A pressing need for the German fund, according to economist Jens Südekum, is to accelerate the process of providing risk capital to growth-oriented start-ups in the country. In a guest article for the Handelsblatt, Südekum emphasizes the urgency, stating that rarely has there been so much capital in search of a safe haven.
The economist highlights the difficulties faced by young, successful companies in securing sufficient capital for scaling their business models in the European market. Many would likely opt for the United States, where risk capital is more readily available, he notes.
The German government, Südekum suggests, can take immediate action by establishing or strengthening funds for risk capital, targeting start-ups in the growth phase and allowing private capital to participate. This pilot project was announced under the umbrella of a Germany fund in the coalition agreement.