EU Venture Capital Market Lags Behind US Counterpart by Sixfold
According to a recent publication by the European Central Bank (ECB), the US venture capital market has a significant advantage over its EU counterpart. With approximately €930 billion in total size, US-based venture capital funds have around six times more money to invest than their European competitors.
The ECB notes that while the size of US venture capital funds is substantial, the challenge facing European venture capital goes beyond this overall figure. The EU's venture capital market is less equipped to finance companies in later stages of growth, when financing needs increase significantly.
One factor contributing to the smaller size of venture capital funds in the EU is the composition of their investor base. In contrast to the US, where pension funds are a significant source of investment, European funds rely more heavily on state entities and investors.