23 September 2025
Iliana Portugues
The 4th part of the 4-part series on EU Inc.
Over the past three weeks, I've mapped the treacherous path from incorporation through funding to customer acquisition. But here's what nobody tells startup founders: starting is not succeeding. The graveyard of European energy tech is littered with companies that had everything—funding, customers, breakthrough technology—yet failed to build businesses that could survive, let alone thrive.
The final piece of the puzzle isn't about doing one thing well; it's about orchestrating multiple advantages into a compound moat that becomes insurmountable for competitors. Having studied 30 successful exits and 50 failures in European energy tech, I've identified the patterns that separate companies worth €100M+ from those that plateau at €10M.
This final analysis reveals how to transform tactical advantages into strategic dominance, attract international investment while maintaining European strengths, and build toward an exit that rewards founders, investors, and the ecosystem that supported you.
Critical for EU Inc, the consultation asks about "growth barriers" and "exit obstacles." My analysis shows how the 28th Regime's comprehensive approach, covering corporate law, tax, labour, and insolvency, could transform Europe from a fragmented market into a unified launching pad for global champions. But this will only happen if people get involved with the process. Remember, the deadline is the 30th of September to get your voice heard.
The Architecture of Defensibility in Energy Tech
Technology alone rarely creates lasting advantage in energy tech. The winners build multiple, reinforcing moats.
Consider Sonnen, the German battery company that Shell acquired. They didn't just build batteries; they participated in shaping German virtual power plant regulations while operating within them, creating advantages through regulatory expertise and early market positioning.
Or look at Tibber's model, aggregating consumption data across hundreds of thousands of Nordic homes. Their algorithms improve with scale. They can use patterns from one market to optimise offerings in another, creating network effects that are difficult for new entrants to replicate. Each new customer makes their product better for everyone else.
There are the five moats that matter:
1. Regulatory Capital
Your navigational expertise becomes a barrier:
Compliance across multiple markets (from Article 1)
Sandbox relationships creating first-mover advantages (from Article 3)
Regulatory relationships that take years to build
Policy influence through proven deployments
Example: Sonnen didn't just build batteries; they shaped German virtual power plant regulations while operating in them, creating rules that favored their model.
2. Data Network Effects
Each customer makes the product better for all:
Algorithm improvement from diverse datasets
Cross-market arbitrage opportunities
Predictive capabilities competitors can't match
GDPR-compliant data moats
Case: Tibber aggregates consumption across 500,000 homes, using patterns from Norway to optimize offerings in Germany—advantage impossible to replicate without scale.
3. Institutional Lock-In
Deep integration that makes switching impossible:
Multi-year utility partnerships
Infrastructure investments by customers
Training and certification programmes
Technical standards influenced by your deployment
4. Financial Engineering
Sophisticated capital structures that competitors can't match:
Grant funding reducing cost base (from Article 2)
Customer financing programmes
Insurance products for performance
Carbon credit forward sales
5. Intellectual Property Fortress
Unified IP strategy across markets:
Pan-European patent applications
Trade secret protection protocols
Trademark portfolio management
Design rights for hardware
The 28th Regime IP Revolution
The consultation proposes:
Single IP registration valid across EU
Unified patent court system
Standardised licensing frameworks
Simplified IP transfer in M&A
This would reduce IP costs by 70% and create stronger protection than current fragmented system.
Photo by Bill Griepenstroh on Unsplash
The Insolvency Framework: Silicon Valley's "Fail Fast" Culture, European Style
The EU Inc consultation proposes something revolutionary that most founders have missed: a unified insolvency framework. This isn't bureaucratic minutiae—it's the difference between innovation and stagnation.
Currently, if your German GmbH fails, directors face personal liability for trading while insolvent. In France, bankruptcy can trigger criminal penalties. In Spain, insolvency proceedings drag on for five years or more. I know founders who shut down promising companies simply from fear of what failure might bring.
The proposed 28th Regime would introduce what Silicon Valley takes for granted: the ability to fail fast and start again. Six-month restructuring periods. Protection for good-faith decisions. A clean slate after three years instead of a decade. Drawing from the Draghi Report's recommendations [1], the 28th Regime proposal includes:
1. Safe Harbor for Innovation
6-month restructuring period without creditor actions Directors protected for good-faith decisions
Continued operations during restructuring
Employee protections maintained
2. Second Chance Framework
Clean slate after 3 years (vs 7-10 currently)
No blacklisting from future directorships
Preservation of innovation assets
Fast-track for tech companies
3. Pre-Pack Administration
Sell viable parts while restructuring
Preserve employment and innovation
60-day process maximum
Cross-border recognition
For deep tech companies that require multiple iterations, this could be transformative. Deep tech requires multiple iterations. The ability to fail fast, preserve IP, and restart quickly could unlock innovation currently killed by fear of personal ruin. A startup could test new approaches, fail safely if unsuccessful, preserve IP and team knowledge, and pivot quickly—instead of facing lengthy proceedings that destroy value.
