The European Innovation Council (EIC) has already helped companies raise a collective €15.5 billion, creating three deep-tech unicorns and securing 12 equity rounds over €100 million in just the last year, according to 150sec. This financial mobilization shows strategic public funding directly fosters high-growth deep tech ventures across Europe. Such substantial investment and rapid creation of high-value companies set a precedent for future innovation and economic development.

While only a tiny fraction of venture capital (VC)-backed companies generate all investment gains, massive public and private capital is now being mobilized for deep tech, a sector known for even longer timelines and higher risks. This tension arises because approximately 9% of VC-backed companies produced 100% of the investment gains going back to the 1970s, as reported by adamsstreetpartners. This extreme power law distribution makes deep tech's long-term, high-risk profile particularly challenging for traditional VC without external catalysts.

Based on the significant public investment and strategic focus, deep tech is poised for accelerated growth, but success will hinge on continued public-private synergy and a patient, problem-first investment approach. European public funding, exemplified by the EIC, is not merely de-risking deep tech; it's actively compelling traditional venture capital to invest in a sector it would otherwise largely ignore, fundamentally challenging VC's historical aversion to long-term, high-risk plays.

The High-Stakes, High-Reward World of Venture Capital

Venture capital operates on an extreme power law, where a few investments drive all returns. This makes the landscape high-stakes and potentially high-reward.

  • 28.2% — The top quartile of global venture capital funds generated an internal rate of return from 2001 to 2022, according to adamsstreetpartners.
  • 9% — Approximately 9% of VC-backed companies produced 100% of the investment gains going back to the 1970s, as reported by adamsstreetpartners.
  • 77% — VC-backed businesses make up about 77% of US public market capitalization, according to adamsstreetpartners.
  • 81% — VC-backed businesses make up 81% of total patents granted by the US Patent and Trademark Office, as stated by adamsstreetpartners.