Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTLeah HodgsonMon, September 21, 2026 at 12:49 PM GMT+2 6 min readEurope's two-tier funding environment is leading to a crisis in its early-stage market, creating a bottleneck that could starve the next generation of founders.In its recent report on European founders, VC firm Antler noted that the number of startups launched in the region is accelerating, but fewer are receiving investor support. Mega-rounds are capturing an outsized share of VC dollars, leaving startups that aren't on a hyper-growth trajectory strapped for cash.We spoke to Antler partner and the report's author, Christoph Klink, to find out what is causing the block in Europe's early-stage pipeline and how to fix it.Christoph Klink.jpgChristoph Klink, partner at AntlerPitchBook: When we talk about funding gaps in Europe, it's about growth-stage funding. Should we be looking elsewhere?Klink: There's rightfully a lot of attention on fixing the growth-stage funding gap in Europe. But let's say we pool all our resources and fix it, where are we going to be in three or four years' time if the early-stage funnel is not progressing as it should be?It's not easy for a lot of [early-stage] founders right now. There are essentially two worlds they live in: either you're growing like hell, and you can go out and raise easily. Or you're not, in which case, you're better off finding a way to become cash flow positive. To slowly but steadily grow your numbers and build momentum, and then either raise or fund yourself.The report noted that the number of companies founded grew by 84% through 2025, and AI is lowering the barrier to entry. Is the startup pipeline getting worse?Three years ago, if you weren't a computer scientist or an engineer, then you had to wait to find one before you could go out and build your first product. Now, you can skip that step entirely.Some of these companies will turn out great, but I imagine there will be a number of startups that reach $100,000 in ARR, yet won't scale to $100 million. It's easier to catch up, but that doesn't mean it's easier to win.But I think we have every reason to believe that the founders starting companies right now are the strongest we've ever seen. Far more founders today are coming out of mature scale-up companies, have technical backgrounds, or have been through crucial scaling phases at startups themselves than in the past. Out of this high-quality pool, there must be great companies being built that aren't getting the attention they would have gotten before.Does that mean some genuinely good companies are being overlooked simply because they don't fit the biggest investors' fund models?Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info