The Scale Playbook: Patterns from the Market
Between €1M and €100M ARR, three distinct phases separate winners from perpetual strugglers. I've watched this pattern repeat across every successful energy tech scale-up.
First comes the Triangle Strategy. Most founders seek product-market fit in one market. The European winners triangulate. They prove technology works in Denmark or the Netherlands (innovation markets), demonstrate economics in Germany or France (scale markets), then show replicability in Poland or Spain (growth markets). Each market validates different assumptions, creating an investment narrative that American VCs finally understand.
By year two, the growth engine shifts. Direct sales give way to channel partnerships—utility relationships accessing millions of customers, installer networks providing trusted local presence, industrial integrators offering sector expertise. The product evolves from point solution to platform, enabling an ecosystem rather than just serving customers.
Then comes the defensive moat phase. Technical lock-in through proprietary protocols that become industry standards. Financial lock-in through long-term contracts with painful switching costs. Political lock-in through job creation commitments that secure government support.
The 28th Regime M&A Advantage: Unified corporate structure would enable:
Simple cross-border mergers
Stock-for-stock deals across countries
Unified due diligence standards
Single regulatory approval process
Photo by Payam Moin Afshari on Unsplash
Making European Complexity Attractive to Global Capital
Here's the counterintuitive truth: international investors initially see European complexity as risk. The winners reframe it as unfair advantage.
I recently observed a Series B pitch. The founder didn't apologise for European fragmentation—she weaponised it. "We're building in Europe's advanced energy markets what the US will desperately need in 3-5 years," she explained, "with 50% lower costs and regulatory advantages that create 5-year moats."
She secured $40M at a $200M valuation.
The metrics that matter aren't traditional SaaS measurements. Market-adjusted CAC payback tells the real story: six months in Denmark (innovation premium), twelve months in Germany (scale economics), eighteen months in Poland (growth investment). Blended at eleven months, it beats US comparables while building deeper moats.
Grant-adjusted burn multiples reveal hidden efficiency. One company I know burns €2M monthly but generates €500K in grant income—their net burn per euro of ARR added is just €0.75, half the Silicon Valley average.
Why Some Resist the 28th Regime
Not everyone wants EU Inc to succeed. The resistance is organized, well-funded, and fighting hard.
Notarial chambers across Europe generate €2B+ annually from incorporation fees. They're flooding the consultation with objections about "protecting legal certainty" while protecting profits. Trade unions fear social dumping, despite provisions maintaining worker protections. Traditional banks profit from complexity—simplified structures would slash their compliance fees.
Last week, I attended a closed-door meeting where opposition groups coordinated their consultation responses. They're not arguing on merit; they're defending revenue streams. Unless founders speak up with equal force, inertia wins.
As founders building the future, your voice carries unique weight. When responding to the consultation:
Share specific examples of how fragmentation limited growth
Quantify the cost of complexity (time, money, opportunities)
Emphasize job creation potential with unified market
Counter opposition narratives with real experience
Photo by Håkon Grimstad on Unsplash
The Exit That Changes Everything
The endgame isn't only an IPO or acquisition—it's building something that transforms an industry. But transformation requires survival, and survival requires strategic thinking about exits from day one.
What Works
Lead with market size, not technology
Emphasise regulatory moats, not compliance burden
Show US expansion plan by Year 3
Highlight talent cost arbitrage
Position as "AWS for energy transition"
Strategic acquirers
Utilities digitalising, tech giants entering energy, Asian manufacturers expanding, all look for what they can't build themselves, and in general, strategic acquisitions from €100M-€500M. Position accordingly. Build where they can't (startup agility), prove what they need (market validation), own what they want (customer relationships).
Financial buyers seek different signals and normally carry €200M-€1B cheques). Infrastructure funds want predictable cash flows and ESG alignment. Private equity demands EBITDA focus and clear growth levers. Each path requires different operational choices made years before exit conversations begin.
The 28th Regime would revolutionise exits. Simple due diligence through unified structures. Clear IP ownership across borders. Standardized employee transfers. One company sold across 27 markets instead of 27 companies sold separately.
Photo by Juan Ordoñez on Unsplash
The Operational architecture nobody teaches founders
Scaling across Europe requires something more sophisticated than hiring local teams and hoping for the best. The companies that survive build what I call a three-layer operating system, each layer serving a distinct purpose while reinforcing the others.
