Entrepreneurship made in Germany.
The chliché of the good organization in Germany is true and it might be an explanation for why many experts are calling Germany the hidden champions in Entrepreneurship. The startup ecosystem has become a significant economic factor in Germany and the entrepreneurs like to work the traditional way. In the following we will give you some insights into the German startup scene.
- over 70.000 startups
- approximately 13 employees per startup
- startup hotspots: Berlin, Hamburg, Ruhr Valley
Unlike to other EU countries, startups can’t be only found in the main hotspots of the country. A thing that makes the German ecosystem special is that there are a lot of regional startup ecosystems all over Germany. Looking at a map of Germany you can see that startups tend to cluster around universities that foster entrepreneurship.The Generator Startup Center, located at the Stuttgart Media University is exactly such a place and will be the host of the first Summer School of Mission:Enterprise.
As already mentioned, Startups have become a well established sector in all of Germanies regions. This would not be possible without the help of foreign founders. Germany really benefits from their influx and the share of foreign-born startuppers is disproportionally high (every tenth founder is foreign born). Still, there is no federal founding for foreigners at the moment.
Main ingredients for German success:
- basic conditions are set (legal, fiscal, banking)
- universities support founders
- states support founders (loans, grants) (also for foreign startups)
- big network: official & private associations, initiatives, networks, many events
- huge media coverage
- good domestic network of other companies as well as customers and investors
- good cooperation between startups and small and medium-sized businesses (SMEs)
- high demand on new technologies and innovation
In comparison to the positive points that Germany has to offer for founders, ther complex administrative process (German bureaucracy) is still a hurdle while founding a business. Same goes for expanding in another country. A lot of German founders would go global but say differences in the legal system, conflicting tax systems and regulation are the biggest hurdles to expansion. Still, there is the German Accelerator which is a government-backed program that can help entrepreneurs looking to take their startup internationally with offices in New York City, Silicon Valley and Singapore.
support by the government:
- federal financing: High- Tech Founders’ Fund
- programs by federal ministry of economic affairs:
- EXIST: aims to improve the entrepreneurial environment at universities and research institutes
- INVEST: subsidizes angel investments
- ERP/ EIF growth facility : widen access to venture capital
According to the startup Monitor, almost 1/3 of entrepreneurs received capital from the government.
- lots of private startup centres (Accelerator, Incubator, Company- Builder); the support here can range from a consultation to financial support and help with the infrastructure.
E.g. Axel Springer Plug & Play, DB Accelerator
- banks that only exist for the purpose of company formation (Förderbank KfW)
- competitions for Entrepreneurs for financial/ consultant support and precious feedback to your business model; media presence