Bitkom says startups need public and private funding (Photo: Ford)
Many German startup companies say they are having trouble getting enough money to develop their businesses.
According to a survey by the country's high-tech association - Bitkom - 55 pc of company founders say that acquiring startup capital is the single biggest barrier to getting new businesses off the ground. Only 34 pc say they have sufficient funds for the next 24 months.
The survey addresses Â worries that Germany and Europe as a whole lack the kind of startup culture that has given Silicon Valley a strong lead in the global high-tech industry.
Bitkom says that getting the funds is a major issue, but getting funding quickly is equally problematic in Germany.
"The startup financing situation may have improved in Germany in recent years, but missing capital continues to be the biggest hurdle for teams from Germany to become internationally successful," Bitkom managing director Niklas Veltkamp said in a statement. "In addition, startups feel it takes too long before financing rounds are concluded."
New companies need on average 2.4 million euros overÂ two years. Bigger startups need more money. Bitkom estimates that companies with three employees on average require 640,000 euros, whereas startups with more than 20 employees need about 4.7 million euros in the first two years.
Public funding plays an important role in helping startups, but attracting more venture capital is equally crucial, Bitkom says. The association says Germany's tax regime treats such private-sector investments less favorably than other countries' tax authorities.