# The Explanation Gap | Deriss Canonical: https://deriss.com/articles/the-explanation-gap Description: Europe has learned to fund deep tech. It has not learned to explain it. A field-grounded account of the startup-to-scaleup transition. --- I spent this spring in a room with deep tech founders. It was Sting's Deep Tech Test Drive — three evenings and a pitch session, run with Kista Science City, RISE and KTH, for teams at the stage where an idea is becoming a company. I was there as a participant, not an observer, which is the only reason I noticed what I noticed. The technology held up. Almost every time. The explanation didn't. Founder after founder could describe what they had built to another engineer and lose the room entirely when the listener changed. Not because the work was weak — because nobody had yet done the second piece of work, which is turning a technical fact into something a customer, an investor or a procurement officer can act on. That gap has a cost, and it gets more expensive later. ## The gap is a transition, not a stage The instinct is to describe this in funding terms — a Series A problem, a Series B problem. That framing is wrong, and a coach who has seen four hundred companies corrected me on it. The real marker is organisational. It's the moment a company stops being small enough for the founder to be the explanation. Early on, the founder is the interface. They pitch, they sell, they hire, they answer the hard question in the room. The story doesn't need to exist outside their head, because their head is always present. Then the company grows, and the founder stops scaling. Salespeople need something they can be taught. Recruiters need a reason for someone to leave a stable job. Procurement needs language that survives a committee. A board needs a sentence. Suddenly the story has to exist as infrastructure — written down, transmissible, consistent across four audiences who each need a different version of the same truth. Most companies discover at this exact point that they never wrote it down. There was never a reason to. That's the startup-to-scaleup transition, and it's where the explanation gap becomes a growth constraint rather than an inconvenience. ## What it looks like from outside [Sting's own progress report](https://www.sting.co/progress-report-24-25) gives a picture of the scale involved: around 350 active companies, €641 million in combined revenue in 2024, €1.23 billion raised to date. This is not a marginal population. Look at how the transition reads in public. One company in that portfolio is described — in Sting's own words — as having "originally founded to make Wi-Fi access universal," and having since "evolved into a global platform bridging digital access gaps and enabling smarter connectivity." Read those two halves again. The first is concrete: you can picture it, and you know immediately whether you want it. The second is true, broader, more valuable — and almost impossible to hold in your head. That isn't sloppy writing. It's what happens when a company genuinely outgrows its founding story and the new one hasn't been built yet. The company grew 516% that year. The language is running behind the business, which is the normal direction. Another raised €45 million against €2.4 million of revenue, building software-defined satellites and positioning itself as sovereign European infrastructure. In a company like that, almost the entire valuation rests on a position rather than a product. The story isn't marketing. It's the asset. Neither of these is a failure. They're both what success looks like in the middle of the transition — and both illustrate that at this stage the explanation is doing commercial work, not decorative work. ## Why this is a European problem specifically In August 2026 the European Commission finalised the [Scaleup Europe Fund](https://eic.ec.europa.eu/eic-fund/scaleup-europe-fund_en): €5 billion, managed by EQT, sitting inside the European Innovation Council Fund. Its stated purpose is to address the phase ["when a start-up has already validated its business model but requires substantial capital to expand, industrialise its technologies and compete internationally."](https://ec.europa.eu/commission/presscorner/detail/en/ip_26_1102) That is a policy admission. Europe has built decent machinery for beginnings and thinner machinery for scale — and the Scaleup Europe Fund is a €5 billion response to the second half of that sentence. It is worth being precise about where the money sits, because the two ends of this thesis are often blurred. Scaleup Europe deploys into companies that have already validated and now need to industrialise. Early-stage deeptech funds — Turbine Capital in Stockholm, at €75 million, is a recent example — work the stage before that. Same argument about European capability, opposite ends of the pipeline. The transition described in this piece sits between them, which is precisely why it goes unattended: it is nobody's stage. Capital is one half of the problem. The other half is legibility. European deep tech increasingly sells into a specific set of buyers: public institutions, defence and dual-use programmes, industrial partners, regulated sectors, and the funds channelling sovereign money into all of them. Those buyers do not respond to product demos. They need to understand strategic relevance, and they need it in writing, in language that survives being forwarded to someone who wasn't in the room. A company that can only explain itself to specialists is not fundable at that level, regardless of how good the technology is. And there is a newer layer. Customer discovery is moving from search engines to AI assistants, which do not browse — they answer. Whether a company is surfaced and cited now depends on whether its own material is coherent enough for a machine to interpret. An organisation that cannot explain itself to a person will not be explained correctly by a model either. The failure compounds quietly, and by the time it shows up in pipeline it looks like a demand problem. ## What actually fixes it Not a rebrand. Rebrands treat this as an aesthetic problem, and it isn't. The work is closer to translation than to design. It means deciding what is true about the company at its new size, then building four versions of that truth — customer, investor, recruit, procurement — that don't contradict each other. It means writing it down in a form other people can carry, so the founder stops being a single point of failure. And it means doing it early enough that the sales hire, the fundraise and the first institutional tender aren't all learning the story separately and getting it slightly wrong three different ways. It is not expensive relative to what it protects. It is only urgent after it's late. --- Sources: [Sting Progress Report 24/25](https://www.sting.co/progress-report-24-25); [European Commission press materials on the Scaleup Europe Fund, May and August 2026](https://ec.europa.eu/commission/presscorner/detail/en/ip_26_1102); [EIC Scaleup Europe Fund](https://eic.ec.europa.eu/eic-fund/scaleup-europe-fund_en).