(FORTUNE Magazine) – When Roman Koidl set out in 1993 to found a consulting company to help German retailers focus on convenience--a new concept in a country where service often comes with a snarl--he couldn't get a bank account. Koidl, just 26 years old, had about $30,000 ready to deposit. But no bank would take his money. Come back when the business has $300,000 in annual revenues, Koidl was told. Ten years ago, that might have been the end of the story: He would have quit and joined some large firm. But Koidl kept knocking on doors. Not only did he eventually find a bank, but he also received venture capital. The result: He has launched five companies with combined annual revenues of $5.9 million.

Koidl's saga is emblematic. Entrepreneurship in Europe is more difficult than it needs to be, but opportunity is beckoning. The venture capital market is growing. Investors are flocking to young, fast-growing companies. Microsoft's Bill Gates and SAP's Hasso Plattner are heroes to a new generation. And the euro could be a boon. Not that Europe is morphing into America, with liberty and stock options for all. From 1984 to 1991, the OECD figures that the U.S. established new businesses at four times the rate of France. But cautious optimism has replaced despair.

At the political level, Europe has begun to see entrepreneurs as part of a solution to unemployment rather than as grasping exploiters. There are no better job factories than small businesses. From 1992 to 1996, 85% of all new jobs in the U.S. were created by small firms, and 70% of these by the fastest-growing firms known as gazelles. Europe wants more gazelles; so governments have begun streamlining regulations, legalizing stock options, and even providing loans to startups. To be sure, the buzz takes time to circulate. At Tecoplan, a company outside Munich that develops software to test digital prototypes, the three young owners have offered stock options to their 100-plus workers. But a number say they prefer cash, thank you. "You can't change a whole country overnight," says the exasperated 37-year-old CFO, Andreas Muhlberger.

Still, financing a small business is getting easier. In 1997, European venture capital funds brought in $23 billion, and the total amount spent by private equity firms grew 42%, to $11.3 billion. Britain takes in almost half the total, but other countries are learning: German venture capital investment has increased by 166% since 1991, France by 48%, and Sweden by 758%.

Going public is also a possible dream. The Easdaq, founded in 1996, is Europe's answer to the Nasdaq. Companies can be listed regardless of size or profit history, as long as they agree to international accounting standards and U.S.-style financial reporting. Easdaq also permits cross-listings with Nasdaq. It now lists 37 companies, the aggregate value of which has risen 72%, to $12.6 billion, since 1997.

Not wanting to cede the market for fast-growth company IPOs to Easdaq, traditional exchanges have formed small-cap markets of their own. The Nouveau Marche in Paris, the Neuer Markt in Frankfurt, the NMAX in Amsterdam, and the Euro.NM Belgium in Brussels are linked in a network called Euro.NM, which will eventually allow for easy pan-European trading. Investors have gone gaga for Euro.NM shares, which rose 26% in 1998 on the 74-stock Nouveau Marche and 192% on the 63-stock Neuer Markt. Italy is next. Big profits like these create a virtuous circle, encouraging entrepreneurs to start businesses and investors to invest.

More than finance or regulation, it is a deeply ingrained cultural aversion to risk that stalls entrepreneurship in Europe. The social stigma attached to business failure is deep. And in a continent that extols the good life, there is also a deep ambivalence to money--at least when others have it. Christophe Sapet, 39,

is one of the founders of Infogrames, a computer game company that went public in 1993. The stock is now worth more than $850 million. "When you earn money, [French] people are jealous," he says. "They think you have done something wrong."

These attitudes may be changing. Whether it is the payoff for liberalization or merely the result of a buoyant economy, the number of European entrepreneurs has been gradually climbing throughout the 1990s. And among the young elite, the ambition is palpable. According to Universum, a Swedish consultancy, 12% of business students want to start or own a company three years following graduation--and 20% in the next ten years. (Among American MBA students, the figures are 10% and 30%.)

Europe's rising generation of entrepreneurs is taking American know-how, mixing it with their homegrown styles, and re-creating business in Europe. Glory, fortune, and even respectability may not be far behind.

--Jeremy Kahn