Private Equity in Germany | springerprofessional.de

Springer Professional

nach oben

2023 | Buch

Kapitel lesen Erstes Kapitel lesen

Private Equity in Germany

Venture Capital for Digital Platform Start-ups

verfasst von: Cordelia Friesendorf, Navid J. Mir Haschemi

Verlag: Springer Nature Switzerland

Buchreihe : Business Guides on the Go

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

Einloggen, um Zugang zu erhalten

Über dieses Buch

Start-ups are emerging, non-conventional enterprises that enter established markets with radically different products, displace incumbents, create new markets, and promote economic growth through innovation. Start-ups are often faced with many challenges that may threaten their survival, which can often be overcome by securing steady financial support. Start-ups are high-risk enterprises that are unattractive to conventional financiers, but absolutely suited to private equity (PE) and venture capital (VC) investors who seek rewards and are therefore willing to accept risk. The success stories of global digital platform start-ups have attracted PE investors in particular. When investing in a digital platform start-up in Germany, what criteria do PE and VC investors look for? How should entrepreneurs prepare for VC funding? What strategies should they use? The authors examine these questions in this book and provide a comprehensive analysis of the German start-up, digital platform, PE, and VC ecosystems. The book exposes entrepreneurs, investors, mergers and acquisitions experts, regulators and policy-makers to the market's workings and pain points so that they can help create a German start-up ecosystem that is as functional as the other organized industries.

Anzeige

Inhaltsverzeichnis

Frontmatter

Chapter 1. The Imperative of Private Equity in Start-up Financing in Germany

Abstract

Private equity refers to the investment of equity capital in private companies. An investor in private equity invests a sum of money, which is referred to as her stake, in a private company with the intention and expectation of increasing the value of her stake over time.

Cordelia Friesendorf, Navid J. Mir Haschemi

Chapter 2. The Nature and Characteristics of Start-ups

Abstract

In this chapter, we introduce the concept of a start-up as opposed to a conventional business. We describe the qualifying traits of a start-up company, as well as give a detailed overview of the financing needs and the phases of the company’s development. We first explain the start-up life cycle and the phases that a start-up goes through, and then we examine that environment in more detail on the basis of the German start-up environment. It is our objective to provide insights into financing trends and features of the German start-up financing ecosystem, as well as a summary of the challenges that start-up founders face as a result of the market features and structures.

Cordelia Friesendorf, Navid J. Mir Haschemi

Chapter 3. Digital Platform Start-ups

Abstract

This chapter makes the case that “going digital” is an undeniable reality for businesses, governments, and consumers alike, and it summarizes the characteristics of demand and supply that create the opportunity for new start-ups to utilize digital technologies as part of their business model. It appears that a majority of the solutions to problems in the local and global markets can be found in digital platform start-ups that encourage the entry of new players into incumbent markets. Increasingly inexpensive technology and its availability create customer needs that aim to enhance productivity or convenience in an operational environment. We present four case studies in Germany representing varying levels of success regarding the drivers and trends of digital platform start-ups. By doing so, we identify and analyze the criteria for equity financing.

Cordelia Friesendorf, Navid J. Mir Haschemi

Chapter 4. The Emergence of Entrepreneurial Ecosystems

Abstract

In order for a start-up to succeed, it needs an environment that facilitates the entry of experienced and/or creative minds into the company so that they can bring in, organize, and build a business model that is capable of achieving scalable growth within the short term, and that can attract established or new investors to finance and know-how providers in order to fund the start-up in a scalable and profitable manner. There is no doubt that the development of industrial ecosystems requires the presence of agglomeration. There are a number of features that are present in the German entrepreneurial ecosystem, which are discussed in this chapter, along with the advantages of its location, the impact of conurbation, and also the steps that need to be taken to formalize and fuel the advancement of it. Towards the end of this chapter, we provide a detailed description of the measures and initiatives undertaken by different government agencies.

