Insight Study on the German Early Stage Investing, Incubation and Businesses Angel System

136 Pages·2014·3.6 MB·English

*Published by
Deutsche Gesellschaft fuer Internationale Zusammenarbeit (GIZ) GmbH, New Delhi
Deutsche Gesellschaft für
Internationale Zusammenarbeit (GIZ) GmbH
MSME Umbrella Programme
B-5/1, Safdarjung Enclave,
New Delhi 110 029, India
T : [phone]
F : [phone]
E : [email protected]
I : www.giz.de

Responsible
Amit Kumar, Programme Manager, GIZ

Authors
Frank Waeltring (Mesopartner)
Prof. Dr. Utz Dornberger (SEPT)

Design
MKM Creative

New Delhi, September 2014

Table of Contents
LIST OF ABBREVIATIONS 5
LIST OF TABLES 6
LIST OF FIGURES 7
INTRODUCTION 8
1 ENTREPRENEURSHIP IN GERMANY: TRENDS AND FIGURES 10
1.1. Start-up activities in Germany 10
1.2. German start-up eco-system in the international context 12
1.3. Generic advantages and challenges of the German start-up eco-system 14
2. A BIRD’S-EYE-VIEW OF THE GERMAN START-UP ECO-SYSTEM 16
3 ZOOMING IN: THE INCUBATION SYSTEM IN GERMANY AND SUCCESS FACTORS 22
3.1. Technology and start-up centres in Germany 22
3.2. Private incubation models 30
3.3. New forms of start-up instruments (co-working spaces and creative labs) 35
3.3.1. Co-working spaces 36
3.3.2. Creative labs 40
3.3.3. Business hubs 42
4. ZOOMING IN: THE FINANCING SYSTEM FOR START-UPS IN GERMANY 43
4.1. Business angel and Business angel networks 44
4.2. Public fi nancial support schemes 50
4.3. New forms of fi nancial support schemes – Crowdfunding and
Crowdinvesting 54
4.4. Venture Capital Funding 59
4.5. The banking sector and start-up loan-fi nancing 65
5. SUMMARY OF CURRENT TRENDS AND SUCCESS FACTORS OF THE
INCUBATION AND FINANCING SYSTEM IN GERMANY 68
5.1. Incubation system for start-ups in Germany 68
5.2. Financing system for start-ups in Germany 70
5.3. Linkage between Incubation and Financing system in Germany 71
6. CONSIDERATION OF LEARNING OPPORTUNITIES FOR THE INDIAN START-UP
ECO SYSTEM 73
6.1. Learning opportunities from the public technology and start-up system 73
6.2. Learning opportunities from the private incubator models 74
6.3. Learning opportunities in the promotion of public-private models to
increase business angel networks as well as venture capital funds 75
6.4. Learning opportunities in the promotion of public-private models to
increase business angel networks as well as venture capital funds 75
Table of Contents
7. CASE STUDIES AND PROFILES 77
7.1. Introduction to the cases 77
7.2. Case studies 78
– German Association of Innovation, Technology and Business Incubation
Centres (ADT) 78
– Bio City Leipzig & Bio-Net Leipzig Technologietransfergesellschaft mbH 80
– KIT-Hightech-Incubator 83
– Weinberg Campus Technology Park 85
– Technologiezentrum Dortmund (TZDO Dortmund) 88
– Humboldt Innovation GmbH (HI) and its Spin-off Pre-Incubation Centre 91
– Startupbootcamp Berlin 93
– Private Accelerator “Axel Springer Plug and Play (ASPP)” 96
– BETAHAUS : Co-working space Berlin, Hamburg, Sofi a, Barcelona 98
– Co.up: Co-working space in Berlin 100
– FabLab Berlin 102
– Planet Modulor as a Business Hub 104
– ABAN: Accelerate Business Angels Nordhessen 106
– Business Angels Netzwerk Saarland (BANS) 108
– Business Angel Netzwerk Nordbayern (BANN) 110
– Angelsbootcamp 112
– TechnologieGründerfonds Sachsen (TGFS) 115
– High-Tech Gründerfonds (HTGF) 117
– Seedmatch 119
7.3. Interest from interviewees in cooperating with India in the
promotion of start-ups 121
7.4. Possible next steps to initiate learning opportunities 121
8. LITERATURE LIST 123
9. APPENDIX 127
List of Abbreviations
ADT German Association of Innovation, Technology and Business Incubation Centres
BA Business Angels
BAN Business Angel Network
BAND Association of Business Angel Networks
BMWi German Federal Ministry for Economic Affairs and Energy
CEO Chief Executive Offi cer
CSES Centre for Strategy & Evaluation
EBAN European Business Angel Network
EFRD European Fund for Regional Development
ESF European Social Fund
EU European Union
EXIST University-based Business Start-Up Program
GEM Global Entrepreneurship Monitor
GIZ German Development Cooperation
HTGF Hightech-Gründerfonds – Venture capital for Start-Ups
MSME Micro, small and medium-sized enterprises
TEA Total Early-Stage Entrepreneurial Activity
ASPP Private Accelerator “Axel Springer Plug and Play”
ABAN Accelerate Business Angels Nordhessen
BANS Business Angels Netzwerk Saarland
BAN Business Angel Netzwerk Nordbayern
TGFS TechnologieGründerfonds Sachsen
TZDO Technologiezentrum Dortmund
VC Venture capital
B2B Business to Business
