This is how young companies are overcoming the bias against startups and getting funded
It may sound unusual for the city that has made its name as the banker of Europe, but local companies in Frankfurt are facing difficulty finding funding.
While personally rejecting the idea that raising a large round is the end all of the startup world — preferring to focus on the technology and viability of the businesses involved — the ability of a startup to bring in investors that will back them as they go through their growing pains can make or break a young company.
There have of course been some success stories this past year as insurtech startup Clark raised €13.2 million, saving app Savedroid took home €1 million, and automated investment advisor (aka. Robo Advisor) Ginmon pulled in €4 million over the summer, which was led by Passion Capital out of London.
However, Dr. Thomas Funke of Frankfurt’s new startup hub Tech Quartier tells Geektime that the scene needs more activity on the funding front. Seed funding is hard to come by, adding that the banks ask a lot of questions (and perhaps the wrong questions), which makes loans not much of an option.
Part of the issue that he points to is the small number of local VCs and angels, forcing the companies to look for corporate investments that can take a long time to materialize. Funke believes that the banks should be giving out more seed money based on conditions that are more appropriate for the startup business, and not based on traditional understandings of who should qualify for an investment.
Until the companies there 1) begin to mature and 2) become highly scalable, produce large exits or IPOs, or show…