Europe, despite excellent science, lost its co-equal status in drug development to the U.S. due to restrictive pricing and lack of growth capital. These same challenges are now emerging in the U.S., threatening its innovation leadership as China accelerates its efforts.

European pension funds invest just 0.02% in venture capital (vs. 2% in the US) because their core mission is capital preservation. Overcoming this requires more than just education; it needs structural solutions like EIB-backed fund-of-funds vehicles to simplify and de-risk VC exposure for these conservative institutions.

High-performing European biotech VCs struggle to attract institutional capital not because of poor returns, but because the diligence on small funds is inefficient for large pension funds. They prefer writing larger checks to bigger funds, creating a structural barrier for smaller, specialized VCs to get funded.

A key cultural difference in venture capital is that European VCs often request late-stage metrics like five-year financial projections from pre-seed companies. This contrasts sharply with the US/SF focus on market size, team, and vision at the earliest stages of a company's life.

A significant disconnect exists in biotech funding. Public markets show strong recovery with over $7B in follow-on financing this quarter, while private venture financing has dropped to its lowest point since 2017. This suggests a lag effect, where public investor confidence is returning faster than private capital deployment.

Beyond funding and regulatory hurdles, Europe's restrictive drug pricing environment is a fundamental threat. It discourages pharmaceutical companies, including Europe's own, from investing in the region as they prioritize the more profitable US market. This ultimately undermines the entire local R&D ecosystem.

Europe's decentralized biotech ecosystem offers a major operational advantage over hubs like Boston. Lower competition for talent, lab space, and clinical trial sites allows startups to operate at 50% of the cost, coupled with pre-money valuations that are often 40% lower, creating significant capital efficiency.

Unlike their US counterparts, European biotechs have less access to large venture funds. This forces a culture of extreme capital efficiency and discipline. This need to be "cleverer, smarter with less people and less money" is a defining feature and potential advantage of the European ecosystem.

The coalition's core mission is to prevent the exodus of successful biotechs to the US. By building a stronger capital market, they aim to keep champion companies like Argenx headquartered and operating in Europe, ensuring economic value, market capitalization, and tax revenues benefit the region, not the US.