"Regulatory friction" is holding back European startups, according to a new study published by payments firm Stripe.
Conducted among nearly 200 Stripe users, the report examines the entrepreneurial experience in Europe from the perspective of Internet businesses.
It aggregates their views on how policies and regulations act as enablers and barriers to growth.
A third of start-upssurveyedsaid they considered doing business outside Europe because they called it a "compliance burden".
Matt Henderson, head of international operations at Stripe, said: "As tech builders across Europe face an increasingly difficult economic environment, it is more important than ever to listen to the voices and needs of the startup community."
"We want to hear directly from businesses using Stripe as the next generation of European tech leaders to better understand the realities they face and identify key barriers to growth," he added.
The study found that 73% believe that the depth and availability of talent and education in Europe is an advantage compared to other markets.
At the same time, more than half of the respondents cited the geographic proximity of different markets as an advantage of the speed and convenience it offers companies.
Still, more than half of respondents said time spent on compliance processes was the biggest threat to their business from regulation, and more than three-quarters said time spent on compliance had increased .
The study also highlights a growing disconnect betweenstartupsand policymakers.
While 83% of respondents said policymaking was aimed at established companies, only 12% felt that policymakers understood the reality they faced.
