Europe’s Deep Tech Paradox: World-Class Science, Invisible Companies
When I look at Europe, especially Central and Eastern Europe, I do not see a lack of talent. I see the opposite.
I see brilliant scientists.
I see university laboratories producing world-class research.
I see founders who are deeply committed to solving serious problems.
And yet, most of them never reach visibility. They never reach scale. They never reach exit.
At the same time, in Asia, I see capital. I see ambition. I see an appetite for growth and innovation.
But these two worlds often fail to meet.
This is not a funding problem alone. It is a structural problem. It is a cultural problem. And most importantly, it is a mindset problem.
In recent conversations with Károly Szántó and Thijmen Meijer from UniPrisma Venture Studio, we unpacked why only a small fraction of European university spin-offs ever become venture-fundable and what must change if we want to build globally competitive deep-tech companies from this region.
This is not theoretical for me. I have built a clinical research infrastructure from scratch. I have lost almost everything during COVID and rebuilt. I have worked inside big pharma, run my own CRO network, and now invest across Europe and Asia. I have seen both sides of the table.
The pattern is clear.
We are not short on science. We are short on translation.
The 22 Percent Problem
Recent statistics show that only around 22 percent of European university spin-offs receive venture capital funding. That number is even lower in Central and Eastern Europe.
If you think about that for a moment, it is staggering.
It means that nearly 80 percent of academic innovation never becomes investment-ready. Not because the science is weak, but because the system around it fails.
This is not just a lost opportunity for founders. It is a lost opportunity for society.
Europe produces extraordinary research. Our Nobel Prizes, our publication output, and our academic depth are world-class. But commercialization is not our strength.
In the United States, commercialization is embedded in the culture. In Asia, speed and execution discipline are deeply ingrained. In Europe, especially in our region, commercialization is often seen as secondary, sometimes even as morally questionable.
In certain academic circles, the ultimate KPI is still a publication in Nature, not a product in the hands of patients.
That cultural inheritance matters.
The Mindset Barrier
If you ask me what the biggest bottleneck is, it is not capital. It is a mindset.
Many researchers grow up in an academic ecosystem where incentives are defined by publications, citations, and grants. The language of markets, value creation, exit strategy, and return on investment is foreign and sometimes uncomfortable.
On the other side, I see founders who are highly motivated to commercialize but lack the competence or humility to acknowledge gaps in their skill set. They want to be CEO, CMO, CSO, and chairman at the same time. They do not want someone above them.
This is not a character flaw. It is often insecurity mixed with limited exposure to scaling organizations.
One of the most difficult conversations I regularly have with founders is this:
You are an outstanding scientist.
That does not automatically make you a strong CEO.
Changing roles is not stepping back. It is optimizing the team.
The most successful deep tech companies I have seen are those where the founder remains deeply involved in science, but an experienced business leader drives execution, fundraising, and commercialization.
This requires maturity. It also requires trust.
Investment Is Not the Root Cause
Many founders believe that if they simply had more funding, everything would be easier. I disagree.
The last two years have shown us that capital is not disappearing, but it is concentrating. Larger tickets go to fewer companies. Investors are more selective. They expect clarity, precision, and disciplined execution.
Money is not free anymore.
If your roadmap is vague, if your milestones are not clearly defined, if your North Star is not measurable in time and quality, no investor will compensate for that with blind optimism.
In my experience, most investment decisions are made within the first few minutes of a pitch. The formal due diligence that follows is important, but the initial decision is intuitive.
If your story is not concise, focused, and value-driven within the first three minutes, you will not get the next five.
This is not unfair. It is reality.
And here is another uncomfortable truth: too many startups celebrate funding as success. Headlines read, “We raised 3 million euros.” That is not success. That is fuel.
Success is impact. Success is ARR. Success is clinical proof of concept. Success is patients treated.
If investment becomes the news, the priorities are already distorted.
What Investors Actually Look For
From my decade sitting on the investor side, I can say this clearly: investors are not looking for perfect companies. They are looking for clarity.
When we evaluate a startup, we do not expect a flawless team. There is always a gap. That is normal.
What is unacceptable is not knowing where the gap is.
A structured due diligence process must examine:
Intellectual property ownership and structure
Clear milestone definitions
Team composition and personality dynamics
Measurable roadmap toward value inflection points
Realistic understanding of regulatory and clinical risks
In deep tech, especially biotech and medtech, founders are rarely natural salespeople. They are scientists. They are thinkers. They are problem solvers.
