We’ve all heard the rhetoric: Europe is good at founding companies and bad at keeping them. A Boardwave panel of a former minister, a stock-exchange insider, an early-stage investor and an economist thrashed out why, and disagreed on the cure.

Amy Wilson Wyles

Europe now produces start-ups and scale-ups in real volume. What it still struggles to do is hold on to its most ambitious companies (their capital, their leadership and eventually their listings) as they grow. The United States continues to offer an attractive place to scale: deeper pools of late-stage capital, stronger analyst coverage, a larger home market and a more credible route to the public markets.

To pick that problem apart, Boardwave convened four people who see it from very different vantage points. Lucy Frazer, former UK Cabinet Minister and now an advisory board member at Quantexa, brought nearly a decade of experience inside government, much of it in the Treasury. Leo Ringer, founding partner at Form Ventures, invests at the earliest stages in regulated markets and spent his first career in and around policy, including as an adviser during the coalition government. Neil Shah heads the technology practice in primary markets at the London Stock Exchange, after a career selling European companies "to the highest bidder." And Cristina Caffarra, co-founder and chair of the EuroStack Initiative, spent fifteen years on the biggest antitrust cases in the world before concluding they were largely a waste of time, then switching her energy to building European tech instead.

The result was a brilliant and lively debate about how Europe can continue to flourish and how we can change the story moving forwards.

"Are we sure it's a bad thing?"

Leo Ringer opened by questioning the premise. The anxiety about losing "crown jewels" (Pfizer's attempted swoop on AstraZeneca, SoftBank buying Arm) sits awkwardly, he argued, next to the enormous government effort that goes into attracting foreign capital in the first place. Britain treats inbound investment as a scoreboard: foreign direct investment (FDI) up is good, down is bad. Yet FDI, by definition, means foreign ownership. "Those two things cut against one another," he said. You cannot simultaneously court global capital and lament it when it arrives.

The narrower, fairer worry, he suggested, is why Europe can't grow homegrown champions and keep the value here. Part of the answer is cultural: domestic capital, especially pension money, is less risk-tolerant than it could be. Part is simply arithmetic. The US economy is roughly seven times the size of the UK's, so comparing capital flows will always flatter the Americans. And part is aspiration. For many British founders, taking US money still feels like a marker of success, a sign of having gone global.

Four reasons, from inside the Treasury

Lucy Frazer offered a structured account of why good companies stall on the way up, a problem she stressed is European as much as British.

First, the availability of capital: pension funds remain risk-averse (something the Mansion House reforms are trying to shift), and retail participation in equities is far lower in the UK and Europe than in the US. Second, reinvestment: even when capital is available, companies here plough less of it back into R&D than competitors do, one reason the last government introduced full expensing. Third, regulation: Europe regulates to protect consumers, she argued, where the US regulates to drive profit and win the race against China. And fourth, culture.

On that last point she relayed a line from a Silicon Valley trip Boardwave organised. A partner at the US law firm Wilson Sonsini told the group that in Britain, founders ask, "How can you help me sell my company?" In America, they ask, "How can you help me grow?"

The money is already here

Neil Shah took that as a cue rather than a criticism. The UK is not short of capital, he insisted: it is the second-largest pool in the world. He reeled off the numbers: roughly £300bn sitting in pensions, another £300bn in insurance capital, and something like £800bn in under-used cash balances, including cash ISAs. The problem is deployment, and, yes, ambition.

He pointed to signs of change. Europe has just produced its largest-ever seed round in Paris-based AMI Labs; London's Nscale raised the largest Series B in European history and followed it with an even bigger Series C. Oxford Quantum Circuits, he noted, recently took a nine-figure cheque backed by the British Business Bank, whose Business Growth Partnership is crowding pension money into growth companies; welcome, but at £200m still an order of magnitude smaller than it needs to be.

His message to founders was blunt: "Use these markets or lose them." Ninety per cent of his job, he said, is educating founders who assume they must either sell early or attempt an implausible US listing on modest revenue. He pointed to Darktrace, Raspberry Pi and Baltic Classifieds as companies that scaled on public markets at home, and to PISCES (the exchange's new venue for trading private-company shares) as part of the answer.

He was passionate on procurement: when the British state buys software, he asked, why does it default to the best-known US names when there may be a better homegrown product built by someone in the room? At the LSEG tech leaders' summit, half the founders on show last year were British; the point is to get them in front of the CTOs and CISOs who might actually buy from them. "If we can be as good a customer as we are funders and regulators," he said, Europe would be in far better shape.

"Stop admiring the problem"

Cristina Caffarra, dialling in with characteristic candour from an airport baggage hall, refused to accept any of it as destiny. "All we do is admire the problem," she said. The reasons are well known and have been recited for decades: no deep enough capital market, no deep enough single market, not enough risk appetite. She rejects the idea that something is missing from Europe's DNA. Europe got here, she argued, because it allowed itself to be replaced in its own continent: tech above all, where 80 to 90 per cent of the digital infrastructure is now owned by non-Europeans. "It snuck up on us while we were asleep, doing regulation theatre," she said, meaning the years spent regulating Google search or the app stores in the magical belief it would somehow conjure a European cloud.

