After initial successful financing, start-ups often lack access to the large pots of money as they continue to grow. That should change in the future.
In the future, start-up companies in Germany should be able to obtain venture capital more easily in order to be able to advance their economic development. This is what the draft for a new start-up strategy by Economics Minister Robert Habeck (Greens) envisages.
“The federal government will continue to strengthen the German venture capital market and create additional opportunities for large-volume financing by domestic investors,” says the paper, which is available to the German Press Agency. Several media had previously reported about it.
Start-ups lack venture capital
The industry has complained for a long time that, after initial successful financing in the early phase, start-ups are often denied access to large-scale financial injections as they continue to grow. In the future, insurance companies and pension funds should also be allowed to invest their money as venture capital. “The federal government is aiming to build up a capital stock for statutory and private pensions and will provide this with a minimum investment quota in VC funds in order to structurally and permanently strengthen the availability of risk capital,” says the paper. The abbreviation VC stands for venture capital.
In the USA, the Gulf States, Scandinavia, Great Britain and other countries, large sums of money have been flowing from the pension funds via venture capital pots into the financing of young companies for years. In Germany, on the other hand, regulatory requirements largely prevent this cash flow.
The start-up association welcomed the plan from the Ministry of Economic Affairs. The present draft sets the right priorities to improve the conditions for start-ups in Germany, explained Christian Miele, CEO of the start-up association. “If the start-up strategy is consistently implemented, start-ups will make an even greater contribution to the economic, ecological and social transformation of our country in the future.”
