Startup Investment Phases

Early- Stages

(FrĂĽhphasen)

Idea and Foundation

Features
In the Seed-Phase the idea already exists and a business plan as well as an organizational structure has to be implemented.

The company already exists for a year.

Stages:
company foundation, market launch, acquisition, production and distribution development.

Financing:
The invested capital is called venture capital.

Low capital requirement for the early phase of product development. Exception: research intensive technologies.

Necessary capital: for actual startup financing, for product development and first marketing activities.

The capital to cover the expenditures mainly comes from the founders’ private credits, equity, supplier credits, Business Angels, Venture-Capital companies or from subsidies

Expasion Stages

(Wachstumsphasen)

National und International Expansion

Features
A rapid penetration of the market has to be achieved.

Distribution development: only with the expansion of the distribution system along with production the company reaches the profit zone.

In the Bridge phase (Pre-IPO) additional competitors enter the market and an eventual stock market listing will be prepared.

Financing:
Expenditures for sales and product development are required.

Due to the competitors the capital demand for financing the market penetration increases.

In the Bridge phase a bridge financing is necessary since the stock market listing is taking place. The bridge financing can be reimbursed through the revenues of the stock market listing. Investment banks and issuing companies are specialized in these areas.

Later Stages

(Endphasen)

Rekonstruktion und Nachfolge

Features
During the Later Stage financing additional capital is required for e.g. restructuring or for an additional diversification in new products.

Financing:
Financing in cases of Turn-Around, a redevelopment or Management-Buy-out and Management-Buy-in mainly happens via investors or borrowed capital (Buy-out-financing).

Additional alternatives are: profits via stock market listing, generated funds of the company and subsidies.

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