If an investor says, “I only invest if the founder can do sales,” they effectively eliminate most university spin-offs from consideration.
That is shortsighted.
The right approach is to build around the founder. Add the finance lead. Add the commercialization expert. Add the operational driver. Do not expect one person to be everything.
Europe, the US, and Asia: Different Strengths
Each region has a different strength.
The United States excels in commercialization. The narrative building, the confidence, the ability to think in billion-dollar markets from day one, is unmatched.
Asia, particularly certain markets, excels in work ethic and execution speed. Service levels, responsiveness, and discipline are on a different level.
Europe excels in creative scientific thinking. We approach problems differently. We often find unconventional angles.
The problem is that culture does not automatically transfer.
If you take a startup from Budapest and drop it into Boston or Seoul without preparation, it will struggle. The communication style, confidence level, and interaction pace are fundamentally different.
You cannot expect a team to absorb that overnight.
The solution is not to change an entire nation’s mindset. That is unrealistic. The solution is to build hybrid teams early. Bring in entrepreneurs in residence. Bring in internationally experienced operators. Merge cultures inside the company before you face the global market.
Infrastructure and the Lab Space Illusion
There is a strong correlation between lab space availability and biotech startup density. Where there are labs, there are startups.
In Central and Eastern Europe, access to high-quality infrastructure has historically been limited. I have seen universities wait years to purchase essential equipment. That delay alone can kill momentum.
Singapore took a different approach. The government built large-scale laboratory facilities and made them accessible to startups at favorable conditions. That accelerates early-stage innovation dramatically.
But infrastructure alone is not the solution.
I made the mistake of investing heavily in infrastructure once. During COVID, when governments took control of hospitals, I lost nearly everything within days. That was an expensive lesson.
Ownership is not always a strength. Flexibility is.
Today, I prefer partnership models over heavy fixed-asset models. In venture building and in clinical research, capital efficiency matters.
From Conservative Capital to Execution Driven Models
The traditional investment model in biotech is often too conservative and too fragmented. Investors write checks. Founders execute. Service providers operate independently.
This separation creates friction.
What we need instead is an integrated model that combines:
Clinical validation
Strategic oversight
Capital
Operational execution
At PMK Group and through collaboration with venture studios like UniPrisma, the goal is not to provide money first. The goal is to provide structure, clarity, and de-risked pathways.
In clinical development, failure rates are high. Many trials fail due to poor design, unsuitable patient selection, or operational weaknesses. Capital alone does not fix that.
Execution does.
If we can reduce technical risk through proper clinical design and operational excellence, we do not only protect patients. We also protect investors.
That is risk-adjusted growth.
The Human Dimension
There is another dimension that is often forgotten.
Some founders have had negative experiences with investors who added no value. They learned to speak only about IRR and exit multiples because that was the only language they were allowed to use.
That miseducation damages the ecosystem.
In healthcare, especially in CNS, oncology, and serious diseases, life is too short to work on things that do not matter.
Yes, we want returns. We are not a charity. But returns should come from real value creation.
If a founder talks only about ticket size and not about partnership, I already know it is not a fit.
If an investor talks only about IRR and not about clinical execution, it is also not a fit.
What Must Change
If Europe wants to close the visibility and exit gap, especially in Central and Eastern Europe, we must act on multiple levels:
Shift academic incentives to include commercialization without diluting scientific excellence.
Introduce structured venture building support early, not after Series A.
Normalize role evolution for founders, from CEO to CSO or CMO when appropriate.
Build cross-cultural leadership teams before international expansion.
Define milestones with surgical precision to avoid later conflicts.
Focus on impact as the primary narrative, not funding rounds.
We cannot help everyone. But if we select 20 or 30 companies and support them properly, we can create visible case studies. Success creates gravity.
The Opportunity
Despite the challenges, I am optimistic.
Central and Eastern Europe has extraordinary talent. Asia has capital and ambition. The United States has commercialization mastery.
If we are intelligent enough to combine these strengths rather than operate in silos, the outcome can be transformative.
The real question is not why startups struggle.
The real question is whether we are willing to redesign the system around them.
I have spent my career changing legislation, building clinical networks, investing in early-stage science, and rethinking models when old ones failed. I know from experience that systems can change.
But they do not change by accident.
They change when people stop waiting for permission and start building bridges.
That is the work ahead.
Dr. Peter M. Kovacs