First, a figure that should inspire pride: 63 percent of Swiss venture capital flows into deep tech, into robotics, semiconductors, biotech and new materials. No other country comes close to such a high share; China stands at 56 percent, the United States at 54 percent.

The other figures: In early-stage rounds up to CHF 15 million, around 36 percent of the capital comes from Swiss investors; in rounds of CHF 100 million and above, less than a fifth. 

Value Creation Follows Capital

In other words: we finance research with tax money, we bring forth the founders, and we bear the risk of the first few years. The moment that risk turns into economic value, others step in. 

“Top investors come because something is being created here that is sought after worldwide.”

Too often, capital is followed over time by a share of entrepreneurial value creation as well, from decision-making functions to jobs. 

This is not an accusation against foreign investors. Top investors such as Sequoia & Co. come because something is being created here that is sought after worldwide. The question is directed inward.

Switzerland Lags Behind the European Average

Occupational pensions manage around CHF 1,200 billion. Private equity including venture capital accounted for just 1.5 percent of that in 2024. 

In the category for unlisted Swiss investments created in 2022, which would allow up to 5 percent, the share is estimated to be in the per mille range (venture capital alone can hardly be quantified precisely because many pension funds do not report it separately). 

“Patriotism is not an investment criterion here, and it should not be.”

In Europe, around 8 percent of risk capital comes from pension funds, 14 percent in the UK, 22 percent in Sweden; Switzerland lags behind the European average. 

Venture Capital: A Long-Term Commitment

Patriotism is not an investment criterion here, and it should not be. A pension fund has a single mandate: to secure the pensions of its insured members. 

Anyone who concludes from these figures that there is a lack of foresight in the governing bodies is oversimplifying. The restraint was rational, and its reasons should be acknowledged before they are removed. There are essentially three:

• The first is assessability: This asset class requires judgment on managers, fund structures and portfolio construction, and thus specialized knowledge that is not always available in-house, especially for medium-sized pension institutions. Anyone who wanted to acquire this knowledge quickly ended up with a provider that also wanted to sell a fund. So perhaps what was lacking was not willingness, but a neutral place.
• The second is illiquidity: Whoever invests remains tied up for years, and this must fit the pension fund’s liquidity needs. But it is worth viewing this from the other side: with their long-term liability profile, pension funds are among the few investors that can in principle bear such investment horizons. Especially in areas such as robotics, semiconductors or biotech, building successful companies takes time. This long-term capital need can fit well with a pension fund’s investment horizon.

“A benchmark is not a promise.”

• The third reason: the high costs. What matters, however, is the net return left for investors after these costs. For a long time, Switzerland lacked a reliable basis for comparison precisely for this reason. Since December 2025, it has been available for the first time: the University of Basel, SECA and our foundation have systematically examined the returns of Swiss VC funds. A simulated fund-of-funds strategy across the vintages from 2014 to 2020 produces an annualized return of 14 percent with a TVPI of 1.5. Overall, the Swiss VC funds studied are on par with the European benchmark; the younger vintages from 2020 to 2024 are even performing better in the comparison so far.

A benchmark is not a promise. The dispersion between funds is particularly wide in venture capital, and manager selection has a decisive influence on the outcome. Precisely for that reason, the knowledge comes before allocation, not after.

Risk Capital: The Quota is Not the Decisive Question

That this challenge is not uniquely Swiss is shown by a look at Brussels. This autumn, the European Parliament is debating a proposal under which larger pension institutions would in future have to hold at least 2 percent of their assets in risk capital. The aim is to mobilize more institutional capital to finance European companies. The proposal is controversial and its outcome remains open. 

The criticism of it is justified: capital that must be invested by a certain date because of a quota risks not being allocated according to the same criteria as capital invested as part of a long-term investment strategy. 

Only one half of the discussion tends to get short shrift: a pension institution that carefully integrates venture capital into its investment strategy and consistently selects managers can thereby aim for both attractive long-term returns for its insured members and contribute to financing domestic innovation and growth. One can debate the instrument of a “quota.” There is far less room for debate about the need to engage seriously with the asset class. 

The Case for the Swiss Approach

So coercion after all? The Swiss way – voluntariness instead of prescribed quotas, and responsibility in the relevant bodies – deserves the preference in my view. What is needed for this is unspectacular and lies for the most part with us ourselves.

• First, judgment within the governing bodies. This includes a robust basis for comparing returns, which is now available for the first time with the new Swiss study. And a place to learn where nobody is selling anything: together with the Università della Svizzera italiana and Professor Laurent Frésard, we are running a training program for pension governing bodies, this year in Zurich and Lausanne.
• Second, institutionally suitable investment vehicles are needed: diversified, professionally managed, with appropriate costs and tailored to the governance requirements of pension funds. Our foundation helps create precisely such suitable vehicles. 
• Third, access to the asset class must fit the respective pension fund. Venture capital is not a uniform segment. A broadly diversified fund-of-funds provides access to different managers, sectors and development stages and can therefore also cover early-stage innovation. A vehicle more focused on the growth stage starts later: with companies that already have customers, revenue and an operating history, and whose development is therefore easier to assess. The two approaches can complement each other well in a portfolio. 

The decision not to invest remains legitimate. It should simply no longer fail because the basics are missing. 

Over the past twenty years, Switzerland has built an ecosystem that Europe envies us for – without a single franc of state venture capital. It would be bitter if, in the end, we paid for the research and exported the returns.

Joanne Sieber is CEO of the Deep Tech Nation Switzerland Foundation.

Read all our guest authors’ previous articles here.