Meeting Global Challenges German-U.S. Innovation Policy: Summary of a Symposium (2012) / Chapter Skim
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Panel VI: Early-Stage Finance and Entrepreneurship
Panel VI: Early-Stage Finance and Entrepreneurship
Pages 117-126
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From page 117... ...
In the United States, venture capital firms have existed since World War II, while in Germany the first firms were not founded until the 1980s and 1990s. "And we know that in the United States it took 35 years before venture capital became a force." Other hypotheses, he said, were that Germans are less willing to take risks than Americans; that German entrepreneurs are less likely to get a second chance from their peers, or from society; that the capital markets are larger in the United States; or that the regulatory climate in the United States is more favorable to venture capital.
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From page 118... ...
he asked. An important reason is a condition that "fundamentally sets us apart from the United States: we do not have pension funds.
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From page 119... ...
We see that our own equity industries are now stepping into the breach, as they have seen that the banking industry -- the old players -- can no longer do so." THE CLASH OF INNOVATION CULTURES: THE UNITED STATES AND GERMANY Eran Davidson Managing Partner Hasso Plattner Ventures Mr. Davidson introduced himself as an Israeli who had making venture capital investments for 16 years, the past six of them from his current base in Berlin.
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From page 120... ...
"In the United States, managers are business oriented people, and marketing is the dominant theme of every company: marketing, marketing, marketing."
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From page 121... ...
But we use it in different ways." In the United States, he said, such a person would arrange to "work first in a factory, build a prototype, take it to market, talk to friends and potential customers, and make a decision about whether this is the final product, meanwhile gaining knowledge throughout the process." The same person with courage in Germany would "first learn the subject, read books, do some research, gain a lot of wisdom, then after one or two years probably go and study the market carefully." The two entrepreneurs might finally end up at the same place, he said, but their paths would be quite different. "What we [at Hasso Plattner Ventures]
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From page 122... ...
In the United States, for example, a major focus is energy security and energy independence, because so much petroleum is imported, especially from OPEC nations. Therefore, energy independence and overall energy strategy begins with reducing dependence on imported oil.
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From page 123... ...
That means if we don't have adequate capital to deploy these technologies, all the R&D investment and VC/private equity will be no more effective than pushing on a noodle. That's why I think this is such an important context." The total amount of financing invested in clean energy in 2010 was about $250 billion, she said, which was "a fairly healthy amount, considering 37 Asset financing is the use of balance sheet assets (accounts receivable, short-term investments, inventory)
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From page 124... ...
If the private market for clean tech does not continue to grow in the United States, these investments creating new push will shift to other places." Turning to the topic of venture capital, Dr. Prabhakar said that clean tech had grown to 15 percent of total VC, a "notable fraction" worth $3 to $4 billion a year.
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From page 125... ...
Prabhakar also described several significant problems on the market side. First, VC in the United States is focused on finding markets that "explode," with investors hoping for $100 or $200 million in revenue within four or six years ."Those are the rock stars of entrepreneurship," she said, "that make VC an exciting asset category." But in clean tech, she said, industries move much more slowly.
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From page 126... ...
The most talented students in Germany, such as IT students, would rather start working when they're 22 or 23 years old at Deutsch Telekom or Daimler Chrysler or Microsoft rather than start their own company. In the United States, it's exactly the opposite.
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