It is surprising when working with UK entrepreneurs alongside European and American ones to observe how different their business philosophies are. The British founders have an intriguing combination of the American and European strategies, balancing ambition and prudence, and creating their own entrepreneurial cultures.
The UK founder style: striking a balance between caution and global ambition
UK founders, especially those based in London, constitute a unique style of entrepreneurship that is both European and American. They focus on building sustainable companies through operational excellence and profitability early on, but also exhibit more risk-taking ability and global ambitions than their counterparts in continental Europe.
The balanced UK model is most evident in companies like Wise (previously TransferWise), which built up its fintech operations incrementally with an emphasis on quality and efficiency as it scaled internationally. Companies like Deliveroo are more in the American-style mould, making bold claims and raising huge amounts of money to fuel rapid expansion.
Successful UK entrepreneurs like Monzo, Improbable, and Darktrace have been able to balance the European emphasis on stability with the American emphasis on rapid growth. Having balanced technical superiority, innovative offerings, and international orientation, such firms have seen tremendous growth as well as worldwide recognition.
British business people adopt a balanced approach to raising funds by mixing European and American fundraising styles. The Enterprise Investment Scheme (EIS) plays a very crucial role in promoting early-stage investment by offering tax relief to investors, thus filling the gap in later-stage investment more prevalent in Europe.
The British startup fundraising strategy varies by sector and business type. B2B and hardware founders may prefer the European model, which is based on organic growth and steady equity dilution, while software and consumer goods founders take an Americanized approach by pursuing large capital raises aggressively to drive aggressive expansion.
A number of successful British startups have demonstrated a hybrid model, combining the European focus on efficiency in operations with American belligerence in creating scale when the time is right. Access to international investors and talent in the UK opens entrepreneurs to new perspectives and attitudes and helps them strike a balance in managing the complexity of foreign markets.
By balancing American and European investment cultures and leveraging the unique resources within the UK ecosystem, British entrepreneurs are well-positioned to gain access to the capital needed to scale their businesses. This pragmatism, along with the ability to adapt to different market dynamics, has become a significant competitive advantage for UK startups.
Let's explore further the European and American entrepreneurial cultures.
The European school of entrepreneurs: control and steadiness
European entrepreneurs are more likely to base their companies on a firm control foundation.
They don't merely ask, "How fast can we grow?" but also, "Will we weather a hurricane?" They meticulously track expenses, build detailed financial projections, and predict steady growth.
The European business spirit conforms to broader European values and lifestyle.
Work-home equilibrium, six-hour workdays (and even four-day workweeks in some countries), long vacations, and family and personal life coming first all have an effect on a unique entrepreneurial mindset. Here, a "modestly" growing 10-20% per year company is totally consistent with life philosophy. It is not a "worse" strategy — it is merely other cultural values.
One of the most characteristic aspects of European founders is their attitude toward fundraising.
They prefer to start with bootstrapping, doing everything with their own money and trying to retain full control over their company as long as they can. When seeking external capital, they negotiate company valuations carefully and aim to minimize equity dilution. While this strategy ensures greater control, it often limits the speed of growth and rapid scaling opportunities.
Interestingly, despite having less access to capital, European venture funds have demonstrated a 1.92% higher net return than American funds over the past decade — proof of the efficiency of their strategy, even though the total investment volume in the U.S. remains significantly larger.
European founders are more open to the option of selling their startups early.
They are inclined to consider M&A exits as a good entrepreneurial outcome. This willingness to sell is due to a pragmatic approach towards business, whereby setting up a sound company and selling it profitably is a good success story.
This mindset is also partly culturally motivated, as described by the CEO of Norges Bank Investment Management: “Europe is less hard-working, less ambitious, more regulated, and more risk-averse than the US, and the gap between the two continents is only widening.”
The American school of founders: scale and speed
In Silicon Valley, things work differently. The most valuable asset here is time.
If you have an idea that can transform the world, you have to move fast and scale up fast. There's a high risk appetite driven by the culture of "fail fast," in which failures are part of the inevitability of success.
American business people are the most skilled at creating grand visions and compelling stories that make investors put hundreds of millions of dollars into their companies, even when profitability is still far away. The figures confirm the success of this approach. In 2024, San Francisco Bay Area startups raised $90 billion in venture capital. This is 57% of the overall US startup investment, which stood at $178 billion in the year, according to Crunchbase).
This focus of capital is a sign of Silicon Valley's undisputed dominance of the world startup ecosystem. Top venture capitalist Paul Graham sees Europe's issue: "Europe's problem isn't a lack of courage — it's a lack of examples."
US founders think entirely differently when it comes to fundraising.
They raise large amounts of money aggressively at an early stage because they realize that high growth requires a great deal of investment. According to the researches, US venture capitalists invest at every stage, but especially in growth-stage companies, with funding levels eight times greater than in Europe. The average US venture fund is $282 million, compared to $168 million in the UK and $128 million in the EU.
US investors are guided by the straightforward equation for growth: if the business went from $30 million worth of sales three years ago → $50 million worth two years ago → $100 million last year, then most likely this year it is to reach $150-$200 million.
To American founders, equity dilution is not a risk — it's a tool. Their creed is simple: "It's better to own a smaller piece of a billion-dollar company than to own 100% of a much smaller business."
American founders are nearly in a state about their product and cause.
They don't, as do their European brethren, find selling out a desirable exit. They aim instead to build a behemoth company that changes the world. When Yahoo offered to buy Facebook for $1 billion, Mark Zuckerberg famously rejected the bid with these words: “We don't build services to make money. We make money to build better services.”
A curious phenomenon occurs when there are European founders with an "American" mindset — i.e., they have a mentality for rapid growth and market leadership. When such entrepreneurs approach European investors, they are informed: "This is too risky; you are expanding too rapidly." With such a reaction, many European startups approach American investors and frequently relocate to the US.
Therefore, many European startups were not able to get proper support in their home countries. This "talent migration" adds to the disparity between the European and American tech ecosystems.
How to make your choice: a founder’s checklist
When choosing a strategy for business growth, consider the following:
- Product type: hardware and B2B offerings typically suit the European model, whereas B2C offerings and software typically thrive under the American model.
- Market size: in the event of world-class products with a huge TAM (Total addressable market), the American model may be apt.
- Access to capital: assess your practical ability to raise investments.
- Personal values: which model aligns with your notion of success?
- Team readiness: are your co-founders and key employees prepared for the chosen strategy?
Conclusions and recommendations
My personal stance is that if you aim to build something truly massive, the American scaling approach offers more advantages. However, this doesn’t mean disregarding European wisdom regarding operational efficiency.
For British entrepreneurs, it’s essential to:
- Embrace a balanced approach that combines ambitious visions with pragmatic execution
- Be capable of presenting their ideas in a way that is effective for both American and European investors
- Monitor sustainable growth alongside seizing opportunities for high growth when the time is appropriate
- Leverage the UK's access to global capital and talent to build businesses that can compete globally
- Take advantage of the unique resources and support in the UK climate, such as the Enterprise Investment Scheme (EIS), to fuel growth
- Tune their approaches based on the nature of their products and target markets, balancing between the European and American models
Ultimately, there is no single recipe for success. Every entrepreneur must find his or her own path, considering product specifics, market dynamics, and personal values. As Paul Graham says, “The best founders don't build startups to sell them. They build them to change the world.” And this mentality, in my view, best responds to the problems of the current global economy.
