24 of Germany’s leading venture capital funds have joined forces to launch the German Venture and Growth Forum and publish the German Venture & Growth Playbook, which uses market data to highlight the venture capital asset class’s risk-return dynamics and investment potential.
The news is launching today at the “Future at the table”, a side event to the SuperReturn conference in Berlin featuring the Federal Minister for Economic Affairs and Energy, Katherina Reiche, the Personal Representative of the Federal Chancellor of Germany for Investments, Martin Blessing, and the CEO of KfW Group, Stefan Wintels.
The Playbook shows that with the right approach, €15 billion in existing private capital can be activated annually for German growth companies – while meeting market-aligned return expectations for investors.
More investment in venture capital can deliver stronger returns, help cushion portfolios during turbulent markets, and accelerate the growth of innovative businesses and the future-proofing of employment in Germany.
Today, VC-backed companies account for 40 per cent of the market capitalisation of the global top 100 and employ 2.3 million people worldwide. In Europe, analyses estimate that startups have the potential to create 3.6 to 8.1 million additional jobs and generate up to $3.3 trillion in additional market capitalisation, provided capital is available.
With a strong industrial base and deep talent reserves, Germany's main structural constraint is access to capital. German institutional investors manage around €2.8 trillion and could, even with allocations in the low-percentage range, channel urgently needed additional capital into German and European growth companies.
This has long been common in markets such as the US – without special funds, without government guarantees, and with market-aligned return expectations.
Three entry points for institutional investors
The playbook serves as a guide for allocations by pension funds, insurance companies, professional pension schemes, and foundations.
Recognising that investors start from different positions, the German Venture & Growth Playbook presents a range of accessible approaches to investing in venture and growth capital, aligned with varying levels of expertise and organisational capacity.
Single funds offer direct exposure to the performance of typically 20 to 30 portfolio companies with a clearly defined thematic or regional focus. The funds’ general partners actively support their portfolio companies from the founding phase through to exit and invest in the funds themselves, creating a structural alignment of interests between fund management and investors.
Funds of funds further lower the barrier to entry. They invest simultaneously in numerous individual funds and handle the entire fund selection and due diligence process, making them particularly suitable for investors without their own VC team. The Wachstumsfonds Deutschland (Growth Fund Germany), which was launched at the end of 2023 with a volume of €1 billion, is a prominent example of this approach.
Co-investments enable direct participation in individual transactions alongside established lead investors, offering higher return potential, a targeted risk profile, and typically lower fees. They are suitable as a complement to an existing fund allocation or for investors with a dedicated in-house investment team.
According to investor Alexander Kudlich, the data is clear: the growing economic gap between the U.S. and Europe is largely based on a lack of growth capital.
“Companies like the Magnificent Seven would never have emerged without VC investors. Startups don’t just develop disruptive technologies – they build the industries of the future. Germany has the resources to finance these industries precisely.
With the German Venture and Growth Forum, we aim to address potential concerns and highlight concrete solutions for a reevaluation of VC.”
Christian Nagel, Co-Founder and Partner at Earlybird contends that the current generation of founders and young companies have the potential to kick-start Germany’s growth engine and build future industries in areas such as AI, fusion energy, robotics, quantum technology, and also in the defence and space sectors:
“To achieve this, we need to scale these companies with the appropriate resources.
Only in this way will we build the next generation of DAX 40 companies that keep the German business model of a technology-driven export economy alive.”
According to Dr Tanja Emmerling, Partner at High-Tech Gründerfonds:
“As a group of more than 24 German funds, our goal is to lower the barriers to entry for institutional investors and thereby lay the foundation for a high-performing capital structure – for innovation, startups, growth companies, and successful IPOs in Germany and Europe.”
The German Venture & Growth Playbook is now available for download.
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