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Europe''s performance in the entrepreneurial arena had been lackluster for the past twenty years. Low economic growth, nascent venture capital communities, inflexible labour laws and bureaucratic interventions were considered to be the reasons for it. Apart from the peripheral countries like Ireland, Finland and Iceland, the number of start-ups in the core Euro-zone had seen a decline until 2002. However, things started looking up, especially in Germany, thanks to bold regulatory reforms ushered in by Chancellor Gerhard Schroeder. There had been a substantial increase in venture capital funding, especially in early-stage investment. This case explores the causes of low performance of Europe in entrepreneurship. It also explains the challenges faced by European entrepreneurs. The case of Germany is described in detail. The case offers scope for discussion on the sustainability of the spurt in the number of start-ups and how the bigger nations can benchmark themselves with countries like Finland and Ireland.