Financing the startup J-curve - what changes when American money backs a European company
High-growth startups lose money before they make it, and whether a company can hold that curve depends less on the idea than on how deep the pocket behind it goes. Three economists tested this on Sweden, where US and non-US investors operate under identical rules.
- 137 US venture funds above $1 billion between 2013 and 2023, against 11 in the EU and ten in the UK - the gap is the mechanism, not the symptom
- same country, same regulations: Swedish startups backed by US VCs run deeper operating losses, draw more follow-on capital and post higher sales later
- 134% more new investors join after the first round when the lead investor is American, and that is the part which compounds
The practical read for a European founder is that the handicap sits in depth of capital rather than in quality of ideas; the authors apply the same test to the Scaleup Europe Fund, asking whether it pulls private money in behind it rather than whether it manages to deploy its own.
https://cepr.org/voxeu/columns/financing-startup-j-curve
📎 Read also:
→ Antler mapped what happens between Seed and Series A in Europe
→ €9 trillion left on the table by Europe's research institutions
→ $300B in Q1 2026 VC - four companies took 65% of it
High-growth startups lose money before they make it, and whether a company can hold that curve depends less on the idea than on how deep the pocket behind it goes. Three economists tested this on Sweden, where US and non-US investors operate under identical rules.
- 137 US venture funds above $1 billion between 2013 and 2023, against 11 in the EU and ten in the UK - the gap is the mechanism, not the symptom
- same country, same regulations: Swedish startups backed by US VCs run deeper operating losses, draw more follow-on capital and post higher sales later
- 134% more new investors join after the first round when the lead investor is American, and that is the part which compounds
The practical read for a European founder is that the handicap sits in depth of capital rather than in quality of ideas; the authors apply the same test to the Scaleup Europe Fund, asking whether it pulls private money in behind it rather than whether it manages to deploy its own.
https://cepr.org/voxeu/columns/financing-startup-j-curve
📎 Read also:
→ Antler mapped what happens between Seed and Series A in Europe
→ €9 trillion left on the table by Europe's research institutions
→ $300B in Q1 2026 VC - four companies took 65% of it