The aim of the present study is to systematically analyse the market for crowd investing in Germany, which is in the process of development. In this context, crowd investing should be seen as an innovative complement to venture capital. A further goal of the work is thus the discussion with financing by venture capital. This ensures that the investigation of crowd-investing is carried out and classified against a macroeconomic background.
Accordingly, the work is structured as follows: First, a systemtematic analysis of the forms of financing venture capital and private equity, or the German venture and equity capital market, is carried out. Beginning with an introductory definition and differentiation of venture capital from private equity, the investigation then extends to the players involved in the market and the overall economic significance of venture capital and equity capital. Furthermore, the financing phases and the financing process as well as the legal and tax framework will be analysed. The next chapter is devoted to the analysis of the current environment and the current situation in private equity and in particular in the venture capital sector. In particular, the German venture capital market is evaluated and assessed on the basis of statistical measures. One focus of the work is the investigation of the novel instrument crowd investing carried out in Chapter 8. First, the general functioning of crowd investing is explained. Then the currently active crowd investment platforms in the market, on which the entire investment process takes place, will be compared with regard to regulations, activities and transacted transactions. Furthermore, it will be determined for which companies crowd investing is a suitable alternative and how the development chances of the market can be estimated. A comparison of the financing forms venture capital and crowd investing is the subject of the tenth chapter.
At the end the following questions will be answered: What is the current situation of the German venture capital market? What problems can arise with venture capital financing? How does crowd investing work? What is the current legal and market situation like? For which companies is crowd investing an alternative to venture capital, if it is one at all? What is the potential of crowd investing and can it be classified as an innovative complement to venture capital?
Table of Contents
1 Introduction
2 Theoretical basics: Venture Capital
2.1 Definition and characteristics of venture capital
2.2 Characterization of Venture Capital Financing
2.3 Characteristics of Venture Capital
2.4 Distinction between venture capital and private equity
2.5 Meaning and objectives of venture capital
2.5.1 Meaning and objectives of the venture capital providers
2.5.2 Meaning and Objectives of the Venture Participants
2.5.3 Significance and objectives of venture capital companies
2.6 Historical development of venture capital
2.6.1 The historical development of VC in the USA
2.6.2 The historical development of VC in Germany
2.7 Macroeconomic significance of venture capital and private equity
2.8 The financing phases and the financing process
2.9 Legal and fiscal framework conditions
3 Venture capital and private equity in the current environment
3.1 Venture Capital and Private Equity in Germany
3.2 Distribution of private equity investments by regions and sectors
3.3 Divestments of associated companies
3.4 International comparison of the German venture capital market
3.5 Venture Capital Investments by Business Angels
3.6 Public venture capital financing in Germany
3.7 Deficits of the German equity and venture capital market and possible suggestions for improving the framework conditions
3.8 Summary and transition to start-up financing by crowd investing
4 Venture capital as an asset class national / international
5 Upheavals in international corporate finance call for improved framework conditions for international venture capital financing activities
6 Practical Opportunities and Potential / Trends for Venture Capital in the International Finance Sector
7 Interim conclusion on the subject of venture capital
8 Start-up financing 2.0: crowd investing
8.1 Definition and definition of terms
8.2 The Web 2.0: Importance as infrastructure for crowd investing
8.3 Functionality and significance of crowdfunding
8.4 General functioning of crowd investing
8.5 Legal framework of crowd investing
8.5.1 Obligation of crowd investing platform operators to obtain permission
8.5.2 Obligation to publish a prospectus
8.5.3 Forms of participation in crowd investing
8.6 The crowd investing platforms in Germany
8.6.1 Overview: The German crowd investing platforms
8.6.2 Transactions on the German crowd investing platforms
8.7 Special Features of Other Crowd Investing Platforms
8.8 Categorisation of founding companies in crowd investing
8.9 Crowd investing for medium-sized companies
8.10 Secondary benefits of crowd investing for companies
8.11 Summary and development forecast
9 Crowdinvesting as an innovative addition to the German venture capital market: comparison, result formulation and summary
9.1 Resources for start-up financing in the current market environment
9.2 Classification and comparison of crowd investing as an innovative addition to venture capital financing by venture capital companies
9.3 Classification and comparison of crowd investing as an innovative complement to venture capital financing by business angels
9.4 Possibilities for the interaction of crowd investing and 'classic' venture capital financing
9.5 Summary formulation of results and conclusion
Research Objectives and Themes
This study aims to provide a comprehensive analysis of venture capital financing, specifically evaluating the German market and its limitations, while exploring crowd investing as a viable, innovative complement for start-up and medium-sized enterprise financing.
