The following interview can be found in a recent study about venture capital in Germany by EY. See the original study for more information.
How do you see the market for venture debt in Germany?
The market for venture debt in Germany is still very young and most are not very familiar with the product. However, equity investors and successful entrepreneurs see great potential in this segment and most of them appreciate the advantages of this financing tool, asking for a proposal and are happy to replace traditional equity rounds with a quick and simple debt facility.
How do you think the market for venture debt will develop in Germany over the next five years?
If entrepreneurs are more open to debt financing and overcome negligible concerns, this product could have a material effect on the entire venture scene. By accelerating growth without dilution, venture lending boosts company development with controllable risk. I am sure that venture debt in Germany will meet US level within the next five years. The need is clear – there is a lack of mid to late stage funding sources and venture debt fills the gap perfectly.
What do you bring with you to this business?
Being a venture capitalist for over 20 years and running six different venture capital funds, as well as the Family Office of one of Germany’s most successful entrepreneurs, I understand the mind set of young entrepreneurs, can assess risk, and can assist much beyond finance with their growth challenges.
I am also well acquainted with the German Family Office scene and can bring the two different worlds together – the discrete wealth managers and high net-worth individuals with the young, dynamic tech entrepreneurs.
How difficult was it to raise a debt fund?
It was extremely difficult because of BAFIN regulations, but we managed
to convince them of the need and the market, which is not met by traditional banks. They were open minded, wise and licensed our fund.
