The Venture Capital market in Germany

Innovative start-ups help to maintain the competitiveness of the German economy in the long term. Besides good ideas and teams, start-ups also need the respective capital. Venture capital (VC), a form of private equity, is a financing option that is becoming increasingly more important for company founders. However, the volume of venture capital on the German market is relatively low by international comparison, despite the country's above-average innovative capacity.

The Stiftung für Technologie, Innovation und Forschung Thüringen (STIFT) business development foundation has asked the researchers from the Fraunhofer IMW Leipzig Innovation Financing Unit to analyse the German venture capital market and the respective causal links.

This has resulted in a discussion paper that provides a concise overview of the market situation, the factors that influence it and the potential for improvement.

Providing scientific support during the Investor Days Thuringia 2016 was also an element of the project. The team led qualitative interviews with start-ups; the insights gained from these interviews were then included in the discussion paper together with expert interviews with capital providers and an analysis of the existing secondary data. In collaboration with STIFT, the team also organised a policy forum during the Investor Days Thuringia that gave venture capital industry representatives a chance to talk to policy makers.

The project intends to establish a basis for the discussion about how innovative start-ups, especially in the Free State of Thuringia, can be encouraged with the aid of venture capital in future.