Within the scope of its strategy to tap into further operative revenue sources, the Berlin-based investment firm German Startups Group takes aim at two new business fields. For this, it intends to make use of its position as the most active private venture capital investor in the German startup ecosystem since 2012 and plans to extend the purpose of the company.
Subject to approval by the Annual General Meeting, German Startups Group plans the creation of a secondary market platform for unquoted shares in startups, presumably together with partners. While such platforms, e.g. SharesPost, have established themselves long since in the US and other countries, Germany is kind of a developing nation in this respect. The creation of liquidity for so-called secondary shares is in the interest of all parties involved – the founder, business angels, and employees of startups as well as the startups themselves and their investors – and therefore offers lucrative business opportunities. Even today, German Startups Group has established a reputation as a buyer of secondary shares and receives many unsolicited purchase offers, but can itself only seize a fraction of these opportunities.
Additionally, German Startups Group intends to issue participation rights in the future for the increase in value of individual portfolio companies, subject to approval by the respective portfolio company. It has been shown in recent years that many private investors have an interest in direct investments in portfolio companies of German Startups Group that are not accessible to them. By issuing participation rights, German Startups Group intends to enable these investors to directly participate in the value creation of individual startups in the growth stage. The issuance of participation rights would lead to a capital inflow that would be used to acquire shares in the respective portfolio companies so that a so-called balance sheet extension occurs and German Startups Group increases in size. The goal is a generation of a so-called “carry”, i.e. a profit-share in the increase in value.
German Startups Group is a publicly listed investment company based in Berlin that focuses on startups from the DACH region (Germany, Austria, Switzerland). Since it commenced with operations in 2012, German Startups Group has built up a diversified portfolio of 43 investments. 24 of the 43 minority stakeholdings in operationally active companies are of particular significance to German Startups Group and together comprise 91% of the total value of all 43 active minority stakeholdings. The ten core holdings alone make up 62% of the value of all active minority stakeholdings.
