Comment by jschveibinz
5 days ago
Follow the money: European wealth is concentrated in a smaller number of centralized institutions that are more conservative investors compared to U.S.
Pension funds: - U.S. has over 5,000 independent municipal, state, and corporate pension systems that invest aggressively. - EU pension capital is in national funds.
University Endowments: - U.S. has over 800 active endowments (with 130+ exceeding $1 billion) - EU universities are state funded, with little or no endowment funds
Corporate Financing: - U.S. businesses get > 70% of funding from VC, PE, mutual funds - EU companies favor banks
Family Offices: - U.S. system has created over 10,000 single-family offices that invest aggressively - EU has ~2,000
State investment: - U.S. moves .16% of GDP into small business with no equity ownership -- free market VC takes equity - EU moves < .08% of GDP into small business with full equity ownership.
Exactly. Deep and sophisticated capital markets are the #1 advantage that US tech companies have over their EU competitors. The difference in cost of capital is huge, especially for something as capital intensive as SpaceX.