Figure 2: Total Portfolio Volume Held by Members of the BVK (in € Billion)27
16.6
15.8
10.7
1983 1985 1987 1989 1991 1993 1995 1997 1999 2001
After German reunification in October 1990 the number of newly established businesses
increased.28 Once again, the government offered special funds to foster start-ups and early-stage
investments and now also to encourage investment in the newly formed German states.29 In
addition changes in legislation, with regard, for instance, to the law of UBGs, were carried
through.30 VC became an attractive proposition for investors in the German economy. A
continuous, almost linear growth of the German VC industry could be observed during the fourth
phase from 1991 to 1996. In 1996, the volume of the total VC portfolio exceeded € 3 billion.
In 1997, as the Neuer Markt was launched offering a further exit facility to venture
capitalists, the German VC industry entered into a unique boom period. Although buy backs and
trade sales were still the preferred exit mechanisms for venture capitalists, the opportunity to exit
the portfolio by means of an IPO became a feasible option. While in 1996 about 6.7% of the
27 These numbers are taken from the BVK Statistik (2002).
28 Numbers are offered by the Institut für Mittelstandsforschung (IFM): http://www.ifm-bonn.de/dienste/gruend.htm
29 Details on the programs are listed on the internet page of the Bundesministerium für Wirtschaft und Technologie:
http://www.bmwi.de.
30 The regulation of UBGs has been relaxed by the third Finanzmarktforderungsgesetz of 1998. Among other things
the changes implied that UBGs had no more aspirations towards a listing at a stock exchange. Nowadays the
financing of small to medium-sized companies is the first and foremost aim. Moreover, the requirement to form a
stock corporation (AG) was withdrawn. For more details see Vollmer (1998).
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