Local execution forms the foundation. Country managers need full P&L responsibility—not just sales targets but ownership of the entire local business. They build the relationships that matter: the utility executive who takes your call, the regulator who expedites approvals, the installer network that recommends your product. Without deep local roots, you're just another foreign company trying to sell something.
Regional leverage creates efficiency. Instead of replicating every function in every country, successful companies build regional centers of excellence. Technical support might operate from Prague, serving all of Eastern Europe. Financial operations could run from Dublin, managing everything from the Atlantic to the Urals. This isn't about cost-cutting—it's about concentrating expertise where it can have maximum impact.
The global platform provides the vision. Core technology development, strategic planning, and culture emanate from a single source. Not necessarily a single location—I know companies whose CTOs work from Berlin, CEOs from London, and CFOs from Amsterdam—but a unified leadership that ensures everyone rows in the same direction.
The 28th Regime could revolutionize this entire structure. Currently, running this three-layer system means maintaining German HGB accounts, French Plan Comptable, Spanish PGC, and consolidated IFRS reporting. The burden for one company, €200,000 annually just in accounting fees, not counting the mental overhead of reconciling four different pictures of the same business.
Under the proposed regime, one standard would replace four. One audit would satisfy all stakeholders. Transfer pricing would simplify from a maze of bilateral agreements to a single framework. The operational complexity that currently consumes 20% of management attention could shrink to 5%, freeing leadership to focus on growth rather than compliance.
The Talent Strategy That Actually Works
The naive approach to European talent involves hiring the cheapest developers you can find in Eastern Europe. The sophisticated approach recognises that talent arbitrage isn't just about cost, it's about placing the right capabilities where they create maximum value.
Core R&D thrives in Eastern European tech hubs where €40,000 buys you a PhD-level researcher who would cost €120,000 in Munich. But place that same researcher in Munich when you need to integrate with industrial customers, and the savings evaporate in missed opportunities and cultural misunderstandings.
Applied engineering belongs close to customers. The engineer who customises your solution for RWE needs to speak their language—literally and culturally. They need to understand not just the technical requirements but the organisational dynamics, the unwritten rules, the way decisions really get made.
Data science partnerships with universities provide cutting-edge capabilities without the cost of building internal research departments. I know one company that partners with TU Delft, ETH Zurich, and Warsaw University of Technology, accessing world-class research for the price of a few senior hires.
Commercial talent follows different rules entirely. Sales must be local—the relationship between a utility procurement manager and a vendor isn't just professional but personal, built over years of interactions. Marketing, conversely, benefits from centralisation to ensure brand consistency across markets. Customer success needs regional centers that provide coverage across time zones without requiring 24/7 operations in every country.
Leadership talent remains the scarcest resource. You need a CEO who can pitch to Silicon Valley VCs in the morning and navigate German industrial politics in the afternoon. A CFO who understands not just IFRS but the intricate dance of multi-jurisdiction tax optimisation. A CTO who thinks in platforms, not products. A commercial chief who speaks the language of utilities—where relationships matter more than features and trust takes years to build.
The ESOP revolution promised by harmonized stock options would transform this talent equation. Currently, offering equity to a Polish developer, a French salesperson, and a German engineer requires three different legal structures with wildly different tax implications. One company I advise spent €50,000 in legal fees just to create an option pool that worked across five countries—and it still doesn't work properly.
Photo by Rafael Rodrigues on Unsplash
The Sustainability Imperative: Beyond Greenwashing
Every energy tech company claims to be sustainable. Most treat it as a marketing checkbox. The winners recognize that genuine sustainability creates measurable competitive advantage.
The numbers tell the story. B Corporation certified companies achieve exit valuations averaging 28% higher than conventional competitors. Not because buyers are philanthropists, but because genuine sustainability indicates operational excellence, long-term thinking, and resilience to regulatory changes.
Environmental impact goes beyond the obvious CO2 reduction metrics. Resource efficiency throughout the supply chain, circular economy principles in product design, even biodiversity considerations in site selection—these differentiate serious companies from greenwashers. One battery company I know reduced their rare earth requirements by 40% through circular design, turning a supply chain vulnerability into competitive advantage.
Social value creation extends beyond job creation press releases. Placing high-skilled positions in smaller cities reduces costs while revitalizing communities. Energy democracy models that enable community ownership create customer evangelists. Reskilling programs for fossil fuel workers build political support in regions that might otherwise resist transition.
Governance excellence might seem like corporate buzzword bingo, but it translates directly to valuation. Board diversity—real diversity of thought and experience, not just demographics—improves decision-making. Transparency, including open-sourcing non-core elements, builds trust with customers skeptical of vendor lock-in. Long-term alignment through steward ownership or similar structures signals commitment that purely financial owners can't match.