Cordelia Friesendorf, Navid J. Mir Haschemi

Chapter 5. Private-Equity as Start-up Financing Source

Abstract

The purpose of this chapter is to provide a detailed analysis of the existing understanding, the current status quo, the volume of the total private equity (PE) investment in Germany, as well as the obstacles that need to be overcome to acquire and leverage PE investments. As part of our analysis, we also discuss the challenges that are looming and upcoming in PE financing, as well as the actions that regulators can take to ease these barriers, as well as the steps that regulators can take in an effort to mitigate these barriers. The fact that start-ups contribute significantly to economic growth in the sense that they are crucial for driving innovation, we make a strong case for enabling start-ups to access finance in a more convenient manner.

Cordelia Friesendorf, Navid J. Mir Haschemi

Chapter 6. Venture Capital as Start-up Financing Source

Abstract

The purpose of this chapter is to provide an overview of venture capital (VC) development around the world and in Germany. We begin with a brief description of the humble beginnings of VC funding in the USA and its evolution as the engine of innovation and exponential growth as we know it today. Among the issues addressed in this chapter are the status of venture capital financing in Germany. We point out to the experts’ views of the level of growth expected soon. Furthermore, we present the trends and statistics of VC funding in Germany.

Cordelia Friesendorf, Navid J. Mir Haschemi

Chapter 7. Venture Capital as a Subset of Private Equity

Abstract

The purpose of this chapter is to explain the differences between private equity (PE) and venture capital (VC). We will begin by demonstrating the common characteristics of PE and VC, followed by identifying the various characteristics that equity investors in general look for when selecting start-ups for investment. Several performance criteria are listed out in this chapter which are people, process, and systemic in nature to obtain a comprehensive view of which start-ups are considered eligible for PE and VC funding.

Cordelia Friesendorf, Navid J. Mir Haschemi

Chapter 8. Research Design

Abstract

Detailed descriptions of our research design are provided in this chapter. In the previous chapters, we reviewed secondary literature to identify the crucial factors that PE and VC investors consider to be key investment criteria. To answer our research questions, we will develop hypotheses based on the results of primary research in the form of expert interviews. With respect to research ethics, accuracy, and methodological appraisal, we describe multiple aspects of our study and point out the limitations.

Cordelia Friesendorf, Navid J. Mir Haschemi

Chapter 9. Research Analyses and Results

Abstract

While examining the criteria venture capitalists employ to select and invest in start-ups, particularly digital platform start-ups, we identified eight factors that we have formulated as research questions and hypotheses. In order to test these hypotheses, we conducted qualitative surveys and interviewed four established experts in the fields of private equity and venture capital in Germany. In order to affirm and establish our hypotheses, we refer to the statements made by interviewees in the context of the criteria identified. Interviewees who preferred anonymity are referred to as INT 1 and INT 2. In this document, we refer to our expert Lars Kuppe as INT Kuppe and Florian Weinkauf as INT Weinkauf. Below are the results ranked in order of importance according to the criteria that we used.

Cordelia Friesendorf, Navid J. Mir Haschemi

Chapter 10. Summary and Recommendations

Abstract

The first part of this chapter provides an overview of the research objectives, methods, and design of the study, followed by a discussion of the results of the study, focusing on the German market in particular. The overall objective of this paper is to discuss the implications of the results, namely the criteria identified as necessary and sufficient for venture capital investments by different stakeholders. It is our goal to inform founders, managers, investors, financiers, and policymakers about the functioning of the start-up ecosystem, so they can contribute to its overall appeal, while also preparing founders and investors to design successful private equity strategies and develop robust start-up business models in Germany.

Cordelia Friesendorf, Navid J. Mir Haschemi

Titel: Private Equity in Germany
verfasst von: Cordelia Friesendorf
Navid J. Mir Haschemi
Copyright-Jahr: 2023
Verlag: Springer Nature Switzerland
Electronic ISBN: 978-3-031-33708-6
Print ISBN: 978-3-031-33707-9
DOI: https://doi.org/10.1007/978-3-031-33708-6