Barriers of the European Capital Market from the Perspective of Venture Capital

Despite the growing interest in Innovation and the digital economy, the European venture capital market continues to face several obstacles that hinder the dynamic development of the startup ecosystem. This bachelor thesis focuses on identifying and analysing the key barriers that slow down the growth of venture capital in Europe compared to the United States. In addition to the theoretical framework, the thesis incorporates case studies from Estonia and the Czech Republic, interviews with investors and industry experts, and comparative data analysis. The findings reveal that the main causes of Europe’s lagging behind include fragmented legislation, limited involvement of institutional investors, and a culturally different approach to risk. The thesis proposes recommendations for improving the efficiency of the European capital market, particularly through regulatory reforms, activation of institutional capital, and the development of data infrastructure. The aim is to contribute to a deeper understanding of what Europe lacks to build a truly competitive Innovation ecosystem.