Reduce Welfare / Entitlements

Regulation is the symptom - no doubt nasty - but not the cause.

The sole reason the US startup ecosystem thrives and the rest of the world doesn't is skin in the game. Reward is proportional to risk, it's like a law of physics. If the downside is capped, so is the upside.

With stringent employment laws and a cushy safety net to fall back into in major EU jurisdictions in case the venture doesn't succeed there's just not much skin in the game for founders and early employees. “Or else” is not a personally physically scary question in most of Europe. It is in the US. And this is precisely why the Valley is the Valley. The rock bottom is in plain sight and there's no one but yourself who can save you from it.

Capital flows to high-stakes operators, not the other way around. The VC ecosystem is the embodiment of free-market risk management without artificial limitations. But regulation and welfare are two sides of the same coin. What looks like excessive regulation to many people is also providing implicit social security guarantees - often to the very same people who push against regulation! Not possible to have it both ways unfortunately.