According to Library House, a Cambridge based research firm, German investors among Europe’s most active VCs. In particular this one VC named High-Tech Gründerfonds Management was the most active investor both in terms of total deal activity as well as first-time investments. Sounds like they REALLY want to get rid of all their money!
With €272 million from a combination of public and private-sector sources, including KfW Bankengruppe, Germany’s federal bank, as well as corporates BASF, Siemens, Deutsche Telekom, Daimler, Bosch and Zeiss it might take some time before they really run out of money to invest.
Feel free to help them though! Send in those business-plans and start your “How to bluff your way into German” courses!
Do know that this fund has fixed deal terms leaving little room for negotiations. They invest no more than €500k in exchange for 15% of the companies they invest in and save some money for a second round, should there be one. So far however, 37 out of the 43 deals it completed during the period were first rounds.
If you start negotiating with Germans here are a few tips: never touch them. They don’t like it. No hands on shoulders or patting on backs. Keep things formal, even during dinner or when they seem relaxed. If they make you an offer, in general, that is the amount they want to spend. The first offer is what they think is reasonable and not an invitation to a counter offer unless you have a REALLY good reason to make one. If they seem angry during the negotiations don’t panic. That is just the way they negotiate. More tips for dealing with Germans? Leave comments!
The European Founders Fund, the investment vehicle of the Samwer brothers, founders of auction site Alando.de (acquired by eBay) and mobile content provider Jamba! (now part of New Corp’s Fox Interactive Media) is pretty busy too. In 2006 and early 2007 they did ‘only’ 6 new investments. In the past 12 months they invested in 14 new companies!
According to Library House the string of new deals by German VC firms over the past year comes as most other European VCs were scaling down their new investment activity.
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