Building Europe’s venture ecosystem: patience, people and long-term capital

Europe does not suffer from a lack of entrepreneurial talent or technological innovation. Instead, its challenge lies in building a sufficiently deep, patient and educated venture capital (VC) investor base capable of supporting high growth companies over the long time horizons the asset class requires.

London-based banking group Revolut, German defence startup Helsing and French AI unicorn Mistral are all high on the list. So, too, is the Finnish wearable technology specialist Oura. They follow in the footsteps of European pioneers that have long since made it onto the public markets. Examples include Sweden’s Spotify and Klarna and Romanian agentic AI developer UI Path.

You read that right. UI Path was founded in Bucharest. Europe, as the examples above attest, benefits from what Oscar Farres, Head of the Technology VC Unit at the European Investment Fund called a “distributed ecosystem”.

Giving a keynote presentation at the 17th Private Capital Symposium, Oscar explained that in Europe, innovation can be found – and funded – across the continent, rather than concentrated in a single hub. “We are at a stage now where every good startup in Europe will get finance,” he said.

Yet Europe is still far behind the U.S. in terms of both the capital available for investment in venture capital and the number of investors actively committed to the asset class. The EIF, backed by the European Commission and the European Union’s 27 member states, plays a central role as a public early-stage investor. EIF has backed more than 1,600 funds across venture and growth, deploying around €3bn a year across all stages and geographies in the EU, giving it a unique view of the European venture ecosystem. However, Europe has relatively few other limited partners (LPs) with sustained venture exposure.

Oscar highlighted that about 85% of LPs in Europe have invested in fewer than three venture funds. Many will have invested as a one-off, picked a fund with too narrowly focused a portfolio or gone into the asset class in the heady post-Covid period, only to find that they were not getting the expected returns. Not all were set up for the longer hold periods required. The median timeline for a venture fund from inception to termination, he said, was closer to 15 years than the theoretical 10- to 12-year life of a VC fund.

Returns for the European VC asset class are increasingly comparable to those in the USA and there is a clear advantage to investing in Europe: valuations are more reasonable than in Silicon Valley. The challenge is not performance, but patience.

These issues were picked up by the panel discussion that followed, moderated by Luisa Alemany, Associate Professor of Management and Academic Director of the Institute of Entrepreneurship and Private Capital (IEPC). The panel focused on how to strengthen Europe’s venture ecosystem “to succeed in challenging times.”

The panellists were Joe Schorge, founder and managing partner of VC fund-of-funds Isomer Capital; Antonia Whitecourt, COO of early-stage venture firm Seedcamp; and Anu Adebajo, CEO of the Newton Venture Program, a joint initiative between London Business School and top quartile European VC LocalGlobe. Newton Venture Program provides executive education for the next generation of leaders in the venture capital ecosystem. As Anu acknowledged, Luisa is one of the programme’s faculty and sits on the board.

The panel looked at venture investing across Europe, ways to encourage LPs’ investment in emerging managers, and the growing role of secondaries in providing liquidity to investors unable to wait a decade or more for returns. It also discussed providing training and education for the venture capital industry. It said LPs needed to become comfortable with investment in emerging managers, as these were often the most innovative investors, who would themselves be backing overlooked sectors, geographies, and founders working on the unicorns of the future. In fact, some of the data shared by Oscar Farres during the keynote showed that emerging managers outperformed more experienced VCs in several years over the last two decades.

Antonia shared that Seedcamp has backed more than 550 portfolio companies, with a combined enterprise value of over $100 billion, including 12 unicorns. Building such a vast portfolio required years of hard work, lots of meetings with entrepreneurs, developing local networks, and applying disciplined selection at the earliest stages. Seedcamp recently raised over $300 million across two new funds, enabling it to continue supporting European founders through their early days.

In part, Seedcamp’s fundraising success may be seen as a reflection of how LPs have been concentrating on their investments with established fund managers. While this allows proven firms to raise funds faster than ever, it has made fundraising significantly more challenging and time-consuming for emerging managers.

Isomer had three strategies: to invest in early-stage VC funds such as Seedcamp’s; to co-invest with them in their portfolio companies; and to come in as a secondaries investor, by buying out, and providing liquidity to investors, either their funds or their companies.

Joe said about 65% to 70% of Isomer’s capital is allocated to funds, while the remaining 30% to 35% was split between direct investments and secondaries. However, he emphasised that he does not compete with its underlying managers, only ever co-investing alongside them.

He said Isomer acts as a bridge between the small, often local, seed- or early-stage funds, and large institutional investors, who didn’t have the team to make small investments: “The way I sometimes think about it: If you’re a smaller institution, we scale you up. We give you firepower to access things you couldn’t. If you’re a big institution, we scale you down. You’re not going to run around East Berlin drinking beers and meeting all these exciting but tiny opportunities. But we do that. We’ve met 2000 firms to invest in 50 of them. It’s a crazy amount of legwork.”

When asked about deep tech investing, Joe said that venture capital is a very fashionable industry, and that investors need to disconnect hype, fashion and buzzwords from the underlying economic reality, focusing on defensible technology, customer demand and long-term revenue potential. While deep tech investments often require greater patience, Schorge noted that they can offer stronger defensibility through intellectual property and durable contracts.

The post‑Covid period has also accelerated Europe’s focus on deep tech. As Oscar noted, vulnerabilities exposed during the pandemic — from semiconductors to critical supply chains — helped align public and private priorities around strategic sectors such as space, defence and quantum technologies. While both specialist and generalist VC funds have increased their deep‑tech exposure, Oscar emphasised that these investments require deep pockets and long time horizons to build global category leaders from Europe.

Talent mobility emerged as a critical enabler of Europe’s venture ecosystem. Panellists stressed that governments play a central role through visa and immigration regimes, with slow and costly processes increasingly acting as a constraint on hiring specialised talent. Venture firms themselves also act as practical enablers, using networks and experience to help founders recruit across borders.

Antonia Whitecourt argued that attracting and retaining entrepreneurial talent is as much about perception as policy.

“We don’t shout loud enough. We’re not aggressive enough. Founders need to feel welcome. They need to feel wanted,” she said, arguing that Europe must do more to signal openness to founders.

Beyond visas, she pointed to fragmented regulation across European markets as a deterrent, noting that differences in legal and administrative systems can slow company formation and discourage investment. Addressing these barriers, she argued, is less about public spending and more about harmonisation, speed and mindset.

Anu Adebajo said her focus is on surfacing investors and founders from unexpected and often overlooked places, noting that resilience and capability often develop where resources are scarce.

The panel concluded that strengthening Europe’s venture ecosystem will require more than capital alone. Deep networks, sustained legwork and long‑term relationship‑building remain critical in a region where innovation is geographically distributed rather than concentrated in a single hub. Alongside better LP education, improved talent mobility and greater participation from long‑term institutional investors, speakers argued that Europe’s competitive advantage lies in its ability to connect overlooked founders with patient capital through trusted local networks.