500 GPs • one reframe
Words matter. Reframing risk capital
Europe has built a globally competitive asset class. One that helps build and scale companies that can transform economies, society and lives. We still refer to it as risk capital. And that is a problem.
We came together not to make the case for venture capital, private equity and private credit in Europe, but to reframe how they are understood based on the real value they create.
Across technology, health, sustainability and strategic sectors, the risk label is constraining the system: from regulation, to policy, to capital. In reality, the greatest risk for Europe is not innovating fast enough and losing ground. The reframe starts here.
“What you call things is often what they become.”
Behind the reframe
Europe holds deep pools of long-term savings. Our entrepreneurial and research foundations are strong. Innovation capital has generated sustained returns across sectors and cycles. Yet venture fundraising in Europe represents only a fraction of US levels across every stage of investment. And performance alone has not closed that gap.
VC fundraising remains dwarfed by the US...
Source: The Draghi report on EU competitiveness
... in spite of sustained performance
Source: EIF Portfolio 2015-2025
Performance is not the problem. The name is. Because innovation capital is called risk capital, it is perceived as risk. That perception filters through to everything that governs how institutional capital is deployed - mandate design, regulatory frameworks, liquidity classification and risk taxonomy. Each of these was built around a perception, not a reality. And collectively they determine how much capital is invested in the asset class that is building Europe's future.
"The term risk capital is outdated, misleading and counterproductive. It doesn’t reflect what this asset class actually contributes to the economy.”
Innovation capital does more than help companies start and scale. The systems that economies and societies depend on - from sustainable and affordable energy, to transformative biotechnology, from strategic autonomy to security - were built with it. The decisions made about how capital is classified and allocated do not just affect portfolios. They shape the economies, the health systems and the infrastructure that citizens rely on today and depend on in retirement.
"Innovation needs private capital - and private capital needs innovation."
The discussions at Ugly Duck led us to the same conclusion on what is needed: a new name, a new narrative, a new way to engage with the investors, regulators and policymakers who determine how much innovation capital flows. This playbook is all three.
What this Playbook does and how to navigate it
This is not a survey. It is the outcome of 200 hours of debate across five workshops and the voice of 500 GPs, each bringing their experience of backing founders and building companies across Europe.
Four workshops focused on key domains of the innovation economy: Innovation and Technological Leadership, Human and Planetary Health, Sustainability and Competitiveness and Security and Sovereignty. A fifth workshop explored Future-oriented Financial Markets looking at how innovation capital functions beyond any single domain, and what it means for how Europe invests in its own future.
We made one deliberate choice from the outset: no companies, no exits, no multiples. Instead, we asked what innovation capital builds for economies, for citizens, for the future Europeans want to live in. We discussed what is holding it back, and how we can help improve the capital-system interaction. Each chapter presents:
01
what has been built
Real-world outcomes innovation capital has already enabled
02
the systemic friction holding us back
The outcomes are real. This is why they have not gone further
03
the shifts GPs propose
Perception shifts to improve the capital-system interaction
04
what becomes possible
What innovation capital could deliver if we get this right
"If we want system-level change, we need the whole system in the room."
This Playbook is an invitation to institutional investors, regulators and policymakers to engage with the reframe and to examine what becomes possible when the whole system moves together.
