'Regulatory friction' is hampering the growth of European start-ups, according to new research published by payments company Stripe.
The report, which was conducted among nearly 200 Stripe users, examines the European start-up experience from the view of internet businesses.
It compiles their views on how policy and regulation is acting as both an enabler and barrier to growth.
One in three start-ups surveyed said they have considered launching their business outside of Europe, due to the scale of what they described as the 'compliance burden'.
"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," said Matt Henderson, international business lead at Stripe.
"We wanted to hear directly from businesses using Stripe, as the future generation of European tech leaders, to better understand the realities they’re facing and identify the main obstacles to growth," he added.
The research finds that 73% believe that the depth and availability of talent and the level of education in Europe is an advantage compared to other markets.
Meanwhile, more than half of those surveyed cite the geographical proximity of different markets as an advantage for both the speed and convenience it enables companies.
Despite this, over half of respondents say time spent adhering to compliance processes is the greatest threat regulation poses to their businesses, with over three quarters stating that the time spent on compliance has increased.
The research also highlights the growing disconnect between startups and policymakers.
83% of respondents say policymaking is geared towards established companies, and only 12% believe that policymakers understand the realities they are facing.
