Europe's Talent Dilemma: Why Startups Leave and How to Make Them Stay

Jan de Vries · 2026-10-15

Europe is a fantastic place to live. Great quality of life, solid job opportunities, and stability. But attracting people to enjoy the lifestyle is one thing. Attracting talent and companies to build here? That's a whole different ballgame. When companies bring teams, hire locally, and set up R&D, they create an entrepreneurial ecosystem that benefits everyone. Europe isn't doing so well in this area, especially compared to the US. Here's a telling trend: about 10% of EU scale-ups relocate abroad, with around 85% heading to the United States. And between 2008 and 2021, nearly 30% of unicorns moved their headquarters abroad, again mostly to the US. But recently, something interesting happened. Langdock, a Berlin-based AI startup, moved its parent company from the US to Germany. Their goal? To become a "European hyperscaler." This shows that the trend of startups fleeing to the US isn't set in stone. Europe can attract and retain its talent. So, why do startups choose the US over Europe? And what can Europe do to change the narrative? Let's dig in. ### The US vs. Europe: Where Do Startups Go? To understand where Europe can improve, we need to look at its main competitor: the US. The US captures 85% of startups worldwide. If a US VC is involved, chances are the startup will relocate there. In fact, many US venture funds require a Delaware parent company—a US-based legal entity that owns and controls the startup's operations, including those in Europe—before they'll invest. Then there's the single market advantage. The US is one big market, while Europe has 27 member states. Buyers spread across European jurisdictions take longer to close than buyers spread across US states under one framework. This forces European startups to cross borders earlier than their US counterparts. The EU Inc Framework is working to address this, but it's still a challenge. Still, 97% of moves are partial exits, with companies keeping operations in their home country. And only about three-quarters of relocating CEOs actually move to the new destination. The capital gap is another big factor. There's a perception that the US is more forgiving of failure and has a bigger appetite for risk. The reality? There's simply more capital to go around. In 2021, US VC investment was about $930 billion, compared to $150 billion in the EU—roughly six times more. European investors are understandably more cautious. ### The Langdock Story: A Different Path So how did Langdock buck the trend? Their move was commercial. Customers' legal teams kept flagging the US parent company as a data-risk exposure, even though it had no staff, servers, or systems access. The US Cloud Act was a major concern. 80% of the company was owned by founders and employees living in the EU. The teams, along with about 13,000 client organizations, were being served from Germany. In short, everything was already based in Europe. The parent company was created to attract US investors and benefit from Y Combinator. But as the business grew, the US parent became a liability. ### What Europe Should Do Instead Europe has been a magnet for talent to study, train, and build. But retaining that talent has been less successful. The focus has mostly been on easing restrictions to bring talent in, like special visa schemes. Germany issued 72% of the EU's Blue Cards in 2024, which fast-tracks skilled workers. France's Tech Visa program is another example. But bringing talent in is only half the battle. Keeping them and their companies is the real challenge. Europe needs to create a more unified market, reduce bureaucratic hurdles, and increase access to capital. The EU Inc Framework is a step in the right direction, but more needs to be done. As Langdock's story shows, it's possible. With the right conditions, Europe can attract and retain the companies that will build its future.