Most start-up managers in Germany only know a world in which teams keep growing.
(Photo: imago/PhotoAlto)
Crisis? What crisis? In fact, so far there has been little sign of the much-cited start-up crisis in Germany. A few companies have announced layoffs and there have been a few bankruptcies. But with Celonis, Personio and others, some of the most valuable German start-ups have recently been able to raise millions and increase their ratings.
However, founders should not be fooled into thinking they are safe. The fact that investors have become more hesitant about start-up investments will only really become apparent towards the end of the year or even at the beginning of 2023. It’s perfectly rational for investors to focus now on those companies that are likely to yield the greatest returns and are resilient to crises.
Start-ups collect the necessary capital for twelve to 18 months in venture capital rounds – no matter how big they are. Because it was easier than ever to get venture capital in Germany in the second half of 2021, many companies are currently still well financed. But how long?
It currently looks as if the exaggerations in the USA were greater than in Germany. The correction would be correspondingly harder. The fact that the wave of layoffs is more pronounced there can also simply mean that US founders are more forward-looking.
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The German start-up scene is inexperienced. Young entrepreneurs here only know a start-up world in which things are always going up – and they are likely to fail to recognize that it is high time to step on the brakes.
If you don’t find a way into profitability in the foreseeable future, a downsizing will be inevitable. The question is whether the German founders will recognize this in time before they hit a wall.
More: Venture capitalists are turning off the money supply to tech start-ups