NEW YORK -- For five years, Claudia Alsdorf ran a start-up software company in Berlin. But after closing its doors in September, she says she isn't going to try that again soon.
"It was fun and I really believed in what we were trying to do," explains Ms. Alsdorf, whose company, Echtzeit AG, made three-dimensional animation software. "But now I'd think I could learn a lot working in a big company."
In December the former chief executive took a public-relations job at SAP AG, becoming one of 28,000 employees.
Ms. Alsdorf's career switch is the same one scores of former entrepreneurs are making all across Europe, raising concerns that the collapse of the New Economy has also smothered the region's entrepreneurial spirit.
The strong start-up culture of the U.S. is something Europe has longed for in hopes of creating jobs and a more dynamic economy. It seemed to have reached that goal two years ago when hundreds of companies were springing up amid the Internet euphoria. But now that the trend has ground to a halt, it is clear Europe has more work to do -- on education, financial markets and social attitudes -- to foster the go-it-alone spirit.
The U.S. education system, especially in colleges and universities, creates a highly competitive environment that helps engender the drive needed to start a company, says Klaus Schwab, founder of the World Economic Forum. Creating a more vibrant European economy is one of the main topics at the forum's annual meeting earlier this month in New York.
The sometimes cutthroat atmosphere at U.S. business schools "has a major impact on people's approach to life," Mr. Schwab says. In Europe, "you feel as if you're taken care of. You do the minimum. In the States, you couldn't get away with that."
Access to financing is another barrier. Although venture capital is more widely available in Europe now than five years ago, it is still tighter than in the U.S. And in the current economic climate, it is almost impossible to get backing for a new idea now, especially in Germany, Ms. Alsdorf says.
"I would never try to start a company in Germany again," the 35-year old says. "Maybe in the U.S. But in Germany, most of the time you have to go to a bank to get money, and if I go to a bank, I am personally responsible for paying it back. Would you take that risk?"
Europe also takes a less understanding view of entrepreneurs whose start-ups failed. "There's a stigma," says Helene Press, who now works at a Munich bank after working at a now-defunct company that developed Internet software for publishing companies.
How bad is it? Well, one entrepreneur who started an online retailer described problems facing European start-ups for nearly 30 minutes before saying he didn't want his name published. "Some newspapers have written a lot of bad things about me and the company. I don't want that to start again."
While start-up activity has dropped sharply, some people expect a quick revival once the economy picks up.
"You'd be crazy to quit a job at a big company to go out on your own right now," says Rainer Riess, director of the Neuer Markt, the growth stock segment of the Frankfurt stock Exchange. Two years ago it was hosting dozens of initial public offerings a month.
"People may have stopped starting companies for now, but the number of people who think about doing it is far greater than five years ago," Mr. Riess says. "The cultural change is still there."
Indeed, just ask Charles Fallon. Last year he sold the Internet pet-supply retailer founded in 1997, but now he has a new venture -- a company that restructures struggling start-ups. And business is strong he says.
"There are a lot of people out there who don't want to give up," he says.
--Bob Davis contributed to this article.
