Europe’s startups should stop chasing grants

2026-04-28 · Source: Sifted · Field: Business & Management — Entrepreneurship & Start-ups, Capital Markets & Investment Management, Economic Analysis & Policy · Depth: Intermediate, short

Summary

Ale Maiano argues that European science startups should prioritize private capital over early public grants to foster globally competitive companies. While acknowledging the critical role of science-based solutions and increasing VC interest in deeptech, Maiano contends that early reliance on grants distorts company formation by shifting focus from market validation to grant criteria. This leads to founders optimizing for eligibility and funding cycles rather than commercial bottlenecks, often resulting in delayed market entry and untested leadership. Furthermore, significant portions of grant funding can be absorbed by administrative overheads, and early public funding can concentrate risk on taxpayers by underwriting unproven ventures, as exemplified by Orbex. The article advocates for private capital first, which forces market validation, with public funding best utilized later to accelerate proven companies, citing Proxima Fusion as a successful model.

Key takeaway

For European deeptech entrepreneurs seeking to build globally competitive science companies, you should prioritize securing private capital before pursuing public grants. This approach forces early market validation and commercial focus, preventing the distortion of your product development towards grant eligibility criteria. Relying on private investment first will help you build a more robust, market-driven business, reserving public funding for accelerating proven technologies rather than validating initial concepts.

Key insights

Early reliance on public grants distorts startup development, prioritizing funding criteria over market validation.

Principles

• Private capital should precede public funding for startups.
• Market validation is paramount for startup viability.

Method

Startups should secure private capital first to validate technology and commercial potential, then seek public funding to accelerate proven companies, rather than using grants for initial validation.

In practice

• Prioritize customer/partner backing over grant applications.
• Seek private investment before public funding.

Topics

• European Startups
• Public Funding
• Grant Funding
• Venture Capital
• Science Companies

Best for: Entrepreneur, Investor, Policy Maker

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Editorial summary, takeaway, and curation by AIssential. Original article published by Sifted.