EP07 - Why European Deep Tech Struggles to Commercialize, and How We Fix It

I keep hearing the same story.

Europe has brilliant research. Strong universities. People who can solve problems that most of us cannot even describe. Yet so many deep tech breakthroughs never make it into the market in a real way.

On Venture Kitchen, I spoke with Károly Szántó and Peter M Kovacs about this exact gap. We were not talking theory. We were talking about patterns we see again and again in university spinouts and early deep tech ventures, especially in Central and Eastern Europe.

One number is hard to ignore. Roughly 22 percent of European university spinouts get funded by venture capital. That means most never even reach investable. Not because the science is weak. Because the bridge from proof of concept to commercial execution is missing.

This is a system issue. Not a talent issue.

If you are an investor, it means opportunity leaks out of the pipeline before it becomes visible.
If you are a founder or researcher, it means years of work can get trapped in the wrong loop.
If you care about impact, it means the world never benefits from what you built.

Deep tech is already hard. We should not make it harder by ignoring the basics.

The real problem is not that Europe lacks capital

The reflex answer in Europe is funding.

We need more capital. We need bigger funds. We need more grants.

Capital matters, but it is not the first bottleneck.

Money is not free anymore. Investors have become more careful. Fewer startups get funded. Ticket sizes can be larger, but the bar for execution is higher. That is reality.

At the same time, Europe is putting serious attention on the growth stage of deep tech. That should be a positive signal. But if most teams never become investable, growth-stage capital does not solve the bottleneck. It only amplifies the gap.

The gap sits earlier.

It sits between research and the market.

It sits in how teams are built, how incentives work, how milestones are defined, and how people translate science into value.

What blocks deep tech from commercializing

In my conversation with Károly and Peter, we kept coming back to four root causes.

1) Incentives reward publications, not market outcomes

In research, commercialization can feel like a dirty word. I said it in the conversation, and I stand by it. Especially in healthcare. Some researchers would rather publish in a top journal than bring the work to market.

That is not because they do not care. It is because the system taught them what success looks like.

The academic KPI is publications, citations, and recognition inside the bubble.
The market KPI is adoption, validation, outcomes, and value creation.

If your incentives push you toward publishing, you will optimize for publishing. Even if your work could help people tomorrow.

When we talk about commercialization, we should not pretend it is only a founder problem. It is an environment problem too.

2) Teams are built for research, not for execution

A university spinout often starts as a research team that gets a company wrapper.

That can be a good start for science. It is usually a weak start for execution.

Execution requires role clarity. Decision making. Commercial leadership. A rhythm that turns progress into repeatable delivery.

One sensitive topic in this space is CEO fit.

Many scientific founders are not CEOs. That is fine. It is not an insult. A CEO's job is a specific job. It is about building a company, not only building a product.

Peter said it clearly in the conversation. A founder can be brilliant in medical science and still not be the person who should run the company as CEO. The right move is often role clarity. The founder becomes CMO or CTO. Someone else becomes CEO and carries the commercial responsibility.

In Central and Eastern Europe, that shift can feel like a loss of status. In reality, it is often the move that saves the company.

Deep tech companies do not fail because people are not smart. They fail because the system around the talent is not built.

3) IP and rights are unclear, so the company is not investable

This part is boring. It is also where many companies get stuck.

Before valuation, before fundraising, before decks and conferences, the boring part needs to be clear.

Who owns the IP.
Who controls it.
What rights sit with the university.
What rights sit with the founder.
What rights sit with the company.
What an investor is actually investing into.

If this is unclear, the company is not investable. It does not matter how good the research is. It does not matter how strong the pitch looks.

This is why I always want to start here. Proof of concept is not enough. If the foundation is messy, everything built on top becomes fragile.

Investability is part of the product.

4) Milestones are vague, and trust breaks early

Károly made a point I have seen from the founder side many times. Experienced investors decide quickly whether they want to spend time.

Not whether they will invest. Whether the startup earns the next meeting.

Sometimes that decision happens in the first five minutes.

So if your story is unclear, you never reach due diligence.

There is another problem that is even more damaging. Teams report “milestone achieved,” and later it turns out the milestone was partially achieved, or achieved under a different definition than the investor assumed. That creates friction that is completely avoidable.

This is why we push for milestones that are crystal clear. Measurable. Specific. With quality criteria. With ownership.

