Long gone are the days when entrepreneurs would start their business right in their hometown. Nowadays, the financial, social and digital advantages that each city can offer to startups have become a lot more important. Since founders often have the agony of choice when searching for a suitable place, we like to take a closer look at cities with promising startup hubs worldwide in a regular basis to determine their pros and cons.
Yes, we know the road to innovation can be tough. But it’s more important than ever to rescue businesses and bring them safely to the path of digital transformation. There sure are several ways to reach this goal. But examples of money pouring into R&D that left the companies empty-handed show that business incubation of startups is the better way for corporations to develop new technology and business solutions. Startups have the disruptive power and lateral thinking ability that are often missing in established companies. And they already come with the advanced, game-changing innovation that might be the solution to your problems! But in order to achieve a fruitful co-operation, a fertile ground is necessary. So better read on and learn how to successfully incubate startups in our quick guide for incubators!
The digital disruption brings great challenges for every business. To stay competitive, companies need high adaptability, innovation and market know-how. But don’t worry, you are not alone! Innovative startups and experienced corporates can team up and use the enormous potential that lies in the synergy of their strengths. And yes, no matter if you are looking for an innovative startup or an experienced corporate – there is a company out there that offers those qualities that complement your business. Together you will be able to conquer all challenges! But how to find your perfect business match? That’s what CODE_n CONNECT is all about. Read more to learn about the benefits of CODE_n CONNECT for startups and corporates.
Many reasons why startups and corporates seek collaboration are clear: startups benefit from funding, expertise as well as from a business and sales network, while large corporates profit from startups’ innovative power, operational speed and creativity. A large percentage of corporates stated that they require startups to enable innovation for their business. In an equal collaboration, the vital effect of startups for the innovation process of big companies meets the need of startups for a powerful patron. But when new and established businesses come together, they most likely face challenges like a culture clash or the struggle of control and independence. However, equal and successful collaboration is possible! Find out how with the best practices in incubations, accelerations and partnerships.
Up to five times a year, the German-American Chamber of Commerce in New York offers German startups the opportunity to gather valuable practical experience in the US. During the 5-day STEP Program, the participants meet business angels and venture capital investors in New York. Andrea Diewald, Director Innovation & Startup Relations, knows the location like the back of her hand: we spoke to her about the North American market, the differences in mindsets and the key essentials for startups.
What makes the US market so interesting for German startups?
Andrea: The American market is the largest single market in the world. There are 320 million Americans across 50 federal states, which is a huge area of land. The country is characterized by a society that is fundamentally willing to invest: Americans like having things, they follow new trends and their buying power and mindsets constantly push the technology-driven market forward. There are of course a few hotspots on the East and West coasts, as well as a few cities in the middle, such as Chicago, where the willingness to invest is particularly strong.
So alongside Silicon Valley, do these hotspots also include New York City?
Andrea: Yes. When it comes to startups, New York is increasingly on the ascent, since Silicon Valley has now become something of a challenge. The investors there are extremely spoilt, and won’t even speak to everyone anymore. You need first-class introductions and a superb business model to even get an audience there. The cost of good staff is also enormous, and startups have to compete there with the very big firms. In New York, the situation is different – for now – and the conditions are much better as the city is home to a wide range of industries, including fashion, the media, and the insurance sector. There are also the two major industries of IT and FinTech, but consumer goods and service sector startups have plenty of opportunities here too. On top of all that, the New York area is home to as many as 20 million people, and the city has incredible economic potential.
When did your startup program in New York City launch?
Andrea: As a chamber of commerce, we have had a presence in New York for over 60 years, however our program only came into being at the end of last year and has already been held successfully three times. There have been various deals, and a total of seven startups that we’ve networked are about to participate in a Series A investment. We’re particularly proud of one FinTech startup that has programmed software to keep lawyers’ costs under control. We formed this startup via our network with the New York Times, which also showed an interest due to its many legal conflicts and lawyers. The contract was concluded just recently. It’s a great example of how New York is able to connect different industries. More…
Silicon Valley is a magnet for startups seeking investment. Its “cool” image is attractive to young entrepreneurs seeking to make their fortunes. The influx of these billion-dollar wannabes is reminiscent of the California gold rush in the 19th century.
Venture capital firms on Sand Hill Road in Menlo Park, California, have investment reserves that exceed many countries’ GDPs and there are more VCs and angels scattered across the Bay Area than anywhere else in the world. This may make Silicon Valley look like tech’s El Dorado but London’s streets are still paved with gold.
Government support and US big businesses boost London tech scene
Much is made of the lack of investment money in London. Financial support is improving as the UK’s capital city establishes itself as Europe’s foremost tech startup zone. The British government has played a large part in this and has encouraged large US tech companies to set up incubators and accelerators which offer cheap, or even free, accommodation for startups during the vulnerable period when they are establishing themselves.
This vote of confidence from the American mega-companies is beginning to make London more competitive but, to exert any real pressure on Silicon Valley, there still needs to be a greater pool of funding to support later stages of company development, enabling startups to mature and stand a better chance of thriving. According to Tech City, a government funded initiative to support the UK’s startup ecosystem, the money available is increasing annually and has grown tenfold since 2010 to $1.4bn last year. More…
What exactly is ‘angel investing’? What do angel investors expect of startups? How should startups position themselves to attract angels and get them excited about their business idea? The first ‘angel labs’ held in Germany – an in-depth workshop for angel investors which was held mid November at GFT in Stuttgart as part of the CODE_n EVENTS – gave us a chance to talk to experts about the role angel investors play during the formative beginning of a startup. The answers to our questions provided some interesting insights…
What exactly is an angel investor and how is this different from a venture capital (VC) investor?
Matthias Götz (through his company Wert8, Götz consults private individuals and companies on investing in startups):
In the traditional sense, an angel investor bridges the gap to the next round of financing. That is, when a company is founded it takes the first steps on its own and can soon determine whether the business model is sustainable without money from outside or whether third-party capital is necessary.
The moment I need outside funding, an angel investor is the first port of call. Angels are there and waiting in the local area, and in Germany there are far too few VC providers for startups to turn to when they need one. This is the gap that angels can fill. Thankfully we have a vast pool of enthusiastic angels, who have familiarised themselves with these issues. They look at the business model in the early days and potentially only fund this initial phase to then give the green light on maybe continuing with a VC investor. That said, we are noticing more and more that the VC investor isn’t even needed in the end. These days angels can bring in just as much money as VC funding.
What should I do if I have a startup and I want to attract attention from an angel investor?
Getting discussions going between startup founders and seasoned entrepreneurs is a fundamental aspect of the CODE_n ecosystem. That’s why CODE_n is hosting a one-day boot camp for Angel investors on Friday, November 14, 2014. The meet-up is directed at business angels and anyone who would like to become one. It will provide initial pointers on how to support promising startups with action and advice.
The format – dubbed Angel Labs – hopes to attract companies and private investors looking to enter the swiftly developing startup scene with the aim of offering dedicated support. Angel Labs have already been organized at various business hot spots across the globe, but never in Germany. This meet-up has been planned as part of CODE_n EVENTS and will be held at GFT headquarters – a genuine debut event for Germany.