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Do Company Builders Create Jobs? Examining the Rise of Incubation Finance in Germany

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  • Scheuplein, Christoph
  • Kahl, Julian

Abstract

Over the past decade, new types of business incubation have been developed. One particularly prominent example is company builders, which use their own resources to build up companies, establishing numerous companies in a series. In doing so, this investor type facilitates internal and external business ideas. It offers a new or-ganizational solution that combines both the innovative capacity of founders and the financial resources of a large company with the desire for long-term employment and corporate affiliation. This article examines the economic impact of company builders in Germany compared with other venture capital (VC) investor types on the basis of employment trends in the portfolio companies from 2011 to 2015. It is shown that company builders promote more dynamic employment growth than do other types of investors. This finding suggests that this type of investor is particular-ly well positioned to take advantage of the institutional deficiency in the German VC market. The results are also discussed in the context of the growth of the Berlin-based VC and start-up ecosystem.

Suggested Citation

  • Scheuplein, Christoph & Kahl, Julian, 2017. "Do Company Builders Create Jobs? Examining the Rise of Incubation Finance in Germany," MPRA Paper 82733, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:82733
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    File URL: https://mpra.ub.uni-muenchen.de/82733/1/MPRA_paper_82733.pdf
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    References listed on IDEAS

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    2. Fernandez-Vidal, Jorge & Gonzalez, Reyes & Gasco, Jose & Llopis, Juan, 2022. "Digitalization and corporate transformation: The case of European oil & gas firms," Technological Forecasting and Social Change, Elsevier, vol. 174(C).

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    More about this item

    Keywords

    venture capital; company builder; incubation; employment; Germany;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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