German venture capital performs
“After the bursting of the Internet bubble in 2000, the German VC industry, unlike that in the USA, consolidated strongly. In the period up to 2009, the number of active VC funds in Germany decreased by more than three quarters. After the VC funds from 2000 were widely disinvested from 2004/2005, this led to very low entry valuations according to the principle of supply and demand.”
“As soon as the portfolios of the venture capital funds launched from 2005/2006 onwards have been sold to a larger extent and the presumably very good returns of these fund generations have thus been reflected in the investors’ accounts, significantly more capital will again flow into German VC funds and thus enable growth. Until then, however, it is still a few years away, in which our industry will have excellent investment opportunities but rather fewer growth opportunities in the form of larger funds.”
“The relatively dried-up VC market unfortunately offers few alternatives for young companies in terms of potential capital providers. The more capital is needed, the more difficult it becomes. Therefore, I advise young companies to put a strong focus on capital efficiency. Since financing remains difficult even in follow-up rounds, I also advise paying attention to the reputation and networking of the investor(s) to ensure that they not only make a significant capital contribution themselves when putting together further financing rounds, but can also bring other capital providers to the table.”