Editor’s Foreword 2015

The current state of the markets leads us to consider whether the term venture capital deserves a new definition. Especially when you realize where risks arise and what influence you have on them. Investors are glued to cheap central bank money like addicts to their drug. As soon as the supply stalls, i.e. the central banks tighten the reins, withdrawal phenomena set in, with considerable consequences. Depending on whether the thumb of monetary policy in the U.S. or Europe is pointing up or down (with regard to the purchase of government bonds), different risks come to the fore. However, all of them affect the entire, global investment community. And only those investors whose sense of reality has been sharpened by recent crises and market shocks and not clouded by the flood of liquidity in recent years are likely to be armed. A clear view of things is required to recognize the daily news as really good or bad.

Coupled with this, there was again a notable increase in covenant light loans. However, the resulting effects in times of incalculable parameters such as central bank policies should be kept in mind. They are likely to be vividly remembered by many private equity firms and investors. Monetary conditions are currently as loose as they can be. As long as this remains the case, the upward trend in all alternative asset classes, from corporate bonds to private equity, is also likely to continue.

We are facing a new founding era! Digitalization is revolutionizing everything, according to Siemens CEO Joe Kaeser (Handelsblatt 10/21/14). German technologies and research enjoy such an excellent reputation that even the famous Silicon Valley Bank wants to pitch its tents here. In Silicon Valley, the bank is not only in business with the majority of venture capital financiers, but also with numerous startups and serial entrepreneurs. In Germany, it defines its market gap in the lack of tech expertise of regional banks and their limited experience with the expansion of start ups abroad. More American dynamism in venture-stage money should do our young entrepreneurs good. Many successful among them depended on foreign donors for international expansion. Among them Kreditech in Hamburg, the company received $40 million from international investors this year and Zalando has more international than German financiers on board. Intershop founder Stephan Schambach also founded his second company, Demandware, in the U.S. and took it public there. Reason: no chance in Germany. - Read more about the German government's ambitious high-tech strategy in the FYB greeting from Prof. Dr. Johanna Wanka, the Federal Minister of Education and Research.