50 young, innovative companies attended the German Equity Forum in Mainz, to orientate themselves in the market for private equity capital and to make new contacts with possible providers of capital.
The Equity Forum is the most successful capital markets event in Europe and is geared towards venture capital investors, financing advisors and Business Angels. This year, the majority of capital-seeking companies came from innovative sectors such as information technology, biotechnology and environmental technology.
KfW Mittelstandsbank and Deutsche Boerse AG have organised the Equity Forum for 12 years. The spring event, which focuses mainly on early stage financing of companies from the technology sector, is supported by the Investitions-und Strukturbank Rheinland-Pfalz (ISB) GmbH.
“Private equity is often the only financing possibility for start-ups or fast growing technology companies. For these innovative companies, which convert new technologies into marketable products, create new markets and thus ensure growth and employment, German Equity Forum provides an efficient platform,” says Detlef Leinberger, member of the board of KFW Banking Group.
“The German Equity Forum promotes understanding for the importance of private equity, particularly for small and medium-sized enterprises. Moreover, it brings together ideas and capital, that is entrepreneurs and investors with a greater risk appetite. The innovative strength of these companies is the driving force of the German and the European economies. Deutsche Boerse offers custom-tailored segments to companies considering an IPO to increase their equity capital base and to use this to enter new markets and generate growth”, adds Rainer Riess, managing director, Cash Market Development, Deutsche Boerse.
In his inaugural address, Hendrik Hering, Rhineland-Palatinate Minister of Economics, referred to the private equity situation among small and medium-sized companies. One quarter of the companies in Rhineland-Palatinate reported an equity ratio of below 5%, 50% of the companies of less than 20%.
“Only a quarter of the companies have an equity capital of over 40 percent thereby meeting internationally common standards.” Hence, finance options for small and medium-sized companies is at the top of the political agenda.
The opportunity to bring start-ups and investors together at this years spring forum in Mainz and also to introduce the State of Rhineland-Palatinate was welcomed by Hans Joachim Metternich, spokesman of the executive board of the Investitions- and Strukturbank Rheinland-Pfalz (ISB) Gmbh.
“The Investitions- and Strukturbank Rheinland-Pfalz, its VC companies and complementary support programs offer innovative companies excellent financing possibilities. Our activities focus mainly on companies in the seed and start-up phase,” says Metternich.
The German venture capital market still lags behind its possibilities despite strong innovation potential in Germany and the large number of small and medium-sized companies with new and innovative products giving them potential for growth and international expansion.
“This is where the KfW Frderbanks support programs come into play. With the ERP Startfonds, the KfW, for example, offers risk capital to business founders and young companies and refinances the investments of ventures capital funds in innovative companies,” says Detlef Leinberger, KFW Banking Group board member.
The KfW has provided about 300 Million in equity capital over the past few years; around one third of the total, about 100 Million, was in early-stage financing.
In addition to the chance to establish contacts with potential investors, the participants of the German Equity Forum could participate in workshops and discussions and find out about the requirements for obtaining private equity capital.
The German Equity Forum was first held in 1996. It takes place twice a year – in spring and in autumn. The spring event is oriented towards companies in the early stage phase, whereas the autumn event targets late stage and listed companies.