A New Wave of Founders in Germany

by Jörg Überla, Guest Author

Walking past a German newsstand these days may bring up memories of the early days of the New Economy. “The new German wave of founders” – such was a headline in leading economic weekly WirtschaftsWoche around Easter; at the same time, the Financial Times German edition (FTD) had launched its own founders initiative. Journalists all over the country are keen to talk to entrepreneurs and their financiers, and to cover their success.

And in fact, there is a new wave. We at Wellington Partners had received a third more business plans in the first quarter of 2007 than in the same period last year. Entrepreneurs are finally discovering the business potential of Web 2.0 and beyond. As we check these business plans, we recognize four main differences compared to the late 1990s:

* First and foremost, the majority of today’s business plans are well-thought, professional and ambitious – no comparison to the quick shots of the first Web generation.

* Secondly, these plans are presented by mature teams of managers in their 30s or 40s, who had the opportunity to gain professional experience at leading market players. To give an example, we have just led the first round of financing for online advertising platform Adconion. Its CEO, Tyler Moebius, had already co-founded Traffic Marketplace, and other members of the management team had already worked for eBay, Avenue A Seattle and Valueclick.

* Thirdly, they address a fast-growing market. All over the world, online expenditures of end customers as well as ad spending show high growth, and gain market shares to the discomfort of classical distribution channels and media.

* And last, but not least, more and more of these business plans aim to change the world. From the first day on, these companies address the global market and are committed to leading their specific markets.

These fundamental changes within our ‘target group’ go hand in hand with a brighter economic outlook, lower unemployment rates, and higher wages – all things, which also help entrepreneurs take the plunge with their own company. And it is precisely this environment that triggers headlines like the one in WirtschaftsWoche about the new German wave.