An increasing number of Dutch start-ups are considering relocating abroad due to better financing opportunities, more favorable regulations, and greater growth potential. This trend raises concerns that the Netherlands and Europe may lag in innovation and technology if too many successful start-ups leave.
Former European Central Bank President Mario Draghi warned about this exodus in his report on European competitiveness. Between 2008 and 2021, at least 40 out of 147 highly successful European start-ups, valued at over $1 billion, moved abroad, mainly to the United States.
Sohrab Hosseini, co-founder of AI company Orq.ai, plans to move to the U.S. seeking better funding prospects. He notes that while his company struggled to raise €2 million, similar U.S. start-ups have secured tens of millions from investors. This substantial capital makes it easier for start-ups to scale up.
In 2022, Dutch start-ups raised a total of €2.1 billion in investments, compared to approximately €269 billion in the U.S. This equates to about €111 per capita investment in start-ups in the Netherlands versus €803 per capita in the U.S.
Investors in the U.S. tend to be more willing to take risks on early-stage companies, says Anke Huiskes, manager of a venture fund investing in start-ups. She observes that European investors often focus on potential risks, while American investors are more opportunity-driven.
Apart from funding, less stringent regulations abroad also attract Dutch start-ups. Upcoming deregulatory measures in the U.S. tech sector, particularly in AI, offer companies more freedom. Countries like the United Arab Emirates actively lure start-ups by offering incentives such as golden visas and covering initial operational costs.
Despite these challenges, the Netherlands remains an attractive location for entrepreneurs due to its technical talent, strategic location, English proficiency, and strong educational institutions. There's also increasing interest from foreign investors and international talent.
The Dutch government and the EU are being urged to enhance the investment climate to retain start-ups and remain competitive with major economies like the U.S. and China.
Source: NOS News