In increasing numbers, European financiers are shrugging off their traditional conservatism and discovering the definition of venture capital that their U.S. cousins have always embraced taking a chance on an unproven idea or technology. To be sure, the spirit of risk taking varies from country to country—the U.K. is much more daring than West Germany, for example. But according to accounting firm Peat Marwick McLintock, last year—for the first time ever—there was more venture capital available in Europe then in the US. ($4.3 billion vs. $4.2 billion). And these funds are footing the bill for more and more European high-tech startups.

Entrepreneurism has long been stifeld in Europe by high taxes and a staunch aversion to risky business. “Ten years ago we did a study of young technology-based firms in the U.K. and Germany, and could find hardly any examples, recalls Kamel Saad, vice president of Arthur D. Little Inc....

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