1. Innovation and E t
I ti d Entrepreneurship i
hi in
Germany
German Technology and Life Sciences Startup Bridges with Silicon Valley
EEITL Seminar
Stanford University
Dietmar Harhoff
Dietmar Harhoff
University of Munich
February 6th 2012
F b 6th, 2012
1

2. Agenda
• The LMU Entrepreneurship Center
• Research and I
R h d Innovation in Germany
ti i G
• Entrepreneurship and VC in Germany
• German Silicon Valley Accelerator – A New Bridge ‐
History, Concept and Outlook
2

3. THE LMU EC OF TODAY IS THE RESULT OF JOINED EFFORTS
2000 2007 2008 2011
Timeline
Initial donation of Winner of major establishment of Development of
500,000€ from R lf
500 000€ f Rolf governmentt grant -
tt t formal structure
f l t t the major
Dienst, Founder of 400,000€ per year and creation of entrepreneurship
Wellington Partners to for 3 years LMU EC Lab community in the
Prof. Dietmar Harhoff 2007-2010 region of Munich
Students
100 600 700 1000
per year
Number of
incubated 0 0 16 49
start-ups
Number of
industry 1 1 2 18
partners
Page 3 July 2011

4. WHAT WE PROMISED AND WHAT WE ACHIEVED: THE LMU EC AS A
CATALYZER FOR ENTREPRENEURSHIP
Mission Milestones achieved in 3 years
Expansion of course offering from
We educate tomorrow‘s
Teaching 1 faculty in 2007 to all 18 faculties
entrepreneurial leaders of the LMU in 2010
49 start-ups and over 120 new jobs
We support the creation
Lab in 43 months and over 4 million € in
of successful ventures financing raised for founders & start-ups
Over 7‘000 members
We promote a culture of
Community in our online community portal
entrepreneurship www.entrepreneurship.info
We make outstanding contributions 5 research projects in the fields of
Research entrepreneurship and intrapreneurship
in entrepreneurship research
Page 4 July 2011

5. LMU Entrepreneurship Center COMMUNITY
Dr. Thomas Erich Lejeune, Walter Gunz,
Strüngmann,
Strüngmann Selfmade entrepreneur Founder of Media
Founder of Hexal Markt
Mark Zuckerberg,
Founder of Facebook
Oliver Samwer, Arndt Kwiatkowski, Heinz Herrmann
Internet entrepreneur Internet pioneer Thiele, Knorr-Bremse
Thiele Knorr Bremse
Page 5 July 2011

6. LMU Entrepreneurship Center LAB: SUCCESSFUL EARLY-STAGE
INCUBATOR FOR 49 START-UPS
Our Support Services: Currently 49 Teams (Selected Examples): Key Success Indicators:
Material * • Over 120 jobs created
Support
* • Over 4 M€ of Angel & VC financing
* * for the start-ups
Coaching and • Over 1.7 M€ in government
Mentoring funding for founders of 28 teams
• Survival rate of over 85% 6
* * months after I
h f Incubator exit
b i
Financing Search *
Support • Various Awards for LMU EC Start-
ups, ie. Munich Business Plan
* Competition, Start-up of the
p p
Month, Financial Times, Tesla
Award, German Multimedia Award
Training & Seminars
etc.
* 35% of all exiting teams have recieved Angel or VC financing
Page 6 July 2011

7. LMU Entrepreneurship Center: Structure and Governance
Ludwig-Maximilians-University
München
Foundation for
Entrepreneurship at
the LMU München
Innovation Chair
A model for future
Tech Transfer Center & Cooperation 100% cooperations between
Spin Off Services agreement* subsidiary universities and
businesses
Te
LMU Entrepreneurship
Center
LMU
(Cross-faculty i tit ti
(C f lt institution Entrepreneurship
within the LMU) GmbH
* Cooperation agreement between three parties: LMU München, Foundation and
GmbH
Page 7 July 2011

8. Research and Innovation in Germany
Research and Innovation in Germany
Most of
Most of the slides used in the
in the
following slides orginate from
annual reports of the Expert
Commission Research and
Innovation.
The next report „Gutachten 2012“
will be handed to Chancelor
Merkel on February 29th, 2012.
English language pdf versions
available at www.e‐fi.de.
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9. Research and Innovation in Germany
Research and Innovation in Germany
• R&D* performed by three major groups
– enterprises (46.9 billion € – 67%)
– universities (12.6 billion € ‐ 18%)
– public research organizations (10.2 billion € ‐ 15%)
• overall R&D intensity now at 2.82% of GDP
(
(since 2009 en par with USA)
p )
• R&D as well as exports strongly focused on
automotive, chemicals
automotive, chemicals and machinery
• much smaller role of ICT, pharma and life science
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*Note: data for 2010

10. Research and Innovation in Germany
Research and Innovation in Germany
R&D Expenditures as a Share of GDP in Selected Countries
10

