To kick off the discussion about more political support for startups in Germany, Christian Lindner painted a sobering picture. While there are many good founders with great ideas in the country, the framework conditions are not optimal. The VC market is too small, and the current economic situation is putting additional pressure on young companies.
With the Future Financing Act However, this is set to change. The law, which, according to the minister, will be voted on in the Bundestag after the summer recess, is intended to improve financing conditions for startups, for example, by reducing the minimum capital required for an IPO or making it easier for institutional investors to invest in startups. Another important point for Lindner: He wants to abolish the VAT requirement for investment companies. He believes this is a disadvantage for Germany in international competition, leading to investment companies primarily locating abroad – and then investing there, sometimes with money from Germany.
The question of the stock pension
For Hanno Renner, who was on stage not only as Personio CEO but also as a member of the "Advisory Board of the Young Digital Economy" led by Vice Chancellor Robert Habeck and part of the extended board of the German Startup Association, this was an important point. While the Canadian Pension Fund, for example, can invest in German startups, pensions in Germany are separated from the capital market. He would like to see more access here, Renner said.
The minister certainly supported this concern. However, he pointed out that direct investments are difficult due to regulatory reasons. However, with the Zukunftsfonds Deutschland (Future Fund Germany) managed by KfW and the European Tech Champion Initiative, two funds of funds are available that make insurers' money more accessible. For him, however, it is most important that more people get involved in the capital market.
“The stock pension is coming”,
said the Finance Minister.
However, a completely different financing gap emerged Svenja Lassen, Managing Director Germany of the startup investor network Gateway Ventures and founder of the Female Investors Network (FIN). There are still too few women in the startup ecosystem, both among founders and investors. She is actively addressing this issue. With the FIN Academy, she has launched a six-week online training program that enables women to start as business angels.
How Christian Lindner wants to support female founders
Lindner, too, is clear that female founders don't have worse ideas, but rather that they are implemented less frequently. He identifies male networks as responsible for this, which are already emerging at universities and ensure that investors are more likely to invest in the startups of their former classmates. The minister wants to remedy this with the aforementioned funds. These funds provide "a window exclusively for projects by female founders who fail to make it through the normal route to the capital market." There would also be binding diversity requirements for the investment committee.
Digitalization and reducing bureaucracy were also two important topics addressed by Svenja Lassen. Christian Lindner assured the audience that both topics were one and the same for him – and that he was committed to simplifying processes at BaFin, for example, introducing e-shares, empowering financial administration with digital tools, and more. He also addressed the issue of data protection. He expressed his desire for a paradigm shift here, as the prevailing goal of data minimization hinders the work of AI and algorithms. After all, these algorithms require sufficient data to function. Therefore, the Finance Minister advocated replacing data minimization with anonymization and pseudonymization, thus making the data available. He is also working on this.
The end of the journey: Which stock exchange does a startup go to?
Another point the Finance Minister wanted to discuss was the topic of exits. He was critical of the fact that many startups potentially become established and grow in Germany, only to eventually go public abroad, relocate their headquarters, and ultimately pay taxes there. This happens primarily because there isn't enough capital in Germany to handle double- or even triple-digit million-euro rounds.
An analysis with which Hanno Renner clearly agreed and also spoke about his own experiences with Personio. The topic of IPO will also be interesting for his company in one to three years and he is already considering the question of where to ultimately go public. He also noted, however, that as a "European patriot," he naturally prefers a European location. However, German solutions for issues such as the implementation of multiple voting rights, SPACS, or direct listings would make the decision easier for him.