Milestone discipline is not admin. It is trust.

Funding is not the headline; delivery is

Peter said something that should be obvious, but the ecosystem behaves differently. Funding should not be the main headline.

Funding is a tool. It can accelerate. It can de risk. It can open doors.

But funding is not value creation.

In deep tech, value creation is validation, regulatory progress, clinical evidence, partnerships, and proof the market needs the solution.

I often see startup news that treats a funding round like an achievement. That is backwards. The achievement is what you delivered to deserve confidence.

If you want serious investors to take you seriously, you need to show delivery, not only ambition.

How we fix it: a practical playbook

I do not believe in magic fixes. I believe in building blocks.

In the conversation, we described a sequence that keeps the work grounded and investable. It is not glamorous. It is practical. It respects deep tech reality.

Step 1: Make IP investable

Start with proof of concept, then map the IP position.

Is the IP with the university, the founder, or the company.
What licensing terms exist
What control the company has.
What needs to be fixed before any investor can get comfortable.

Teams lose months, sometimes years, because they treat this like paperwork instead of investability.

If you want to build a company, investability is not optional.

Step 2: Assess the team as part of due diligence

This is where many people get uncomfortable, but it matters.

We do not treat team assessment as a nice-to-have. It is due diligence.

Károly described it as building blocks, including personality analysis and internal motivation. The point is not to label people. The point is to see how the team works together, where the gaps are, and what risks exist.

Every team has gaps. That is normal.

The risk is not the gap. The risk is not knowing the gap and pretending it is not there.

Once we see the gap, we build an action plan to mitigate it. That can mean hiring. Role shifts. Advisory structure. Bringing in a CEO. Adding a commercial lead. Adding regulatory capability. Bringing in an operator who has been there before.

In Central and Eastern Europe, mindset is often the first filter.

Are you open to commercialization?
Are you willing to accept help?
Are you willing to change roles if it helps the company?
Are you willing to build with people who bring different strengths?

If the answer is yes, progress becomes possible fast. If the answer is no, forcing it only wastes time.

Step 3: Define the North Star and build a roadmap with unambiguous milestones

Deep tech needs a North Star that is ambitious and measurable.

Then it needs a roadmap that is not poetry.

Each milestone needs a definition that cannot be misread. It needs quality criteria, timing, and ownership. It needs to show what gets unlocked next.

This is where we push teams to be precise, because precision protects relationships. It protects investors from surprises. It protects founders from misunderstandings.

You do not want a debate later about what “milestone achieved” means. You want alignment early.

Step 4: Two questions that create clarity fast

Károly shared a tool I love because it cuts through noise.

The first question is: if money and resources were not a problem, what would you do?

This helps teams dream properly. It helps them articulate the real path without self-censorship. It is also a mindset nudge. In parts of Europe, people have learned to dream small because the system trained them to wait.

Then the second question: what can you achieve from that plan without money?

This is where reality becomes empowering. Many value-creating moves do not require big funding. They require focus and action.

When teams see this, the story shifts. They stop waiting for funding as permission to start. They start delivering.

Delivery creates traction. Traction builds confidence. Confidence creates a narrative that investors can trust.

Step 5: Build the ecosystem around the company

Deep tech is not a solo sport.

It needs lab access, clinical validation, regulatory capability, and people who have built companies before.

We talked about lab infrastructure in the conversation. There is a real link between lab access and the ability to build high-quality biotech and medtech startups. In Central and Eastern Europe, basic infrastructure can be a constraint. Teams can wait years for equipment or capacity, which slows validation and kills momentum.

The answer is rarely “own everything”. The answer is collaboration.

Peter shared something I see as well. When you connect the right partners across countries, companies can save years. A lab in one region might have capacity sitting unused. A team in another region might need exactly that. Without a bridge, they never meet.

This is why we build ecosystems, not only deals.

We also discussed operators. In the US, entrepreneur-in-residence models are common. In Central and Eastern Europe, there are fewer exited operators to plug in. That means you need to scout earlier, build relationships early, and be ready to merge experience into teams before the moment of crisis.

If you wait until the moment you need it, you are too late.

What I want investors to take from this

European deep tech is undervalued. The opportunity is real.

But I would not invest based only on “great science” or “great story”.

