Newsletter
Fraunhofer Venture
Newsletter
- Fraunhofer Venture - Questions and Answers
- Spin-off Profile
- News
- Trainings and Workshops
Fraunhofer Venture Questions und Answers
Interview: More Money for German Founders?! - An Interview with Thomas Doppelberger, Head of Fraunhofer Venture
Mr. Doppelberger, how would you describe the current situation for high-tech start-ups?
It has become more difficult. The entire financing landscape has changed dramatically. In Germany, we are actually talking about a landslide. According to the BVK (German Private Equity and Venture Capital Association), German venture capital investment dropped by 70% in the year 2009. The decrease in financing activities, thus, is significantly more dramatic than in the USA where the VC volume decreased by only about one third last year.
Who is particularly affected by this decrease in financing activities?
German high-tech and cleantech enterprises in the start-up phase and with a need for capital are hit particularly hard. The entire seed investment of German VC investors amounted to a mere 8 million Euros in 2009. Private financing of high-tech start-ups has almost ceased. At present, high-tech hardly has any chance for venture capital as it simply doesn't exist anymore. But actually the high-tech and cleantech business is capital intensive and therefore particularly dependent on third-party funds.
What are the reasons behind this development?
According to the BVK, the narrow means of VC investors can directly be traced back to the financial and economic crisis. The funds could and can hardly find investors for their work. But also the years before, German as well as international investors avoided to invest into German start-ups, and particularly start-ups in the seed phase. One possible explanation is that seed financing is connected to particularly high risks and the bottom line is that it is not too profitable.
Why do such a few investors decide on Germany as a location for business?
In Germany, investors find a significantly smaller selection of potential projects if you, for example, compare it to Silicon Valley in the USA. Therefore, in case of doubt, investors rather decide against a seed-phase project in Germany and invest globally into promising corporate concepts.
What will have to change to make Germany more attractive as a location for business?
There are still not enough academics who would found an enterprise based on their research results and inventions. When a project is finished, many patents become obsolete in the archives or their potential is used abroad. Something needed to change here. Of course, the focus clearly should always be on the economic utilization of each project. Only if the implementation seems to be realistic, further subsidies should be granted. This way, it would also be possible to implement the spin-off idea already in the research phase and additionally change the German founders mentality in the long term.
How would you describe the role of public investors?
As a result of VC shortage, public investors such as the High-Tech Gründerfonds of course do play a decisive role for founders in the seed-phase. But financial support is limited for each start-up. At the same time, the requirements are very high for many projects. In addition to capital resources, for example, a complete business plan including an exit strategy is required for the application procedure. But many founders are not in the position to outline such a strategy at that point.
What are possible solutions in your opinion?
Access to public funds should be made easier. One solution could be to establish an expert committee for a quick and unbureaucratic provision of public means. The Fraunhofer-Gesellschaft already reacted to this demand within its means. For several years now, it has successfully been supporting the program »Fraunhofer Fosters Entrepreneurship (FFE)«, which provides first uncomplicated financing to Fraunhofer scientists who want to start-up an enterprise for the further development of the start-up project.
How would you describe the role of Fraunhofer Venture?
Fraunhofer Venture tries to motivate scientists who want to start-up an enterprise and supports them on their way into self-employment. Promising projects are supported by investments. In general, we aim at achieving a change in mentality. Still much more young academics should want to venture into self-employment - and get the chance to do so.
Spin-off Profile
SmartMembranes GmbH
In many areas, the demands on hygiene and cleanliness have increased; that, in turn, aroused the need for new methodologies. A promising procedure lies in membrane technology. One company specializing in this technology is SmartMembranes GmbH. Their ultra and nano porous membranes are suited for the filtration of water, air, gas, and other substances. Possible applications include environmental protection, ambient and breathable air control, as well as industrial medicine. Founded in 2009 as a spin-off of the Fraunhofer Institute for Mechanics of Materials IWM, the company is based in the weinberg campus technology park in Halle.
SmartMembranes GmbH came into being in 2007 with winning the Nano-Entrepreneurship-Academy (NEnA), an ideas competition exclusively awarding female scientists with a nanotechnology background. With the support of the FFE program (Fraunhofer Fosters Entrepreneurship) of Fraunhofer Venture, a business plan and a comprehensive business concept were developed within one year.
At the beginning of the SmartMembranes GmbH technology was the idea to develop a membrane with pores that would only allow to pass parts of a few nanometers in diameter. This plan was realized by developing a highly ordered structure similar to a honeycomb. Materials such as silicon and aluminum oxide are used for this purpose. One example for parts with a size of only a few nanometers are viruses featuring a diameter of approximately 0.025 to 0.1 micrometers.With conventional filtration processes, such as for example micro filtration using pore sizes of more than 0.1 micrometers, viruses are not captured. Filtration using membranes of SmartMembranes GmbH enables to go below this value and, thus, to capture the viruses. With a pore size of less than 0.1 micrometers, this type of filtering is to be attributed to nanotechnology. Compared to conventional filtering, it is not only an extremely small pore size that clearly distinguishes the membrane technology of SmartMembranes GmbH, but also the possibility of variable and precise adjustment of the pores within the range of nanometers. Pore size, membrane thickness, lattice constant, and membrane porosity may be determined individually. Against this background, there are hardly any limits to the industrial application of this technology of SmartMembranes GmbH.