Sovereignty, she was at pains to say, is not autarky or protectionism. It is about agency: systemic control over the layers of the digital stack that determine Europe's economic and geopolitical future. And the money to build it exists. Europeans sit on vast household savings, she said, yet export an estimated €300bn a year to fund US venture and innovation, making it"the only continent that sends its money somewhere else." Encouragingly, she sees a growing appetite among European family offices and pension funds to back European tech: sovereignty, as one recent piece put it, may not be fully achievable, but it is a good investment.

Her real fire was reserved for the idea that governments will fix this. "Forget it," she said. Look at the European Commission's sovereignty package: two years of work, a modest ask that perhaps 20 to 30 per cent of public procurement be directed to European suppliers, and it was gutted under lobbying until the language read "encourage, favour, promote." She recounted the spectacle of Europe's six largest companies (Siemens, Nokia, Ericsson, Bosch, ASML and others) dining with the Commission president and posing for a group photo, then issuing a press release boasting of their combined revenue and market cap. Europeans, she argued, have been "infantilised" into looking up to institutions as a parent ("please, what will you do for me?") when the answer is to take agency and build. Governments can supply mood music. The lever is private demand buying European tech, and private capital funding it.

Can the UK do it alone, or with Europe?

Here the panel's central tension surfaced. Caffarra's lament was that the UK, for all its strength in tech, is "missing in action" in a European conversation that France and Germany are driving. As a third country to the EU, Frazer noted, British firms wanting to sell into a "sovereign circle" defined by EU rules risk being locked out, a real problem for UK tech.

Ringer framed Britain's post-Brexit position as the worst of both worlds: outside the single market economically, but never actually using the regulatory freedom that was supposed to be the upside. Areas where the UK could have carved out advantage (he cited novel proteins and cultivated meat) have been allowed to fold back. Get capital, regulation and ambition right, he argued, and you might even "make more sense of Brexit as a concept."

Where the promise lies

The optimism they all shared was about the ground now opening up. Where whole swathes of the economy have run on US-built software almost by default (Ringer pointed to the Met Police re-tendering its Palantir contract), sovereignty puts those markets back on the table for British and European firms to win. Much of that is business-to-government, which demands a level of assertiveness, and risk appetite, that Whitehall has historically lacked for fear of tripping over procurement frameworks or inviting judicial review. Frazer, from experience, described not even being allowed to talk to specific British suppliers lest they become "preferred."

The panellists saw movement: a new Regulatory Innovation Office, a proposed AI Growth Lab, and ministers (including AI minister Kanishka Narayan and the government's sovereign-AI push) pressing departments to buy British. Frazer's prescription for the state was threefold: agile legislation that regulates properly but gets out of the way; stability, because business craves certainty more than any particular rule; and foundations, such as cheap energy and sensible labour laws. She was clear-eyed that AI will force regulation to change across every vertical, from healthcare to financial services, and that the rules must be built to flex rather than freeze. The UK's instinct for an adaptable framework, she suggested, sits more sensibly between an over-regulating EU and a barely-regulating US. And nobody should pretend Europe can lead everywhere on the stack; the trick is to choose where (quantum being one candidate) and go hard.

Ambition, culture and the courage to celebrate success

The conversation kept returning to culture. Ringer cautioned against lazy talk of "ambition." Venture maths is brutal, and most early bets fail, so the winners must be enormous, but not every founder should feel obliged to take VC money and "shoot for the stars" to be worth backing. He described a first-time founder in his late twenties walking away with a life-changing sum after a company sold for £50m: who would begrudge that? The deeper fix is time and ecosystem maturity: repeat founders who have been de-risked by an earlier exit and can go again, which is precisely what the US has and Europe is still building.

Shah tied it to the environment: Britain debates moving Parliament to Manchester or aligning capital gains with income tax while dodging the bigger questions of tax, talent retention and whether founders feel able to stay. His CEO, Dame Julia Hoggett, chairs the Capital Markets Industry Taskforce around exactly this mission, making the UK the best place to "start, grow, scale and stay." Frazer added a very British coda: our reluctance to celebrate either success or failure. She recalled a founder who sold his company for eight figures with no outside investment and kept his Rolex in a drawer out of embarrassment, and the years she stood near Rishi Sunak at Treasury questions as he was attacked for personal success. In the US, she noted, you are not taken seriously until you have a string of failures behind you. Europe hides both.

The argument that remains

Everyone in the room agreed the diagnosis is decades old and thoroughly rehearsed. The disagreement (the reason the session was so interesting) was about the remedy. One camp sees a role for enlightened government: agile rules, stability, bolder public procurement, patient state-backed capital. The other, personified by Caffarra, sees institutions as a distraction at best and captured at worst, and puts its faith entirely in private capital and private demand.

What they shared though was impatience. As Boardwave's own mission suggests, shifting the culture of European tech through peer-to-peer support and greater collective ambition, the point of the debate is to stop admiring the problem and start acting on it. Whoever is in government across the UK and Europe, this question is not going away.

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