- Theoretical foundations and historical evolution of venture capital
- Statistical assessment of the German venture capital and private equity landscape
- In-depth investigation into the mechanics and regulations of crowd investing
- Comparative study between venture capital, business angels, and crowd investing models
- Development potential and practical integration of crowd investing into existing financing structures
Excerpt from the Book
Definition and characteristics of venture capital
Venture capital is an important part of the private equity market. Literally translated into German, venture capital means venture capital. Venture capital is either brought into the company in the form of fully liable equity capital or equity-like financing instruments. Accordingly, a venture capital investment is the provision of equity capital by an investor in a company, usually during or shortly after the start-up phase.
In German, venture capital describes external equity financing for high-risk projects. The English term is literally translated into German as "Wagniskapital". Venture capital can thus be defined as a form of equity capital with increased risk, which is why the term risk capital is also used in the literature. Another approach sees venture capital simply as equity capital that is invested in a company in order to effect certain developments. Some see the definition of venture capital as too general and insufficiently specified. The translation of venture capital is also considered to be misleading, as it suggests a high degree of incalculability and a lack of seriousness. The Bundesverband deutscher Kapitalbeteiligungsgesellschaften uses the translation venture capital in some places, but usually remains with the English term venture capital. Following this approach, further differentiations are dispensed with in the further course and simply the term "venture capital" or the abbreviation "VC" is used. Venture capital is capital made available to a company at an early stage to support growth. As can be seen in the following figure, this is a form of external financing as an alternative to an Credit financing. At the same time, it represents self-financing, as the financial resources are provided by third parties, but their character corresponds to the equity capital raised.
Summary of Chapters
1 Introduction: Discusses the necessity of venture capital for small and medium-sized enterprises due to limited traditional financing options and high capital requirements for innovation.
2 Theoretical basics: Venture Capital: Defines venture capital, its financing characteristics, historical context in the USA and Germany, and the macroeconomic role of venture capital and private equity.
3 Venture capital and private equity in the current environment: Provides a statistical analysis of the German market, comparing it internationally and examining the roles of business angels and public funding.
4 Venture capital as an asset class national / international: Describes venture capital as a distinct asset class and explains investment vehicles like fund-of-funds for risk diversification.
5 Upheavals in international corporate finance call for improved framework conditions for international venture capital financing activities: Analyzes the need for modernizing corporate finance and creating better regulatory and tax conditions for venture capital.
6 Practical Opportunities and Potential / Trends for Venture Capital in the International Finance Sector: Illustrates practical investment models, identifying the early-stage phase as critical for development.
7 Interim conclusion on the subject of venture capital: Summarizes the role of private equity as a necessary counterweight to traditional bank financing and a driver for innovation.
8 Start-up financing 2.0: crowd investing: Explains the definition, legal framework, and functional mechanics of crowd investing platforms in Germany.
9 Crowdinvesting as an innovative addition to the German venture capital market: comparison, result formulation and summary: Compares crowd investing with traditional venture capital and business angel financing, concluding that it serves as an innovative complementary instrument.
Keywords
Venture Capital, Private Equity, Crowd Investing, Start-up Financing, Equity Capital, Business Angels, Web 2.0, Entrepreneurial Finance, SME Financing, Capital Market, Innovation, Fundraising, Risk Capital, Crowdfunding, Market Analysis.
Frequently Asked Questions
What is the core focus of this study?
The study investigates the mechanisms and importance of venture capital financing and evaluates crowd investing as an emerging alternative for funding innovative, early-stage, and medium-sized enterprises in Germany.
What are the primary themes addressed in the book?
The book covers the theoretical foundations of venture capital, the status of the German equity market, the legal environment for alternative financing, and the practical implementation of crowd investing models.
What is the central research question?
The study explores whether crowd investing can effectively function as an innovative complement to traditional venture capital financing for German companies.
Which scientific methods are employed?
The work utilizes a systematic, thematic analysis of financing forms, supported by empirical statistical data from the German private equity market and existing studies on crowd investing development.
What is discussed in the main section?
The main section details the financing phases, regulatory challenges for platforms, legal forms of participation, and a comparative analysis of venture capital versus crowd investing.
Which keywords best characterize this work?
Key concepts include Venture Capital, Private Equity, Crowd Investing, Start-up Financing, and Financial Innovation.
How do venture capital and crowd investing differ in practice?
While venture capital is often institutional and focuses on high-tech growth, crowd investing allows a broad crowd of individual investors to participate in smaller funding rounds via digital platforms.
What is the role of the "crowd" in this financing model?
The "crowd" acts as a collective of individual investors who, through online platforms, provide capital to companies, often benefiting from the "wisdom of the crowd" and direct digital communication.
Why is the German market considered underdeveloped in this context?
The study notes a conservative start-up culture, restrictive bank lending, and less favorable tax and regulatory framework conditions compared to the USA.
- Arbeit zitieren
- Maged Hassanien (Autor:in), 2018, International and national financial activities with venture capital and crowd investing, München, GRIN Verlag, https://www.grin.com/document/455814