I would look for alignment across four things:

IP clarity.
Team design.
Milestone discipline.
Real market pull.

The biggest bottleneck shows up where IP clarity, team design, milestone discipline, and real market pull fail to line up at the same time.

When these line up, a team becomes investable. Not because they are perfect, but because they are structured for execution.

When these do not line up, the company stays stuck between research and market, no matter how strong the lab work is.

What I want founders and researchers to take from this

You do not need to become a different person.

You do not need to turn into a salesperson overnight.

But you do need a system around your work that makes delivery possible.

That means role clarity. It means being honest about gaps. It means getting the boring part right. It means defining milestones so clearly that trust has room to grow.

Life is too short to build something meaningful that never reaches the world.

So we build the bridge. Step by step. With people who care. With systems that make delivery possible.

That is how we fix it.

Timecode:

00:00 Introduction and Meeting the Guests

00:16 Challenges Faced by European Startups

04:44 The Importance of Mindset in Commercialization

07:43 Building Effective Teams for Startups

14:04 Investment Challenges and Opportunities

17:15 The Role of Clear Goals and Milestones

21:40 The Investor's Perspective

25:26 Introduction to Portfolio Companies

25:45 The Need for New Investment Models

26:05 Technological Boom and Efficiency

26:29 Building Companies for Impact

27:30 Challenges in Deep Tech Investment

27:50 Value-Driven Founders

29:12 Operational Models and Risk Mitigation

30:50 Identifying Good Partners

32:55 Scaling Up and Future Goals

33:43 Investor and Founder Dynamics

37:09 Cultural Differences in Startups

46:40 Lab Space and Resource Challenges

49:39 Networking and Collaboration

51:57 Preparing for Global Markets

Links:

Uniprisma: https://uniprisma.com/

Meijer & Co.: https://meijerandco.com/

Personal Website: https://www.thijmenmeijer.com/

Guests:

Peter M. Kovacs Personal Website:https://www.petermkovacs.com/

Károly Szántó Personal Website: https://www.karolyszanto.com/

Transcript:

Peter M Kovacs: So nice to meet you here, guys. Karoly, very nice to meet you here again, and Thijmen, very nice to meet you again after our recent podcast. I'm very happy that you accepted this invitation and I'm very happy to discuss with you about the gaps at startup companies. They are suffering because, within Europe, there are a lot of talented startups and entrepreneurs, but they never reach the visibility and the exit level.

In Asia, there is a lot of capital, but they still never meet. I would like to find the main root cause why this is happening, but more importantly, I would like to discuss today how we can help these companies. UniPrisma Venture Studio and PMK Group, as a clinical validation and investment firm—how can we really support and change this old-fashioned model to make it a bit more effective?

So starting at the very beginning: why is it so difficult for a startup company to reach this visibility level where they can attract investors or any partners—not even investors, just any collaboration partners? What do you see based on your experience over the past few decades? Why is it so difficult? If I'm an entrepreneur with a very good idea—it could be a Nobel Prize or a unicorn company—why is that happening to me? Why can I not reach any of these two?

Károly Szántó: Thanks for the invitation, first of all. Good to be back with you. Maybe today we can recap on our partnership and what we have achieved so far. Answering your question, we just lately learned about some statistics which show that only 22% of European university spinoffs are funded by venture capital, which means the rest don't even reach the level of becoming venture capital fundable or investment-ready. There's a huge gap, and when you think about it, it's also a huge opportunity. If you fix what's missing, then Europe can really outperform many other regions.

Peter M Kovacs: But I can expect this 22% to have a huge imbalance between Western Europe, Northern countries, and Central Eastern Europe. Currently, we are focusing our collaboration on Central European countries and startups coming from these countries. I guess that this 22% is even much lower in these regions.

Thijmen Meijer: Indeed. And also what Karoly said, this 22% is really about getting from a proof of concept into a proper entity and defining the go-to-market strategy—not just how to spin it off from the university, but also how to get it ready for the commercial markets. I think that's also where the key difference is.

Károly Szántó: The other aspect is that we are talking about signals from the market and trying to understand the patterns of what's happening. One very strong signal is that the European Union has assembled, or is in the motion of assembling, a 500 million euro fund for the growth stage of deep tech companies. Most deep tech companies originate from a university. The problem is on a system level. Central and Eastern Europe is behind the average, and all efforts are focused on the ability to commercialize. We have outstanding research in Europe, even in Central and Eastern Europe—great researchers, great scientists, great universities—but somehow they don't find the way to commercialize.

