single market and so a lot of the business models don't transfer as expected(an EU fintech entering DACH from like France or Denmark is like a massive step up in difficulty because the mentality is completely different).