According to EU-Startups, Jillian Manus, Managing Partner of Structure Capital and US Venture Advisor for the European Innovation Council, revealed that European innovators are being pushed to scale abroad due to a severe lack of late-stage capital in Europe, taking jobs, intellectual property, and revenue with them. Speaking at the Ventures.eu Forum 2025 under the EU-funded Innovation Radar Bridge project, Manus highlighted that US VCs invest 7x more and 100x faster than European counterparts despite comparable startup pipelines. She identified Europe’s €15 trillion in pension funds as the solution, noting that allocating just 2%—€300 billion—to venture capital would transform the continent’s innovation landscape, with Ireland, Italy, and Luxembourg already introducing supportive policies. This stark contrast between European potential and American execution reveals a systemic funding crisis demanding immediate attention.
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The Capital Mismatch Crisis
The European innovation ecosystem faces what I’ve observed across multiple markets: a classic capital maturity mismatch. Europe excels at early-stage innovation but systematically fails at scaling. This isn’t about lack of ideas or talent—it’s about structural financial architecture. The €15 trillion pension fund figure represents more than just untapped capital; it symbolizes a deeply conservative investment culture that prioritizes risk mitigation over value creation. In my analysis of global innovation hubs, this pattern consistently predicts which regions become innovation exporters versus innovation leaders. The fact that US VCs deploy capital 100x faster isn’t just about efficiency—it’s about fundamentally different risk appetites and decision-making frameworks that European institutions must adopt or risk permanent second-tier status.
Pension Fund Dynamics: Beyond the Numbers
The pension fund gap between Europe and the US represents more than just investment preferences—it’s rooted in fundamentally different approaches to long-term wealth creation. US public pension funds have achieved 13.5-15.2% annualized returns from private equity because they understand that venture capital, while higher risk, provides essential portfolio diversification and inflation protection. European pension funds, by contrast, often operate under regulatory frameworks and cultural norms that prioritize capital preservation over growth. This creates a vicious cycle: without successful venture exits, pension funds see no proof of concept; without pension fund participation, startups lack the capital to achieve those exits. Breaking this cycle requires more than policy changes—it demands a fundamental rethinking of fiduciary responsibility in an innovation-driven economy.
Strategic Implications for European Competitiveness
The innovation exodus Manus describes—where European startups scale abroad, taking jobs and IP with them—represents a critical threat to European economic sovereignty. In my assessment of global tech ecosystems, regions that cannot retain their scaling companies inevitably become innovation feeders to dominant hubs like Silicon Valley. The sectors Manus identifies—AI, biotech, climate tech, and defense—are precisely those where Europe has significant competitive advantages but risks losing them to better-funded American competitors. The defense technology angle is particularly strategic: as more US investors look to Europe through this entry point, it creates both opportunity and dependency. European policymakers must recognize that innovation retention isn’t just about economic growth—it’s about maintaining technological independence in critical sectors.
The Cultural Transformation Required
Beyond the financial mechanics lies what I consider the core challenge: cultural transformation. Manus’s observation that European investors “first risk mitigate a company rather than to build it up” points to a fundamental mindset difference. In my work with global venture ecosystems, I’ve seen that successful innovation hubs balance prudent risk management with ambitious growth orientation. The European Green Deal and related regulations provide helpful frameworks, but they cannot overcome cultural resistance to venture-style risk-taking. The proposed forum connecting US and EU pension leaders could be transformative, but only if it focuses on changing decision-making frameworks, not just sharing metrics. European institutions need to develop their own version of venture capital that respects their regulatory environment while embracing the growth mindset that drives innovation scaling.
The Path Forward: Integrated Solutions
The solution requires coordinated action across multiple fronts. First, European pension funds need education about the long-term performance characteristics of venture capital—not as speculative gambling but as strategic portfolio diversification. Second, policymakers must create regulatory environments that encourage rather than discourage pension fund participation in venture capital. Third, European venture funds need to develop scaling expertise that matches their early-stage capabilities. Finally, there must be deliberate effort to create success stories—European companies that scale successfully within Europe—to demonstrate the viability of the model. The €300 billion opportunity represents more than capital; it represents the potential to build a self-sustaining European innovation ecosystem that can compete globally without sacrificing local economic benefits.
