Germanys future = Start-Ups + Mittelstand

understanding!

Mittelstand!

Aufbruchsstimmung nach WW2“Aufbruchstimmung”

“Wirtschaftswunder”

Source: Fortune "Global Top 500"

0

15

30

45

60

# of sectors # of sectors with German companies

amongst top3

Lufthansa

In 25% of the most important industry sectors worldwide, German companies occupy leadership positions

Revenues

Employees

Export revenue share

EUR 92,5m

680

58%

Profile of a typical German Mittelstand world market leader

21© 2008 Prof. Dr. Bernd Venohr

Technology leadership

3,6%

5,0%

Mid-sized worldmarket leaders

1,250 most R&Dintensive companies

R&D expenditures in % of revenues

Source: J. Meffert/P. Radtke/H. Klein/J. Freiling/T. Hutzschenreuter, Unternehmertum Deutschland, Düsseldorf, McKinsey & Company 2005; sample of 600 medium-sized companies

Source: DTI, The R&D Scoreboard 2006, Commentary and Analysis, Volume 1 and 2, London, 2007, p. 60.

STRATEGY

Mittelstand: 40% higher R&D spendings then the most R&D intensive companies

Introduction Economy Exports Employment

12

R&DR&D Financing SME policy Sources

The “German Mittelstand” is highly innovative

Innovative SMEsFigures for 2010 in %

Reference size: European SME definition

� 54% of “German Mittelstand” companies brought a product or process innovation to market in the 2008 - 2010 period – the EU average was only 34%.

� The “German Mittelstand” invested approx. €8.7m in research and development in 2010 –that equates to one-seventh of the total.

� Spending on R&D rose by around 71% between 2004 and 2010 (figure for large companies: + 19%).

Sources: Stifterverband für die Deutsche Wissenschaft; Institut der deutschen Wirtschaft Köln; Eurostat

Spending on R&D rose by around 71% between 2004 and 2010 - while large companies only increased their spendings by +19%

Mittelstand: current innovation is “evolutionary,” and not “disruptive”

DIGITALE!

AGENDA!

= STARTUP!

AGENDA!

everything that can be digitalized!

!

will be digitalized!

!

Concrete: What is hindering startups the most and where can “Mittelstand” Companies help?

Availability of funding

Regulation

Lack of qualified staff

Lack of customer adoption

Cooperation with larger companies/corporations

business adminstration skills

market know-how

partnership and ccoperation with academia

0 % 10 % 20 % 30 % 40 %

Source: ZWE Studie - High-Tech Gründungen in Deutschland, Hemmnisse junger High-Tech-Unternehmer, Sept. 2010

Bringing together Mittelstand and Start-Ups

R&D and production

Sales and business

development

Innovation

• Production and process know-how transfer • Joint use of special equipment • Deployment of machineries and infrastructure • Use of individualized and standard-components • (New) Technology know-how transfer

• Transfer of specific market know-how • Complement product and service portfolio • Better client-relations trough existing larger partners • => Unfair advantage over international competitors

• Securing the innovation-level trough cooperations or strategic investments and partnerships

• Mew use cased for existing products / technologies • Compliment and extent existing product offerings • Acquisition of (high-)tech Start-Ups

starting a dialogue - losen the tie, drop by…

fundamental research

international talent

A perfect platform for this: Universities

risk takers

innovators

“think different”

decades of experience

influence, network, knowledge

fundamental research

getting involved - no isolated perspective - not being scared of the “new” - exchange ideas, foster

entrepreneurship and education

taking ownership and share risk (= investing)

3 Reasons this works

1.“Made in Germany”

2.Long-term thinking

3.Leading innovation

Thank you

Benjamin Rohé

br @ angelfund.vc

+49 173 975 1021