Editor’s Foreword 2014

The investment climate in Germany is becoming steadily friendlier. From January to June 2013, investment companies in Germany invested EUR 2.19 billion, exceeding the previous year's level by 11 percent (EUR 1.98 billion) in the comparable period. In this country, more than 200 national and international investment companies are active and hold over 5,000 investments with an estimated annual turnover of around 200 billion euros. It has also become very clear in recent years that transactions involving private equity houses need not necessarily lead to job losses.

It is encouraging that venture capital affinity is increasing among large German companies. They establish corporate venture units or intensify existing activities and thus also promote start-ups. For example, Tengelmann Ventures holds around 20 investments and has invested in Zalando, Freudenberg goes MedTech, Telekom is involved in MyTaxi and Lottohelden, Daimler Ventures invested in Tiramizzo, Audi is looking for investments in new technologies, and BMW has shares in DrivNow, ParkNow and ChargeNow, among others, and maintains an office in New York with BMW iVentures. The Burda Group has already been expanding its Internet business for years and, in addition to newspapers, also sells pet food, among other things, owns a majority stake in Xing and has other holdings such as Lumas or Mytheresa managed by its spin-off Acton Capital. The Burda Digital holdings generate more than EUR 1.6 billion in sales. Axel Springer Verlag wants to reinvent itself with its venture activities and, among other things, is investing 30 million euros in Project A, a venture company in which the Otto Group holds a majority stake. Nevertheless, the fact remains that only around 250 million euros of venture capital flow into young technology companies in Germany every year. Measured in terms of the size of our economy, startups would have to be given ten times as much money to even come close to the investment level of the USA.

The vast majority of German SMEs have drawn the right conclusions from the financial crisis and done their homework. Most companies engage in extensive capital management, and in many cases are excellently capitalized and well equipped.