EU startup founders warn leaders: reforms are being gutted

Founders behind the EU–INC campaign have issued an urgent appeal to European heads of state, warning that months of negotiations are stripping out the provisions intended to simplify capital-raising for early-stage companies. The letter, sent yesterday, marks the first public pushback from the startup ecosystem against what it describes as “dilution by committee” of the EU Startup Capital Reforms package.

The reforms, first proposed in early 2026, aimed to harmonise listing rules, reduce disclosure burdens for pre-revenue companies, and create a pan-European “startup visa” for non-EU founders. Reports suggest the latest draft may remove key elements of the original proposal, including adjustments to fundraising thresholds and reporting requirements. Critics argue these changes could undermine the reforms’ core goals.

The appeal follows a pattern of behind-the-scenes lobbying that StartupReader reported on earlier this month, when campaigners linked to the negotiations accused lawmakers of watering down the original proposals. The timing is notable: the reforms are expected to face a final vote in the coming weeks, leaving little room for further amendments.

Founders have expressed concerns that the revisions could disadvantage European startups compared to other regions, though policymakers have defended the changes as necessary safeguards. The letter does not call for a full rewrite but urges leaders to reconsider certain provisions, including those related to fundraising and founder mobility.

The outcome may have implications for sectors like defence technology, where startups have been testing advanced prototypes under increased military budgets. If the reforms proceed in a more restrictive form, some companies could face additional challenges in scaling their operations.

Sources: tech.eu