Peter M Kovacs: So we are developing a lot of things which are not completely useless, but aren't really what the market needs. It’s more interesting than useful.

Károly Szántó: Exactly. There are several components to this problem, but my favorite topic is the mindset. We have a cultural heritage in Eastern Europe of waiting for somebody else to make things happen. When you are in the academic bubble, it happens even more strongly because the KPIs and incentives on the research part are publications—very different KPIs than in the market.

Whereas in the US, or in some of the universities that are doing a good job in spinoffs like Cambridge, Oxford, or Munich, they have a pattern and a playbook on how to commercialize, and they have a huge advantage in terms of culture. The base value from where you start to convince a researcher that they need to commercialize is on a much lower level here. For us, we have to assess the team first. It's usually not so much around the skills first, but more on the mindset: are you open? Are you ready to make money from your work?

Peter M Kovacs: Thijmen, you are very strong in the HR field. Is it possible to change this mindset? Is it age-dependent?

Thijmen Meijer: The mindset is first, indeed. There's a different kind of mindset in Europe than in the US, for instance, and definitely different in Central Eastern Europe, where commercialization is almost a dirty word in the research world. Especially in healthcare, they would rather have a publication in Nature than bring it to the market. Then there is the other way around: founders who are keen to bring it to the market but don't have the skillset or competence. They feel they can do it by themselves, but they don't have the ability to take it from zero to one. This is also a mindset issue on a different note: they don't want to have somebody above them. We see that certain founders need a CEO on top of them, not the other way around.

Peter M Kovacs: I recommend many times that great scientists and founders are not necessarily good CEOs because it's a completely different mindset and knowledge set. Usually, we ask them not to step back—it’s not a step back—but to change roles. This gives the possibility for a business-oriented person to become CEO, and the founder becomes the CMO (Chief Medical Officer) or CTO. They do what they are best at, and the CEO brings success to the market.

It's a very common problem everywhere, but maybe in Central Europe, it’s even bigger. Based on our history, we didn't have the chance to learn how to do it yet. But as you mentioned, it's a big opportunity for our collaboration because there are so many good talents. We cannot help everybody, but hopefully, we can find good examples. Could you explain in more detail what the steps are from the beginning? When you find a talented person or a good asset, how do you plan to build them up?

Thijmen Meijer: It should start with the proof of concept and how the patent or IP rights are held within the company. Is it with the university, the founder, or the researcher? What kind of rights does the university have? This makes it investible from a commercial perspective as well. Then afterwards, we need to see the key competencies within the core team and where the gap is. We need to get to know each other to understand the skills within the team. As we saw with one startup last week, they already sensed a gap, but it was not clearly described. With our tools and expertise, we really brought it to the surface.

Peter M Kovacs: Is this evaluation part of your due diligence process or just an initial evaluation to see if it’s a go/no-go?

Károly Szántó: It's part of the due diligence and it has building blocks. One building block is personality analysis. Once that's done, we see how these different characters and people work together. Where is the gap? There is always a gap; it's okay to have one, but it's not okay to not know about it. Basically, what we are doing is identifying risks and then mitigating them with an action plan.

On the team side, we look at internal motivation and personality types. Then we take a deep look at the business plan. What are the milestones, and if they are reached, where does it lead us? Is there a clear North Star? Is it measurable in time and quality? Our goal is to help the team and the investor have the right framework and narrative to create a very clear, concise story so that we all speak the same language.

In my experience, most teams have some kind of KPIs or milestones, but very few can define them crystal clear. It is a very dangerous thing because once they are there, they will write a report proudly presenting to the investor that they reached Milestone 3. But when you dig into it, you see they only met the goals partially. It's a matter of definition. It's better to invest the time at the beginning to avoid such debates later. One thing we are doing is helping—and at the same time, pressuring—the team to have these goals clearly defined.

Thijmen Meijer: I cannot say it better.

Peter M Kovacs: How do you see the investment part? Many founders complain they could reach exit potential easily if they got enough funding, but I don't really think so. In the last year or two, times have been more difficult for startups. Investment volume hasn't necessarily decreased, but the number of companies invested in is much lower. This means bigger ticket sizes going to a smaller group of companies.

