German Venture Capital Exceeds its Reputation

According to the latest data provided from a group of venture capital firms in Munich, Germany, German venture capital seems to be exceeding the expectations from other investment communities worldwide. The data further shows that German venture capital firms have generated more venture capital and have been investing more than their US counterparts. Some of this data has been provided by EarlyBird Capital, one of Germany’s leading and largest venture capital firms.

According to Private Equity Analyser, which is a Munich-based online data provider that benchmarks the investments from Germany from year to year, German venture capital and private equity firms seem to be doing very well in 2010. One of the reasons for the exceptional performance of German venture capital firms is that they live up to their reputation and cherry pick the companies that they choose to invest in.

This cherry picking provides to be a good barrier to investments that fail, by choosing only those companies which have exceptional management and executive teams, market leading products, or products that fill a specific unmet need in a given industry. These criteria allow the firms polled to take calculated risks in their investments.

The data shown by the firms shown in this article further show that within the time period of 1998 to 2010, the portfolio companies of these German vc firms have grossed their ROI up to over 11.4%. This boasts of a much better ROI than US vc firms have grossed during the same time period, which is 7.7%.

According to the general partner at Wellington, Mr. Rolth Dienst, contrary to popular belief in the venture capital industry, the German venture capital industry has fared quite well during this difficult time period, much better than their counterparts in the United States. Mr. Dienst further added that though the German venture capital industry may not be as big as that of the United States, but for its small size, it is in excellent health.

The data provided about the German Venture Capital industry is provided by CEPRES GmbH, which is a venture capital and private equity research firm and the firm further provides data about the venture capital industry by compiling the outlook and past events in ROI from portfolio companies, portfolio structuring, and funding services.

CEPRES GmbH is also planning to run a funding and venture capital research worldwide, which would allow people in the venture capital industry to review the investment climate in different parts of the world and based on that information, plan their future investments.