A few years ago, the AM industry was at the very peak of the hype curve. Venture capital was pumping hundreds of millions of dollars into it, expecting spectacular returns.
Companies like Desktop Metal, Nexa3D, Shapeways, or Velo3D became the symbols of this frenzy. They had it all: big-name investors, SPAC listings, and above all - the narrative of a “manufacturing revolution.”
But once the dust settled, the void beneath became visible. The “growth at all costs” models burned out spectacularly, leaving behind disappointment and tens of billions of dollars in lost value.
I’ve already written countless articles about this…
But those were mostly about the U.S. and its industry, where VC funding is the natural path for startups. In Europe and other parts of the world, the situation looks very different.
In Europe, classical venture capital - based solely on private money - is just one part of the ecosystem. Equally important, if not more so, are public grants.
In the U.S., startups get big VC injections. In Europe, they’re kept alive on a steady IV drip of EU grants.
The result? The high feels different, but the addiction is just as destructive.
The European innovation theater – how grants create the illusion of success
The mechanism of grant-dependent companies is almost textbook. It starts with hiring a specialist - either in-house or external - whose only real skill is writing grant applications.
Company strategy isn’t shaped in meetings with customers but in the office, over analysis of the guidelines for the next call for proposals.
Products and roadmaps are adapted not to market needs but to the point-based criteria of a given program or competition.
The next step is building consortia - a formal requirement that leads to artificial alliances between private companies, universities, and research institutes.
On paper, it looks impressive: multidisciplinary teams, international partnerships, synergies between science and business. In practice, it dilutes responsibility and produces projects that live a life of their own, completely detached from real customers.
But the most toxic element is how success is defined:
In a healthy company, success means growing sales, repeat customers, stable revenues, and increasing market share.
In a grant-addicted company, success is a positive review of an application, a signed agreement, and the first funding tranche.
Instead of products customers actually buy, you get technology demonstrators - devices, prototypes, or reports that look great at conferences but never turn commercial.
This phenomenon can be called the “innovation theater”: the scenery, lights, and costumes are dazzling, but behind the stage there’s only emptiness.
Over time, a peculiar organizational culture emerges. The team doesn’t learn how to acquire customers but how to correctly log hours in the system and prepare reports for the funding agency.
The absence of real market pressure dulls vigilance. People stop thinking about how to keep the company alive and instead focus on fitting into bureaucratic evaluation schemes. Financial dependence grows deeper.
The grant ends - so the next application must be written immediately, just to keep the team alive. It’s a vicious circle that kills self-reliance and entrepreneurship.
A global phenomenon - from Brussels to Beijing to Washington
Although Europe is the symbol of the grant-driven system, the problem is global. In the United States, there’s an extensive network of grant programs such as SBIR or STTR, run by the DOE, DOD, or NASA.
Their stated intent is to support breakthrough technologies with strategic importance. But in practice, many firms become experts not in product development but in fulfilling narrowly defined agency requirements. The result: lost flexibility and neglected commercial markets.
Asia shows yet another version of the same mechanism. In China, South Korea, or Singapore, state funds for strategic technologies are counted in billions.
Companies in the AM sector often don’t sell to customers at all but execute programs dictated by state industrial policy. The outcome: overproduction, market saturation, and distorted competition.
One cannot overlook the role of universities and research institutes either. Worldwide, grant hunting has become the primary way to fund research.
University spin-offs often have no real business model—they’re simply formal extensions of a PhD project, kept alive through successive grants. Instead of real companies, you get entities that exist solely to check boxes on reports and deliverables.
Organic growth – the only path to true entrepreneurship
In contrast, there’s a harder but healthier path: organic growth, building a company step by step on real revenues. The key difference lies in validation. If a client pays with their own money, it means the product truly solves their problem. That’s the only honest measure of market value.
A grant or VC investment may create an illusion, but a paid invoice is the ultimate proof.
The absence of external cash injections also enforces financial discipline. Every dollar or euro must be justified, every team member genuinely productive. This fosters a culture of entrepreneurship that embraces hard work, improvisation, and results orientation.
Another advantage is freedom of decision-making. An organically grown company doesn’t have to adapt to program criteria or investor expectations. It’s driven by the market and the founders’ vision, not a bureaucrat’s guidelines or a VC analyst’s Excel sheet.
This allows for the development of niche but stable business models, instead of chasing fashionable buzzwords.
The AM industry’s history knows such examples - often smaller firms that never graced magazine covers or raised hundreds of millions, yet have grown steadily for years by serving narrow market segments.
They don’t need grants or VC because their business model is self-sustaining - customers pay because the value is real.
Grants and venture capital aren’t inherently bad. They can be useful tools if they act as catalysts and remain subordinate to a real business model.
The problem begins when the tool becomes the goal itself - when a company exists only to secure the next grant or the next funding round.
That’s a dead-end road, leading straight into a culture of illusion and financial dependency.