News
Munich Network: 3rd Cleantech Conference June 24, 2010
With a focus on »Energy Efficiency«, the third Munich Cleantech Conference will take place at Konferenzzentrum München, Lazarettstraße 33, June 24, 2010 from 9 a.m. to 6 p.m. Ambitious start-ups looking for capital or cooperation have the opportunity to present themselves. To apply for a 6-minute pitch, start-ups need to register by June 10 the latest.
The conference addresses cleantech enterprises, investors, scientists, and everybody else interested in cleantech as well as start-ups looking for an opportunity to establish new contacts. Additionally, representatives of renowned enterprises will be attending such as for example Tilmann E. Kuhn / Head of Group Solar Facades of the Fraunhofer Institute for Solar Energy Systems ISE.
The issue of "Energy Efficiency" is gaining more and more importance as the demand for a more efficient energy generation, storage, transport, and also consumption is on the rise worldwide. All these areas bear a high potential for innovations, new products and services.
bwcon: »High-Tech Gründerfonds Consultation« July 21, 2010
Investment managers of High-Tech Gründerfonds (HTGF) will be at the disposal of founders and project teams of research institutions for personal consultations, evaluate business models and outline possibilities for support. In order to provide for the opportunity to meet representatives of High-Tech Gründerfonds, bwcon and MFG Baden-Württemberg in cooperation with regional partners offer the HTGF consultation on a regular basis.
On Wednesday, July 21, 2010, representatives of HTGF will be available again in Mannheim for one-hour consultations and will assess start-up projects for their eligibility to be financed by HTGF. Both, start-ups looking for seed financing and teams of founders and researchers in the pre-start-up phase are invited to participate. They are to be sensibilized for the financing alternative through High-Tech Gründerfonds.
Optionally, the founders may schedule one further consultation appointment with mentors of the bwcon: Coaching Group. This will provide for the opportunity to discuss the business idea with an experienced entrepreneur or manager, to outline alternative possibilities for financing, and to analyze the options for concomitant coaching.
Registration deadline is July 3, 2010. Participation is free of charge.
venture forum neckar e.V.: »Corporate Investment« Forum June 24, 2010
Venture capital of third parties often is the only possibility to realize the start-up phase for young, technology-oriented enterprises.
In this context, financing with business angels and other corporate investment is becoming more and more important. 10-14 innovative companies from different technology-oriented industries from all over Germany will present their business in short presentations of approximately 10 minutes at Bechtle AG in Neckarsulm on June 24, 2010, starting at 1 p.m.
Furthermore, interesting speakers are invited. As key-note speaker, Prof. Dr. Lothar Späth, who already consulted numerous start-ups and upcoming enterprises of the high-tech and media industry as a member of the management and supervisory board, will be attending the forum. Participants get to know how they can succeed in winning such investors.
Closing date for short presentations is June 15, 2010.
Registration deadline for visitors is June 17, 2010.
EXIST III: Support for Extra-University Research Institutions for Fostering the Development of a Founder-Friendly Climate
With EXIST III, the Federal Ministry of Economics and Technology has launched an initiative to support extra-university research institutions in the development of a founder-friendly climate and the advancement of concrete start-up projects.
Until now, non-university research institutions play a rather minor role in the context of spin-off foundations compared to universities. Merely about five percent of all spin-off foundations originate from non-university research institutions. In order to achieve a turnaround in this respect, EXIST III offers the possibility to apply for a non-returnable grant also for non-university research institutions in affiliation with a university.
EXIST closely cooperates with the four large German research organizations: Fraunhofer-Gesellschaft, Helmholtz Association, Leibniz Association, and Max Planck Innovation. They support those interested in the application for EXIST grants. Responsible contacts are Thomas Doppelberger (Fraunhofer-Gesellschaft), Dr. Jens Fahrenberg (Helmholtz Association), Jörg Strompen (Leibniz Association), and Florian Kirschenhofer (Max Planck Innovation).
Trainings and Workshops
Netzwerk Nordbayern: Training »The Basics of Corporate Financing« in Nuremberg, June 15, 2010
The Netzwerk Nordbayern training »The Basics of Corporate Financing« on Tuesday, June 15, 2010 from 2 - 6 p.m. will give an overview of existing possibilities of corporate financing. Companies that are about to start-up their business or are planning an expansion will receive support in the question for which types of financing they could use in their particular situation and which are suitable. Experts from different backgrounds such as representatives of investment establishments, banks, or venture capital associations give lectures and pass on basic first-hand information and tips.
Registration deadline is June 8, 2010. Participation is free of charge.
Netzwerk Nordbayern: Training »Recognizing, Developing, and Implementing Innovative Business Models« in Nuremberg, July 5, 2010
For founders but also for mid-sized companies, the development of the own business model often is an intuitive process based on the services the company offers and no conceptual one. Not least, this is one reason why companies fail with their ideas, because medium-term the basis for their business is missing.
Dr. Alexander Brem, manager, and Nico Kreusel, consultant of VEND consulting GmbH dispose of comprehensive experience from various consulting projects. For Netzwerk Nordbayern they will share their know-how and offer their support for the development of a business model. The training will take place in Nuremberg, July 5, 2010. Practical exercises will give access to questions regarding business models and business plans.
Registration deadline is June 28, 2010.
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