The Genesis of Venture Capital: Lessons from the German Experience

Posted: 4 Nov 2009

See all articles by Ralph Becker

Ralph Becker

affiliation not provided to SSRN

Thomas F. Hellmann

University of Oxford - Said Business School; University of Oxford - Said Business School

Date Written: 2005

Abstract

The initial attempt at promoting venture capital (VC) in Germany was a massive failure.The history of the first German VC fund, the Deutsche Wagnisfinanzierungsgesellschaft (WFG), provides researchers with a means of studying the factors that impact VC success or failure.Many factors contributed to the failure of the WFG, including improper contracting and governance structures, conflicts of interest between the government and banks, and problematic institutional and economic structures, including the role of the stock market in the development of the VC industry. To study the failure of the WFG and the influence of these factors, the theoretical foundations for the research and the methodology are discussed.A review of the history and of the functioning of the WFG is provided.Following this review of the WFG, the problematic factors influencing the performance of the WFG are explored and their significance is discussed.In closing, changes to the German system are recommended in order for the VC market to develop and succeed. (AKP)

Keywords: Venture capital funds, Deutsche Wagnisfinanzierungsgersellschaft (WFG), Public policies, Stock markets, Venture capital, Banks, Failure analysis, Firm governance, Organizational structures, Program evaluation

Suggested Citation

Becker, Ralph and Hellmann, Thomas F., The Genesis of Venture Capital: Lessons from the German Experience (2005). Venture Capital, Entrepreneurship, and Public Policy., Vol. , p. 33-67 2005. Available at SSRN: https://ssrn.com/abstract=1496780

Ralph Becker (Contact Author)

affiliation not provided to SSRN

No Address Available

Thomas F. Hellmann

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain
+44 (0)1865 288937 (Phone)

HOME PAGE: http://www.sbs.ox.ac.uk/community/people/thomas-hellmann

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain
+44 (0)1865 288937 (Phone)

HOME PAGE: http://www.sbs.ox.ac.uk/community/people/thomas-hellmann

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