Verena Pausder from the German Startup Association advocates strengthening Germany as a stock market location. “The better the exit chances are, the more attractive the entry opportunities are for investors,” says Pausder.
The chairwoman of the startup association, Verena Pausder, has advocated for a stronger stock exchange location in order to attract investors for young companies. “If we want to establish Germany as a leading technology location with independent companies on the world map, IPOs are crucial,” said Pausder on Tuesday at the Frankfurt Stock Exchange. She held out the prospect of cooperation with Deutsche Börse in order to improve the growth conditions for startups.
Startups have a particular need for capital in the later growth phase, explained Pausder. IPOs are an indispensable channel for investors looking to profitably exit startups. “The better the exit chances are, the more attractive the entry opportunities are for investors.” Otherwise, there is a risk that even more German companies will go public in the USA.
German startups often rely on venture capital from abroad
Venture capital, with which investors such as specialized funds or corporations invest in startups, is considered the key to the growth of emerging companies. Many startups from Germany raise money in the early growth phase. However, for large financing rounds they are usually dependent on Anglo-Saxon investors. When it comes to venture capital investments, Germany lags behind the USA, Great Britain and France.
Startups in Germany are suffering from increased interest rates and more cautious investors. According to data from the auditing firm EY, young companies raised around six billion euros in venture capital in 2023, 39 percent less than in the previous year.
