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What are the differences and similarities between the American venture capital financing model and the German venture financing of entrepreneurial start-ups?

Schlüter, Bernd (2018) What are the differences and similarities between the American venture capital financing model and the German venture financing of entrepreneurial start-ups?

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Abstract:In the last decades, venture capital companies received more and more attention in the context of funding entrepreneurial start-ups. European countries such as Germany are still lagging behind the United States in the size and depth of venture capital activity. Through the investigation of the American financing model by Ruhnka & Young (1987), literature review, and case study of three different German venture capital firms, this paper identifies differences and similarities between both markets. Hereby, the characteristics of each venture capital market and influential factors of their VC companies provided insight into the entrepreneurial study. Therefore, it can be concluded that the economic history and difference in social capital and entrepreneurial spirit were the most important drivers for the existing gap between both countries. While researchers and investors indicated there is a need for more ambiguous, and risk-taking German entrepreneurs, American VC’s rather focus on the detection of breakthrough ideas in the process of funding. However, in the recent years, both governments facilitated further venture capital activity through tax benefits and additional funding opportunities. The creation of the world’s leading venture capital hotspots in the Silicon Valley and Berlin had a tremendous influence on the development of both markets and helped the economies to grow remarkable.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:International Business Administration BSc (50952)
Link to this item:http://purl.utwente.nl/essays/75349
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