Venture Capital and New Technology Based Firms

National Institutions and High Tech Industries: A Varieties of Capitalism Perspective on the Failure of Germany's Neuer Markt

“…The early-stage portion of the venture capital market is dependent upon an active stock market, since venture capitalists typically would not invest in early-stage companies without the possibility of exiting their investments a few years later through an IPO. In the first half of the 1990s there was much less German venture capital activity than in the US, and this activity was concentrated much more in later stage companies than was the case in the US (Pfirrmann, Wupperfeld, and Lerner 1997).…”

“…research and development intensive) industries (Albach 1983;Pfirrmann, Wupperfeld, and Lerner 1997). Although Germany was a clear world leader in so-called mediumtech industries, such as motor vehicles, machinery, and chemicals, it was less successful in the development of newer industries, such as semiconductors, computer hardware, software, and biotechnology.…”

“…In particular, the shortage of equity capital available for high risk, but potentially high return investments in startup companies (i.e. "risk capital") has been identified as a serious barrier to the development of high-tech in Germany (Albach 1983;Pfirrmann, Wupperfeld, and Lerner 1997). Although Germany has a well-developed banking system, bank lending is inappropriate for financing high tech startups due to the high risk of failure and the lack of fixed assets that could serve as security for the loans.…”

Evolutionary interpretation of venture capital policy in Israel, Germany, UK and Scotland

“…First attempt at triggering the private equity/venture capital industry (1975)(1976)(1977)(1978)(1979)(1980)(1981)(1982)(1983)(1984)(1985) In late 1970s, the shortage of equity capital available for investment in innovative SMEs has been identified as a serious barrier to the development of high-tech companies and sectors (Pfirrmann et al, 1997). WFG, which was established in 1975, was the Federal Government's first direct attempt to promote the development of a VC market.…”

Entrepreneurial Business Models in the German Software Industry: Companies, Venture Capital, and Stock Market Based Growth Strategies on the 'Neuer Markt'

“…companies implementing an EBM), their contribution to innovation and growth, and their main structural prerequisites -such as special stock market segments for fast-growing companies ('growth segments') and venture capital (VC) -are some of the focal points in the debate about long-term German competitiveness (Pfirrman, Wupperfeld et al 1997). During the 60s and 70s the lag of Germany in information technology was attributed to unfavorable industrial and trade policies designed to protect a few national champions (Bresnahan and Malerba 1999).…”