Start-ups: These opportunities and challenges exist

Germany is currently experiencing an economically critical phase and hopefully a soon-to-come political realignment. Is this affecting the start-up scene?

Dr. Barbara Mehner: "Yes, absolutely! Start-ups in the B2B sector, which is our main target group, are particularly feeling the current economic uncertainty. Companies are cautious about investments and expect start-ups to demonstrate their added value even more clearly and quickly. This means that young companies need to position their solutions more precisely and prove that they are economically viable.

However, there are also opportunities: start-ups that address real market needs, adapt flexibly, and pivot can emerge stronger. We can already observe this in the Munich ecosystem - companies that are perceived not just as 'nice to have' but as essential innovation drivers continue to assert themselves successfully. Specifically, start-ups that can deliver clear savings to corporate customers have good chances. The political situation is also a major uncertainty factor and makes it difficult for start-ups to plan in the long term."

What political adjustments do start-ups and their incubators need to meet the demand as a constant source of innovation?

Mehner: "To sustainably promote innovation in Germany, politics need to provide reliable framework conditions, make quick and bold decisions, and invest strategically. Currently, uncertainties surrounding public funding affect many founders who rely on these resources. Equally challenging are frequently changing legislations, such as the supply chain law, on which young companies have partly built their business models. Here, we need long-term time horizons that young companies and their investors can rely on. We wish for large, coordinated initiatives with a clear focus on future technologies, where Germany already has strengths and can achieve top international positions.

At the same time, Germany must become more attractive for both investors and talents - through competitive financing models, less bureaucracy, and better conditions for business start-ups. Incubators play a key role in this ecosystem and need targeted support and a constant, open exchange on equal terms with politics to further develop practical framework conditions."

More money is always welcome, of course - but let's look at the capital: Are there still adequate resources here, is there enough money flowing for start-ups?

Mehner: "In the early phase, there are still financing opportunities, but for larger financing rounds, there is still a massive lack of capital in Germany and Europe. Especially compared to the USA, the gap is large: While huge sums are invested in growth companies there, less than 20 percent of the volume is available in the EU - despite a larger population. A crucial lever would be to open up institutional investors like pension funds and insurance companies more to venture capital. There is enormous potential here to sustainably promote the scaling of innovative companies in Europe."

Let's look at the networking of start-ups with the industry: Are there still adjustments needed here?

Mehner: "Definitely. Many start-ups fail due to lack of access to the right decision-makers, lengthy decision-making processes, and bureaucratic processes with potential customers. Existing networks and programs need to be more focused on operational decision-makers to make collaboration more efficient.

To truly overcome these barriers, initiatives are needed with these potential customers that offer clearly defined pilot phases with dedicated contacts within the companies. Such programs bring start-ups and companies together faster, which also means a quicker deployment of new technologies in the industry - a win-win situation.

Additionally, we need to focus more on SMEs, and start-ups and SMEs should develop a better understanding of each other's needs and potentials. SMEs are often looking for innovations, new technologies, and cost-efficient processes. They are also often quick in making decisions and willing to try new things. Start-ups often underestimate the potential of collaborating with these companies. We notice this repeatedly.

To leverage this potential, greater awareness is required on both sides. Programs like FamilienUnternehmerTUM offer a platform that provides medium-sized companies with targeted access to start-ups, new technologies, and innovation networks."

What role do you play in entrepreneurship within the ecosystem surrounding start-ups?

Mehner: "For over 20 years, we have been bringing together talents, founders, science, investors, established companies, and politics with the clear goal of sustainably strengthening innovation and entrepreneurship.

We see ourselves not only as a neutral platform that builds bridges but also as an active designer and initiator. Despite challenging conditions, we do everything we can to ensure that our start-ups grow, complete successful funding rounds, create jobs, and drive technological progress. For this, collaboration with established companies in the ecosystem, such as SAP or Siemens, is essential and contributes to a competitive economic location."

Do you see any focus areas for start-ups in the Munich area with regard to certain technologies?

Mehner: "Definitely - Munich has established itself as a leading deep-tech hub in Europe in recent years. Currently, many start-ups are emerging in areas such as space, quantum technologies, climate tech, and industrial tech. But artificial intelligence also plays a central role."

What is your outlook for the scene in the coming years?

Mehner: "Tech start-ups are a central driver for the economy, society, and the environment - and their influence will continue to grow in the coming years. At the same time, other countries like China and the USA are deliberately investing more and setting clear priorities for competitiveness - Germany must catch up here to avoid falling behind in global comparison. Now is the time to take the right measures to not only facilitate start-ups but also ensure the scaling and long-term success of these companies - and thus the German economy."