Deutsche Startup Monitor publishes its third edition
The Deutsche Startup Monitor is the annual study of the local startup scene published by the German Startups Association (BVDS) in collaboration with the Berlin School of Economics and Law (HWR Berlin) and KMPG since 2013. Now with Deutsche Startup Monitor 2015 they have released the third edition right on schedule, presenting Germany's previously hard-to-assess startup scene in concrete figures. This year at CeBIT, startups are getting their own section in the Scale11 area. In an imaginatively designed hall, young companies can promote their business at the world's biggest digital industry event, getting a real boost by pitching to and interacting with established companies and businesses.
But back to the Startup Monitor: For this third edition of the Deutsche Startup Monitor, a total of 1,061 startups from across Germany took part in data collection during the period from April to May. The study represented by its own account around 1,000 startups, 3,000 founders and 16,000 employees of startups. For the Deutsche Startup Monitor, a company counts as a startup if it is no more than ten years old, has a technology-driven and innovative business model, and also demonstrates exceptional sales or employee growth or seeks to achieve these in the near future.
Overview of key results
German startups create an average of 17.6 jobs
On average, a German startup generates no fewer than 17.6 jobs. In Berlin – which unsurprisingly boasts the largest number of startups, followed by the Munich, Hamburg and Rhine-Ruhr metropolitan regions – this average reaches 27.2 per company.
For the study's authors, this is justified by the positive business climate for German startups: at 89.3 percent, the large majority of founders are satisfied with their business development, and 76 percent expect it to improve in the next six months.
German startups will therefore hire an average of eight new employees over the next 12 months, representing some 50,000 new jobs in the startup scene.
In addition, 22 percent of startup employees do not have German citizenship.
Business angels becoming the most important source of financing
The startups surveyed by the Deutsche Startup Monitor received a total of more than a billion euros in financing last year.
Bootstrapping continues to be the most important form of financing: 79.9 of founders financed their idea from their own savings. Financial support from friends and family helped out 32 percent of startups. Only 20 percent of the companies surveyed received venture capital, while 29.7 have a business angel onboard, which is the most important source of outside capital.
This once again shows the importance of the defeat of the German government's controversial anti-angel law. The proposed bill would have charged significantly higher taxes on earnings from free float participations than before. More than 30 flagship startups had written an open letter to German Chancellor Angela Merkel on this subject.
Entrepreneurs relaxed about failures
Forty-five percent of the surveyed founders had already started a company previously, and one in five (21.2 percent) had done so more than twice. Around a third of the founders already had a failed startup behind them. This seems to have very little impact on their attitude: More than 80 percent of startup founders would continue to pursue an independent business after giving up their current company.
More women behind startups
Germany's startup scene is becoming more feminized. According to the survey, women are increasingly founding startups. At 13 percent, significantly more founders are female than in the previous year (10.7 percent). This is particularly noteworthy, because the number of female entrepreneurs had initially dropped between 2013 and 2014 – so this negative trend has not continued. The average age of men starting their company is 34.9 years, for women it is 35.1.
German Startups Association Chair, Florian Nöll, was hesitant to declare this a trend. But he is confident that the sector's commitment to highlighting role models and promoting networking is slowly bearing fruit. "Germany deserves more women in leadership positions – including in the startup scene," he says.