Insight Study on the German Early Stage Investing, Incubation and Business Angel System 5
List of tables
Table 1: Number of New Entrepreneurs, Germany (2010-2012) 11
Table 2: Ranking of innovation-based economies 13
Table 3: Ranking of innovation-based economies 13
Table 4: Rating of Entrepreneurship eco-system in Germany (2012) 15
Table 5: Differences between technology and start-up centres 25
Table 6: Advantages and Limitations of BANs 46
Table 7: Examples of start-up funding to cover living expenses in the context
of federal state initiatives 52
6 Insight Study on the German Early Stage Investing, Incubation and Business Angel System
List of fi gures
Figure 1: Entrepreneurship rates in Germany (2000 to 2012, in %) 10
Figure 2: Start-up projects by sector (2012) 12
Figure 3: The inner circle of the German start-up eco system 16
Figure 4: The inner and second layer of the German start-up eco system 17
Figure 5: An overall view of the German start-up eco system 20
Figure 6: Technology and start-up centres in Germany 22
Figure 7: Proprietor of the Centres 23
Figure 8: Centres and their environment 25
Figure 9: Main actors and relations in the public German incubation model 27
Figure 10: Rise of private incubator models 31
Figure 11: Estimations of private incubators in Germany 32
Figure 12: Numbers of Co-working spaces worldwide 36
Figure 13: Development of freelancers in Germany 37
Figure 14: Funding Schemes for Start-ups in Germany 43
Figure 15: Business Angel Climate Index in Germany 2009-2013 44
Figure 16: EXIST Business Start-Up Grants, number of promotions, (2007-2012) 51
Figure 17: Crowdfunding in Germany 55
Figure 18: Funds raised (from the start until 31.12.2013) 56
Figure 19: Crowdfunding overall by newly raised and existing funds 56
Figure 20: Crowdinvesting volume in Germany 57
Figure 21: Platform’s market share 2013 58
Figure 22: Venture capital in Germany, 60
Figure 23: Venture capital in Germany by sector 61
Figure 24: Venture Capital in Europe 61
Figure 25: KfW Start-up investments in EUR bn 67
Figure 26: Different incubation systems and approaches 69
Figure 27: Main characteristics of the fi nancing system for start-ups 70
Figure 28: Financing opportunities in the different stages of 71
enterprise development
Figure 29: Linkage between the incubation and fi nancing system 72
Insight Study on the German Early Stage Investing, Incubation and Business Angel System 7
Introduction
The existence of highly dynamic and successful micro, small and medium-sized enterprises
(MSME) is one of the characteristic features of the German economy. They have been, and
continue to be, the country’s growth and job engine. Their strong performance has raised
interest in other countries with less dynamic MSMEs, which are keen to strengthen their
MSME sector. Learning from the German experience appears to be a promising exercise.
Nonetheless, every country has its own economic structure and development path.
However, since the 1980s in particular increasing importance has been given to promoting
new businesses and new sectors due to economic structural change processes, the decline
of traditional employment-intensive business sectors and the challenge of promoting
additional economic pillars. Additionally, the increasing specialization of the German
economy and its competition in knowledge-intensive product markets has also required
the promotion of new innovative start-ups in industry and in services. Although Germany
is not the leading country in the promotion of start-ups (see next chapter), it has been
able to set up a highly competitive support infrastructure and an MSME eco-system which
can also be regarded as the backbone of the German economy.
On the other side, India´s economic structure is also very much dominated by its MSME
sector. Around 27 million MSMEs employ roughly 60 million people. However, the support
environment is rather weak and 90% of the MSMEs are in the informal sector. They
experience limited access to fi nance, non-availability of suitable technologies, constraints
on modernization, non-availability of skilled labour, etc. Moreover, the MSME sector will
have to grow and innovate if India wants to ensure its competitiveness in the longer run.
The country has to create 180 million new jobs by 2025 to ensure inclusive growth. In
order to be more competitive in the international market, India must therefore improve its
start-up and MSME eco-system.1
1 GIZ (2013)
8 Insight Study on the German Early Stage Investing, Incubation and Business Angel System