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Entrepreneurial business models in the German software industry: Companies, venture capital, and stock market based growth strategies on the Neuer Markt

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  • Engelhardt, Lutz
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    Abstract

    Young, radically innovative, growth oriented, and publicly listed high-tech companies in Silicon Valley together with venture capital financiers gave birth to the concept of the ‘Entrepreneurial Business Model’ (EBM). This concept has become central to the debate about the innovative capacity of nations in information technology and its promotion became an important policy objective in Germany during the 1990s. This paper addresses the question of whether German software companies on the former ‘Neuer Markt’ of the Frankfurt stock exchange were able to successfully implement business models similar to that of the typical entrepreneurial company in the United States. The paper focuses on the performance of software companies and venture capital investments on the ‘Neuer Markt’. A number of findings emerge from this effort. First, successful German software companies implement traditional business models. The most successful German software companies specialize in IT- and software services. Such firms do not specialize in standardized software products which require little service and customization. Second, German venture capital for the most part was not able to establish successful entrepreneurial companies on the Silicon Valley model. Nor were they able to create a successful German variant of venture capital involvement in more traditional companies. Venture Capital ; Software ; Stock Markets ; Germany ; Entrepreneurial Business Models -- Junge, radikal innovative, schnell wachsende und börsennotierte Hightech-Unternehmen aus dem Silicon Valley und ihre Risikokapitalgeber standen Pate für den Begriff des ‚Entrepreneurial Business Model’ (‚Unternehmerisches Geschäftsmodell’/ Wachstumsunternehmen). In den Diskussionen um die Innovationskraft einer Volkswirtschaft nimmt dieses Konzept eine prominente Stellung ein und wurde so zu einem der Hauptziele deutscher Wirtschaftförderung in den 90er Jahren. In diesem Beitrag wird der Frage nachgegangen, ob deutsche Softwareunternehmen des ‚Neuen Marktes’ der Frankfurter Börse in der Lage waren, Geschäftsmodelle ähnlich dem des typischen amerikanischen Wachstumsunternehmen zu etablieren. Zu diesem Zweck wird die wirtschaftliche Leistung von Softwareunternehmen und Wagniskapitalinvestments am ‚Neuen Markt’ analysiert. Es zeigt sich zum ersten, dass die erfolgreichsten deutschen Softwareunternehmen keine klassischen Wachstumsunternehmen im amerikanischen Sinne sind, sondern traditionell wirtschaften. Die stärksten deutschen Softwareunternehmen haben sich auf serviceintensive IT- oder Softwareservices spezialisiert. Unternehmen, die standardisierte Software mit geringem Service- oder Personalisierungsanteil anbieten schneiden vergleichsweise schlecht ab. Es stellt sich zweitens heraus, dass deutsche Wagniskapitalgeber in ihrer Mehrheit nicht dazu in der Lage waren, starke Wachstumsunternehmen an den Markt zu bringen oder eine erfolgreiche deutsche Variante des Wagniskapitalinvestments in traditionellere Unternehmen zu entwickeln.

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    Bibliographic Info

    Paper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, Research Unit: Institutions, States, Markets with number SP II 2004-04.

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    Date of creation: 2004
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    Handle: RePEc:zbw:wzbism:spii200404

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    1. Måns Söderbom & Francis Teal, 2001. "Firm size and human capital as determinants of productivity and earnings," CSAE Working Paper Series 2001-09, Centre for the Study of African Economies, University of Oxford.
    2. Dunne, Paul & Hughes, Alan, 1994. "Age, Size, Growth and Survival: UK Companies in the 1980s," Journal of Industrial Economics, Wiley Blackwell, vol. 42(2), pages 115-40, June.
    3. Audretsch, David B, 1995. "The Innovation, Unemployment and Competitiveness Challenge in Germany," CEPR Discussion Papers 1152, C.E.P.R. Discussion Papers.
    4. Geroski, Paul A & Machin, Stephen & Walters, Christopher F, 1997. "Corporate Growth and Profitability," Journal of Industrial Economics, Wiley Blackwell, vol. 45(2), pages 171-89, June.
    5. Andrea Schertler, 2000. "Venture Capital Contracts: A survey of the recent literature," Kiel Working Papers 1017, Kiel Institute for the World Economy.
    6. Schertler, Andrea & Stolpe, Michael, 2000. "Venture mania in Europe: Its causes and consequences," Kiel Discussion Papers 358, Kiel Institute for the World Economy (IfW).
    7. Gompers, Paul A., 1996. "Grandstanding in the venture capital industry," Journal of Financial Economics, Elsevier, vol. 42(1), pages 133-156, September.
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    Cited by:
    1. Engelhardt, Lutz, 2005. "Geschäftsmodelle und nationale Institutionen: Ein Vergleich britischer und deutscher Neuemissionen aus der IT-Service- und Softwareindustrie 1996-2002," Discussion Papers, Research Unit: Institutions, States, Markets SP II 2005-01, Social Science Research Center Berlin (WZB).

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