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Bad prospects for start-ups: Business angels invest significantly less



Bad prospects for start-ups: Business angels invest significantly less


According to a survey on behalf of the Business Angels Network Germany and VDI Nachrichten, the mood among Germany’s private investors and start-up sponsors has clouded over. A panel survey showed that per capita investments fell by around half compared to the same quarter of the previous year. A political support program did little to change the subdued mood

Angels are heavenly messengers who mostly spread good news. It’s the same with business angels: wealthy investors who use their money to give startups start-up financing or who invest in ongoing business. But there is little sense of a heavenly atmosphere among those in Germany.

Improvement of the Invest support program

Every three months, the Business Angels Network Germany (BAND, Essen), the Technical University of Aachen (RWTH), VDI Nachrichten (Düsseldorf) and the University of Duisburg-Essen question these private donors. The Business Angels Panel provides the mood barometer from the scene. The current survey shows that it is currently tense. Actually, the omens are good: Because the Federal Government is planning to improve the Invest funding program with its “Key Point Paper on Venture Capital”, which it passed in September. From 2016 there will be a subsidy of 20 percent “for investments by private individuals or corporations in venture capital of up to 500,000 euros per year”. In addition, the reimbursement of the tax on capital gains and a subsidy to offset losses are planned.

Founding time in Germany? Not at all. Just 13 percent of those questioned want to intensify their commitment with regard to the Federal Government’s key issues paper. Almost every third person does not want to make any additional investments. Only 23 percent of those surveyed have invested so far. According to the analysis, the rate has not been so low for two years. According to the latest Business Angels Panel, private investors only rate the business situation with 5.46 points. The business outlook looks similar: 26 participants gave a mere 5.38 points. In the surveys, the scale ranges from 1 “very bad” to 7 “very good”. Both numbers have shrunk again, according to the survey.

Why are the angels running out of entrepreneurial spirit?

The panel also found the answer to this. Just under every tenth business angel was able to sell its stake at a profit. Each of these cases faced a total loss. No rain of money is to be expected in the near future either: In the panel, 70 percent of the donors stated that they had already planned their funds. Startups that can still hope now: providers of e-business solutions, environmental technology and energy service providers. Recently, start-ups in the media and entertainment sector have also increased in popularity among investors. Maybe an angel will fly by after all.