The problems startups in Europe face are not really startup problems, but service sector problems. The single market is well integrated when it comes to goods, but not at all integrated when it comes to services. Any company offering services in multiple EU countries will have to deal with a maze of regulation. This makes it hard to scale. Software companies rely on scale to achieve profitability, so EU software companies have it tough.

There are additional problems with capital markets, but this is partly also a consequence of differing national legislation. Europe has astoundingly many stock markets. Most brokers won't even give you access to half. EU capital markets would be much more robust if the EU only had two (significant ones), like the US.

In a survey that The Economist looked at, EU companies aren't really very worried about language or culture. It's all the different national regulations that are the problem.