University spinoffs and small startups at lower levels have become further away from accessing venture capitalists. Most were relying on research grants which are shrinking year to year, especially in Central Eastern Europe as EU funding reached certain economy levels. Is the lack of access to investment the main reason they cannot move forward, or is it just a part of it?

Thijmen Meijer: I think it's what we already said: having a proper team and knowing your gaps, especially on the roadmap to the North Star. Investors are looking for "smart money" and professional partners who know exactly how to utilize the funds, not just a bulk load of money with a high burn rate and hoping for the best. Money is not free anymore. We believe that with a proper plan and a roadmap that is crystal clear on a granular level, that is the way to go.

Károly Szántó: Adding to that, most founders—and this relates to the commercializing bottleneck—are not aware of what really matters for an investor and for the market. Discussion often starts by asking them to throw everything they think is valuable on the table, and then we help them sort out the values that actually matter. That is often surprising for them. It’s a delicate discussion because we don't want to offend them, but I always say it’s better if you get offended with me than to have a harsh discussion and failure with an investor.

There are two questions, seemingly contradictory, that we apply to help them get out of their mindset bubble. One question that does wonders is: "What would you do if you had all the resources? Money is no issue. What's the best way to go about it?" It's actually not easy in Eastern Europe to get people to dream big; you need to nudge them. But once they get there, they draw a big dream on the table.

Then comes the next question: "What could we achieve out of this big dream which doesn't require money?" Then comes clarity. They discover that many of those things they want to achieve that are valuable for the market don't really cost money. They discover clarity and have to be flexible to twist the story around. It creates traction, which creates value, and company valuation goes up.

Peter M Kovacs: If the company, with our help, realizes and solves these gaps together with the founders, they have a much better chance to get access to funding?

Thijmen Meijer: By knowing yourself, you definitely know where the gaps are. When you know the team, you can do an organizational design later and get a much better understanding of where you are. Maybe you don't need an extra marketing hire because you already have that talent internally.

Peter M Kovacs: So you feel that when you solve these gaps, you build a stronger team with a clear vision, making it easier to get access to funding?

Thijmen Meijer: Absolutely. It’s not foolproof, but it’s a significantly higher chance.

Károly Szántó: One thing: I spent a decade in venture capital and sat on the side where startups were pitching me. One of my guilty pleasures is to ask other investors how fast they actually decide if they want to invest. Most experienced investors make decisions very quickly—the "gut feeling" decision, which is always followed by thorough due diligence to double-check that intuition. But without our preparation, many startups would fail in the first five minutes. You need to be concise and focused to have a compelling story within the first three minutes; otherwise, you don't get the second five minutes.

It's not very difficult to convince an investor if your goal is not to convince the investor. The good goal is to be very focused on how you actually create value and return. If you have a good story on that, you don't need to convince anybody. In our culture, when I read startup news, I rarely read success stories like reaching 2 million euros in ARR; what you read is "we got investment."

Peter M Kovacs: Which shouldn't be the news at all.

Károly Szántó: Exactly. The main news should be that we made a huge impact or improved the lives of millions.

Thijmen Meijer: And just to add to that: what you are mostly investing in is deep tech. Biotech and medtech founders are not typical B2B SaaS guys. They are really good at the research and the science, but not so much at preparing for investors.

Peter M Kovacs: I hope we can prove this is a good opportunity. We started with two portfolio companies and are increasing this number quickly. I always thought about disruptive models because the current conservative investment model is not working. Efficiency is more important than before; there is not enough money in the world to sponsor all companies. We should find the more efficient way of investment—investment is just the last piece. We are not developing companies just for an IPO or an exit only to have the company end up in the trash. It’s important to select companies that make a human impact, especially in healthcare. Do you focus on social impact when listening to a pitch?

Thijmen Meijer: That's why we are in biotech and medtech—not another B2B CRM. We are keen to thrive in this market where deep tech in Europe is undervalued.

Károly Szántó: I think all three of us feel that life is too short to work without true impact. When you are doing something value-driven, it comes across. We want to make money—it's not a charity—but we want to do it by creating value. Peter, your model as a clinical researcher offering infrastructure, validation, and a clinical roadmap together with investment is an execution-centered model mitigating risk. Our joint value proposition is very strong and pragmatic.