11. Research and Innovation in Germany
Research and Innovation in Germany
• G
Germany is not among the l di R&D
i h leading R&D performers
f
(top group comprised of Sweden, Finland, Korea,
Japan)
Japan)
• structural reasons: industries with high R&D intensity
not strongly
not strongly represented in Germany
in Germany
• export success almost exclusively driven by
established industries
• result: political economy not always in favor of VC
and entrepreneurship (with some notable changes
recently)
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12. Entrepreneurship and VC in Germany
VC in Germany
• G
Germany has b
h been l i other countries in extent of
lagging h i i f
entrepreneurship, startup rates and VC investments.
• Si
Since mid‐1990s various public support schemes t
id 1990 i bli t h to
stimulate entrepreneurship
– public support for VC funds
VC funds
– early‐stage support for foundes (EXIST founder stipends)
– build up
build‐up of entrepreneurship centers at universities
– a.k.o. Bayh‐Dole for Germany (in 2002)
• moderate success with some clusters being particularly
moderate success
successful
• no breakthrough yet for VC tax treatment and
VC tax treatment
regulation
12

13. Entrepreneurship and VC in Europe
VC in Europe
VC Investment by Country of Portfolio Company as a Share of GDP in
Selected Countries
13

14. Entrepreneurship and VC in Germany
VC in Germany
• Why are there no hi h
h h high‐growth startups i
h in
Germany (Europe)? Why no SAP‐repeat?
• Main reasons?
– lack of research results and ideas
lack of
– lack of capable entrepreneurs
– cultural aspects
– lack of appropriate regulation and incentives
– structural reasons: European market
t t l E k t
fragmentation
… and some bright spots despite the complaints
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15. Early Stage Venture Capital Investments
2008‐ 2011 by Bundesland
2011 by Bundesland
140 Baden‐Württemberg
Bayern
120 Berlin
Brandenburg
100 Bremen
Hamburg
ent(M€)
Hessen
80
Mecklenburg‐Vorpommern
Investme
Niedersachsen
60
Nordrhein‐Westfalen
Rheinland‐Pfalz
40 Saarland
Sachsen
20 Sachsen‐Anhalt
Schleswig‐Holstein
0
2008 2009 2010 2011**
Source: BVK/PEREP Analytics. ** 2011 data estimated based on Q1‐Q3 data.
15

16. German Silicon
German Silicon
Valley Accelerator
y
A New Bridge
History, Concept
History, Concept and Outlook
16

17. GSVA history
GSVA history
• by no means a new concept
y p
• inspired by Austrian, Canadian, Scandinavian, … examples
• very helpful report on bridging organizations by Eilif
y p p g g g y
Trondsen
• model validated with in‐depth research of several startup
cases, including Aloqa (an LMU startup)
• concepts refined and financing secured in 2010 and first
half of 2011
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18. GSVA program
GSVA program
• 3 months participation in GSVA program for selected
p p p g
startups
• 3 months extension possible
• program over 3 years, EUR 2.5m
• 42 companies, 19 extended stays
• hosted in Plug & Play Tech Center, Sunnyvale
• main sponsor BMWi (90%), external sponsors 10%
p ( ), p
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19. Who can apply?
Who can apply?
• incorporated in Germany
p y
• typically not older than 3‐5 years
• ITC space (HW, SW, internet, mobile, wireless, medical
p ( , , , , ,
devices)
• business plan demonstrates growth potential and
international expansion plans
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20. GSVA objectives
GSVA objectives
• understand Silicon Valley and US „Business
y „
Environments“
• develop and understand a US go‐to market strategy
• gain market feedback from US beta‐customers
• benchmarking of business plan
• introduction to fundraising process (business angels/VC
investors)
• successful networking / pitching
• benchmarking of management team
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21. GSVA is successful when …
GSVA is successful when
• … startups successfully enter the US market
p y
• … startups establish a presence/operations in Silicon Valley
• … startups will be more successful in its German/European
p / p
markets upon return
• … overall learning (networking, go‐to market strategy
definition, team mapping etc.)
• … GSVA becomes a permanent two‐way bridge for contacts
between founders, mentors, venture capitalists, business
angels
l
21

22. GSVA services
GSVA services
• office space
p
startups are provided with a dedicated semi‐open office
space for 1‐2 persons including conference room access
and high speed internet.
• kick‐start workshop
startups participate in a 3 day training camp to provide an
t t ti i t i 3 d t i i t id
initial overview
• networking events
networking events
startups have access to network and community events
• visa support
visa support
startups are supported in obtaining appropriate US visa
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23. GSVA mentoring
GSVA mentoring
• mentoring fine‐tuned to each startup’s needs
g p
• core group of mentors plus specialized mentors
• Startup to be accompanied by one lead mentor
p p y
• particularly important themes
• US go‐to‐market strategy
• marketing, sales and business development
• communication & presentation skills
• financing strategy
• team building and completion
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24. GSVA team
GSVA team
Chairman: Dietmar Harhoff
CEO: Dirk Kanngiesser
VP BusDev: Oliver Hanisch
mentors
Advisory Committee Silicon Valley
Steering Committee Germany
Steering Committee Germany
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25. Important GSVA dates
Important GSVA dates
• 2012/2/1 – first startups have arrived at GSVA
/ / p
• 2012/2/2 – launch event GSVA Silicon Valley
• 2012/3/28 selection of Q3/Q4 2012 participants
2012/3/28 – selection of Q3/Q4 2012 participants
• 2012/3/28 – launch event GSVA Berlin at TU Berlin
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26. GSVA contacts
GSVA contacts
www.germanaccelerator.com
g
dirk.kanngiesser@germanaccelerator.com
g @g
+1 (408) 840 3475
dietmar.harhoff@germanaccelerator.com
+49 (89) 2180 2239
oliver.hanisch@germanaccelerator.com
+1 (408) 320‐5720
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