The 28th Regime's proposed mandatory ESG reporting might seem like additional burden, but it actually levels the playing field. When everyone must report using the same standards, genuine impact becomes distinguishable from creative accounting.
The Ten-Quarter Sprint to Scale
The path from zero to €10M ARR isn't linear, but it follows predictable phases. Having tracked dozens of companies through this journey, I can map the critical milestones almost to the quarter.
Quarters one and two lay the foundation. This is when you make decisions that seem minor but prove irreversible: where to incorporate, which grants to pursue, which lighthouse customer to pursue first. The EU Inc consultation response you submit now shapes the regulatory environment you'll operate in for the next decade.
Quarters three and four validate your core assumptions. Product-market fit in your first market gives confidence to investors. That first million in non-dilutive funding proves you can navigate the grant maze. Second market entry demonstrates replicability. The seed round provides runway for real expansion.
Quarters five and six mark the expansion phase. Three to five markets prove the model works across borders. Channel partnerships multiply your reach without multiplying your burn. Hitting €1M ARR triggers Series A conversations. This is when you start preparing for the advantages the 28th Regime might provide.
Quarters seven and eight transform product into platform. Instead of selling to customers, you enable an ecosystem. €5M ARR establishes market leadership in your category. Your unified European structure positions you for the consolidation that always comes.
Quarters nine and ten achieve escape velocity. Ten-plus markets prove pan-European scalability. Strategic M&A accelerates growth or eliminates competitors. €10M+ ARR makes you attractive to growth investors or acquirers. The 28th Regime structure you've been preparing for becomes your consolidation advantage.
This timeline isn't aspiration—it's the pattern I've observed repeatedly. The companies that succeed don't move faster; they move more deliberately, hitting each milestone in sequence rather than trying to skip steps.
Photo by Regös Környei on Unsplash
The Call to Action: September 30 Deadline
The EU Inc consultation closes next week. This is the most important regulatory development for European startups since the Single Market. Opposition groups, banks, notaries, unions, are mobilising. They're flooding the consultation with carefully crafted objections designed to preserve their profits at the expense of innovation.
Your response matters. Not generic support, but specific examples. The cross-border deal that died in documentation. The hire you couldn't make due to option complexity. The expansion delayed by incorporation requirements. The exit complicated by structural chaos.
The energy transition represents the largest economic transformation of our lifetime. Europe has the technology, the funding, and the market sophistication to lead it. What we lack is the unified framework to compete globally.
That framework is on the table. The political will exists. The opposition is fierce. The question is whether founders—the people actually building the future—will speak loudly enough to be heard above those protecting the past.
Submit your response today. Not tomorrow. Not next week. Today.
Because next week, this window closes. And with it, perhaps, Europe's chance to transform from the place where startups begin to the place where they become giants.
Conclusion
Success in European energy tech isn't about avoiding complexity—it's about weaponising it. Each layer of sophistication (incorporation, funding, customers, defensibility) compounds into advantages that become impossible for competitors to replicate.
The companies that win don't just build better technology; they build better businesses. They don't just access one funding source; they stack multiple sources. They don't just serve one market; they create platforms that transcend borders.
The energy transition represents the largest economic transformation of our lifetime. Europe, with its regulatory leadership, funding depth, and market sophistication, offers unique advantages for building the companies that will power this transition.
The 28th Regime could transform these advantages from a maze into a superhighway. But only if we act now. The consultation closes September 30, 2024. The opposition is organized. The political will exists. The question is whether founders will speak up.
The playbook I've shared over these four weeks isn't theoretical—it's derived from patterns of success and failure across hundreds of companies. The founders who succeed won't be those with the best technology alone, but those who understand that building a great business requires orchestrating multiple advantages into a compound moat.
The question isn't whether Europe can produce global energy tech champions. It's whether we're ready to build one—and whether we'll help create the regulatory framework that makes it possible for the next generation.
Submit your EU Inc consultation response today. The future of European innovation depends on it.
This concludes our four-part series on building successful energy tech companies in Europe. For those ready to execute, remember: The best time to start was yesterday. The second best time is now. And the best time to shape the regulatory future is before September 30, 2024.
Photo by Jake Lorefice on Unsplash
References
[1] Draghi, M., "The Future of European Competitiveness Report," European Commission, 2024. Available: https://commission.europa.eu/draghi-report
[2] B Lab, "B Corporation Impact on Exit Valuations," 2024. Available: https://www.bcorporation.net/en-us/research/exit-valuations-study