Peter M Kovacs: If someone is only focused on the ticket size and doesn't care about the partnering, I already know it's not a good fit. It will be the first and last discussion. There is a lot of "dumb money" in Asia coming from real estate, but medtech and biotech are so sophisticated. If someone doesn't understand why the failure rate is high or why it takes eight years, we cannot explain risk mitigation to them. I see clearly in Asian markets that the majority don't understand; they focus on simpler investments. But governmental agencies and big universities often understand even more than private VCs or angel investors.

We need clear oversight because our time and resources are limited. Our target is about 30 startup companies in the next few years. I think this is a feasible and lucky group.

Károly Szántó: In all fairness, some founders have bad experiences with investors. We met a startup where they only talked about money at first, but when we kept asking, it turned out they had a much more valuable story to tell. They had to learn that we aren't just about ticket sizes. Investors who don't add value have miseducated the founder community to only talk about IRR and exit timelines. They learn to keep research and regulatory topics for internal discussions so they don't "bore" the investor. We need to help them release those right topics.

Thijmen Meijer: I love when investors say, "If a founder cannot do the sales themselves, I don't invest," which basically eliminates all university spinoffs. We like to address that. If the researcher cannot do sales, we can find the finance guy, the marketing guy, and the salesperson to put next to them.

Károly Szántó: Talking about that, where do you actually find those people? In the US, it’s easy to identify "entrepreneurs in residence"—an exited entrepreneur who knows the way. In Central and Eastern Europe, good luck with that. That’s when our network kicks in. We need to actively scout for people in broader Europe who have been there and done that. The best VCs build a community of co-investors, academic partners, and corporate partners.

It takes time and face time to build that trust. Our long-term goal should be this. We need to identify entrepreneurs who are currently running a great medtech startup and are a few years away from an exit. We need to build rapport now before they are bored and looking for the next gig.

Peter M Kovacs: How do you see the potential of Central European startups compared to the US or Asia? Most big minds arrive in the US from Europe; European science has the most Nobel Prizes and best results. But the ecosystem is not working efficiently. Asian markets are coming up quickly with a lot of money, but they are newborns in this field and still learning to use it. US has almost everything but lacks good talent. How can we connect startups here to pick the benefits from Asia and the US?

Károly Szántó: In Asia, the work ethic is on a whole new level—the service level and responsibility for speed and quality is something we can't even grasp. In the US, commercialization capability is next to none. Europe’s strength is a creative mindset, tackling problems in unusual ways. We need to learn from the work ethics of Asia and the commercialization of the US. You don't have time to pick up this culture in a year while running a startup.

The realistic scenario is to scout for partners and entrepreneurs to merge that culture into the team. If you put a startup from Budapest into Boston or Seoul without support, they will suffer because of the culture gap. In the US, you need to be 100 times braver. In Asia, you need to up your game in delivering quality service.

Thijmen Meijer: Regarding mindset, you cannot change a nation or a continent. We cannot have that born-competitive edge the US has. But I read an article about the connection between biotech startups and lab space. They could see that more lab space results in more high-quality startups. What do you think about that?

Peter M Kovacs: In Central Eastern Europe, there is a very significant correlation. Lack of resources is strong in preclinical and laboratory science. I studied at a medical university and worked with science universities in Hungary, and I saw them waiting years just to buy a machine to measure something. Even if you have a patent, you lose years of time.

In Singapore, the government builds huge laboratory buildings and provides them to startups for free or at a low price. This shows that lab access is vital for early-stage startups. However, I made the mistake in my previous experience of spending too much money on infrastructure and I lost everything during COVID. I realized it’s an expensive lesson: you don't need to own it. I can collaborate with different stakeholders much more effectively and spend much less money. If you don't have lab space, you have to find another solution for risk mitigation.

Károly Szántó: What happens with a Hungarian startup after the first two years of TR 3-5? When they reach 6-7, I like to ask them: "Are you prepared to live in another country if needed?" It's better to know in advance. Many confident teams from this region lose their confidence when I take them to Scandinavia or the UK for investor meetings. They become shy and talk through me. There is a lot to do in terms of strengthening their narrative and building up confidence before they move out. We need to hire entrepreneurs early enough—at least a year before going to market—to mix the culture and build the narrative so they are efficient when the time comes.