> Okay, what is the limiting factor
A few.
A big part is that the EU is a collection of countries that (with very few exceptions) have different languages and laws. For a company to serve Spain and France, for instance, it would need to translate everything, hire local lawyers and customer support agents. Considering the much smaller size of the countries (biggest one is 70 million vs 330 million in the US), the opportunity for "unlimited" growth is limited.
This also rebounds in the fact that when an American company makes it big, they have the resources to flood other EU markets and be cheaper/better than the local competition due to economies of scale and money based on their big successful US market. A French company making it big is still small compared to a US equivalent.
Then, there's the capital markets, no denying that. The money being thrown around the US is like nowhere else on the planet. Some of it definitely a bubble / unrealistic, but that doesn't matter. But in part it's because of the size of the total potential market that this is justified.
Education / national mythology also plays a part, I think (this is pure conjecture now). In the US, the "American Dream", "everyone can make it" etc is heavily ingrained. It propagates through the world with the help of Hollywood and other American cultural exports. In most EU countries, there isn't such a heavy emphasis on independence and "pulling yourself up by your bootstraps". "Hustle culture" isn't a thing. So for most people, it isn't something that comes naturally to them to start a company and work 100 hour weeks to be big and rich and successful and famous.
That's not to say there aren't such people, I went to 42 and have been to Station F and know some people in that universe. A decent proportion of my classmates wanted to make their startup and make it big, and some did end up starting their own companies.