Europe outpaces US in new tech founders despite global slowdown The impact of the market reset is also visible in the effects on entrepreneurship and the rate of new company formation by founders. Globally, the rate at which founders are starting new tech companies has receded by approximately 30% from its peak in 2020, with this decline re昀氀ected in the data for new tech founders in both Europe and the US. While a decrease in new companies being founded might appear concerning at 昀椀rst glance, there is a case to be made that this re昀氀ects a return to ‘healthier’ conditions. Those who are taking the leap into entrepreneurship today face a higher bar to raise money, attract talent, and win customers. This changes the perceived risk of starting a company and, as a consequence, has the effect that only the most committed and resilient founders are prepared to embark upon the entrepreneurial journey. Subsequently, it is not surprising to see the share of repeat founders remaining stable, while almost all the decline is accounted for by fewer 昀椀rst-time founders. What will, however, be surprising to most is the fact that the annual volume of founders starting new tech startups in Europe exceeds the US, and has done so consistently for every one of the past 昀椀ve years. Number of first-time and repeat founders starting new companies per year, 2019 to 2023 Repeat founders 25 First-time founders 20 s r e d n 15 u o f e u q i n u 10 f o # 5 0 e S e S e S e S e S p U p U p U p U p U Notes: o o o o o ur ur ur ur ur To adjust for lags in reporting, we E E E E E compare snapshots of data at different points in time, which 2019 2020 2021 2022 2023E allows us to estimate future growth of current figures by extrapolating differences between time points. 2023F is based on data adjusted for lag effect and Sources: Powered by extrapolated based on data as of 20 September 2023. 47 | Executive summary