The United States has produced about twice as many unicorns (private startups valued at $1B+) as China and more than four times as many as the European Union. These numbers reflect institutional and cultural advantages in the U.S. startup ecosystem.
Table: Number of Unicorns Created Since ~1990
| Region | Cumulative Unicorns |
|---|---|
| United States | ~1,950 |
| China | ~970 |
| European Union | ~450 |
Source: Estimates based on Hurun Global Unicorn Index 2024 and Strebulaev & Gornall, Stanford Venture Capital Initiative. Includes both active and exited unicorns created since ~1990.
Why the Disparity?- Tolerance for Inequality: The US gap between rich and poor is bigger than in any other advanced country, but most Americans want to join the rich, not soak them. The EU taxes inquality.
- Bankruptcy Laws Forgive Failure: U.S. founders can declare bankruptcy and get a clean slate in ~7 years. EU bankruptcy regimes are often punitive, with long-term credit restrictions. That discourages risky ventures. The U.S. treats failure as a résumé item, not a moral failing.
- Unified market: A U.S. startup can scale across 330 million consumers under one legal system. EU startups must navigate 27. It's harder to grow when your “domestic market” includes multiple languages, tax codes, and regulations.
- University spinouts: U.S. research universities are world leaders in tech transfer. Stanford alone has spun out over 200 unicorns. The Bayh-Dole Act helps universities commercialize IP. Europe is catching up, but still lags.
- Easier exits (acquisitions) lead to more entry: investors require an exit.
- Immigration to the US Nearly half of U.S. unicorn founders were born outside the U.S. If you have a good idea, you can more easily act on it in the US.
- Lighter regulation: U.S. startups face less red tape. European data/privacy rules (e.g., GDPR), strict labor laws increase fixed costs and reduce flexibility.
Acknowlements: This post based on research begun by Annie Cox, and Avi Goldberg, and Jack Underwood and finished by ChatGPT.
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