Community Development Venture Capital: Concept and Status Quo in Germany

International Journal of Entrepreneurship and Innovation Management (IJEIM), Vol. 9, No. 4/2009, pp. 437-452

30 Pages Posted: 21 Feb 2008 Last revised: 1 Nov 2009

See all articles by Ann‐Kristin Achleitner

Ann‐Kristin Achleitner

Technische Universität München - Center for Entrepreneurial and Financial Studies

Reiner Braun

Technische Universität München (TUM) - TUM School of Management

Marko Bender

Technische Universität München - Center for Entrepreneurial and Financial Studies

Annabell Geidner

Technische Universität München (TUM) - Center for Entrepreneurial and Financial Studies (CEFS)

Date Written: February 1, 2008

Abstract

As most other countries, Germany also faces dramatic regional differences in terms of socioeconomic development. One important driver of such development is the existence of a healthy entrepreneurial activity and the creation of new companies. We argue that venture capital (VC) and especially community development venture capital (CDVC) can be a powerful instrument to stimulate entrepreneurship and to support the growth of ambitious companies. Hence, the present paper deals with the general questions, whether there are regional gaps in the supply of VC in Germany? Whether these regional gaps do geographically correspond to the most deprived areas in Germany, and which kind of VC companies are currently in place in order to close potential regional gaps? Geographically, we find that the north-eastern part of Germany is far more deprived than the rest of the country, but is relatively well supplied with VC. Nevertheless, the primary potential target area for CDVC activities in the country is the federal state of Brandenburg in this area. Our assessment of German players in the VC market reveals that some public VC companies do investments similar to CDVC. However, these companies do not offer real hands-on support for entrepreneurs, and real CDVC engagement in the country is yet to come.

Keywords: regional development, community development venture capital, regional equity gap

JEL Classification: G24, O16

Suggested Citation

Achleitner, Ann-Kristin and Braun, Reiner and Bender, Marko and Geidner, Annabell, Community Development Venture Capital: Concept and Status Quo in Germany (February 1, 2008). International Journal of Entrepreneurship and Innovation Management (IJEIM), Vol. 9, No. 4/2009, pp. 437-452, Available at SSRN: https://ssrn.com/abstract=1094942 or http://dx.doi.org/10.2139/ssrn.1094942

Ann-Kristin Achleitner

Technische Universität München - Center for Entrepreneurial and Financial Studies ( email )

Arcisstr. 21
Munich, D-80290
Germany
+49 89 289 25181 (Phone)

Reiner Braun

Technische Universität München (TUM) - TUM School of Management ( email )

Arcisstr. 21
Munich, Deutschland 80333
Germany
+498928925181 (Phone)
+498928925188 (Fax)

HOME PAGE: http://www.ef.wi.tum.de/

Marko Bender (Contact Author)

Technische Universität München - Center for Entrepreneurial and Financial Studies ( email )

Arcisstr. 21
Munich, 80333
Germany

Annabell Geidner

Technische Universität München (TUM) - Center for Entrepreneurial and Financial Studies (CEFS) ( email )

Arcisstr. 21
Munich, 80333
Germany

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