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Innovation, entrepreneurial spirit and know-how are the foundation of our successful startup ecosystem in Germany. This vibrant startup culture links members closely to each other and attracts not only investors, but also established companies as well as the business community.

EY Startup has found its task in connecting different parties within the ecosystem for an ideal exchange. We support your startup in all relevant fields such as strategic questions, tax, business development, legal counseling or financial decision making. On this page you will find out about our know-how, events, activities and EY contacts in your region.

Updates

EY Startup-Barometer Germany – January 2024

German startups raise just EUR 6 billion in investment capital in 2023, a decline of 39 percent compared to 2022 and 65 percent compared to 2021. The number of financing rounds also falls by 15 percent. However, investment in AI startups quadruple.

You can find more information here.

EY Startup

Early stage

Is your business plan gaining traction? We can help you with your financial reporting, the identification of state funds for your sustainability and R&D activities, support your approach reaching out to investors, and many other topics that help you to bring your idea forward. These steps involve also setting up a strategic plan for funding your startup (via private or public channels), as well as the valuation of your business model.

Formats:

Scaleup

Sales are increasing and your company is growing. We are at your side when it comes to financing the innovative development of your products and services through public funding, raising venture capital and putting growth on a sound footing. Our experts will provide you with advice and support to ensure that your growth results in sustainable business success.

Formats:

  • CEO Roundtable
  • Investor Dinner
  • Funding Matinée (selection process)

Grownup

Your Grownup grows and establishes itself as a brand.You already participate succesful in the market? We integrate you into innovation ecosystems and assist you with further financing rounds, up to a partial exit or IPO. On the way to new milestones you have to find the right answers to bigger challenges.

Formats:

  • IPO Readiness Assessment
  • Funding advice

Investors

You are looking for innovative solutions, smart investments and a great startup team? We organize networking and matchmaking events, support investment monitoring & value creation and conduct target screenings for you.

Corporates

To connect your startup to established companies is something very important, we are happy to support you here. We bring startups together with German SMEs and communicate about the establishment of cooperations, the integration of your company as well as trend analyses (EY Startup Barometer). With our help, you could find the perfect partner for your startup to participate in innovative collaborations.

Other institutions

We also provide support on the regional level and direct on your site. Among other things, we help identify suitable funding programs and apply for tenders, as well as regional activities.

Events and Workshops

All Events and Workshops

News and Publications

EY Startup-Barometer Germany – January 2024
25.01.2024
German startups raise just EUR 6 billion in investment capital in 2023, a decline of 39 percent compared to 2022 and 65 percent compared to 2021.
Read more
EY Startup-Barometer Germany – July 2023
04.08.2023
Significant setback for the German startup scene: Compared to the first half of 2022, the total volume of investments was halved to €3.1 billion in the first six months of this…
Read more
EY Startup Barometer Germany – January 2023
12.01.2023
Despite market uncertainties and 43 percent less venture capital investments in 2022, the German startup industry recorded its second strongest full-year result. In addition, the…
Read more
EY Startup Barometer Germany – July 2022
29.07.2022
Despite the market uncertainties, investments in German startups remain at a high level: The total value of investments in German startups decreased by 20% in the first six months…
Read more
All News and Publications

Further topics

Contacts

Francesco Pisani

Francesco Pisani

Strategy and Transactions | EY Parthenon

Phone: +49 160 939 25657
Francesco.Pisani@parthenon.ey.com

Markus Fischer

Markus Fischer

TCF-Lead Advisory

Phone: +49 89 14331 23475
Markus.Fischer@de.ey.com

Dr. Thomas Prüver

Dr. Thomas Prüver

Head of EY Startup, TCF-Transaction Diligence

Phone: +49 30 25471 10164
Thomas.Pruever@de.ey.com

Christopher Schmitz

Christopher Schmitz

EYP-Transaction Strategy & Execution

Phone: +49 6196 996 13545
Christopher.Schmitz@de.ey.com

Jan Berodt

Jan Berodt

Audit

Phone: +49 40 36132 19541
Jan.Berodt@de.ey.com

Christoph Niemann

Christoph Niemann

Global Compliance & Reporting

Phone: +49 231 55011 24094
Christoph.Niemann@de.ey.com

Olivia Weindorf

Olivia Weindorf

Audit

Phone: +49 160 939 15133
Olivia.Weindorf@de.ey.com

Leif Aldinger

Leif Aldinger

TCF-Transaction

Phone: +49 160 939 17051
Leif.Aldinger@de.ey.com

Jochen Schmitz

Jochen Schmitz

Marketing

Phone: +49 6196 996 24035
Jochen.Schmitz@de.ey.com

Michael Bätz

Michael Bätz

Audit and Finance

Phone: +49 160 93923247
Michael.Baetz@de.ey.com

Arash Nasirifar

Arash Nasirifar

Assurance

Phone: +49 160 939 29559
Arash.Nasirifar@de.ey.com

Nina Reinecke

Nina Reinecke

Law

Phone: +49 160 939 21318
Nina.Reinecke@de.ey.com

Frederick-Maximilian Schnoor

Frederick-Maximilian Schnoor

Financial Accounting Advisory Services

Phone: +49 711 9881 27181
Frederick-Maximilian.Schnoor@de.ey.com

Martin Neutzner

Martin Neutzner

Tax & ESOP

Phone: +49 711 9881 17291
Martin.Neutzner@de.ey.com

Dr. Ines Fritz

Dr. Ines Fritz

Law

Phone: +49 89 14331 22580
Ines.Fritz@de.ey.com

Varinia Prüfer

Varinia Prüfer

Business Development

Phone: +49 30 25471 21522
Varinia.Pruefer@de.ey.com

EY Startup-Barometer Europe – March 2020

After a financing record last year, a massive drop in startup financing is now expected due to the current corona crisis. In 2019, the total value of startup financing rose by 46 percent to 31.1 billion euros compared to the previous year. However, the number of financing rounds increased by only one percent to 4.246.

You can download the EY Startup-Barometer Europe here.

Venture capital and startups in Germany 2019

Digital transformation of traditional industry sectors is unstoppable: German Tech startups are rising to become new market leaders. Further insights can be found in our new Venture Capital Study.

You can download the Venture Capital Study here.

EY Startup-Barometer Germany – January 2020

The financing boom in the German startup segment continues: Young companies were able to raise more fresh capital in 2019 than ever before. In total, they received EUR 6.2 billion. The latest financing rounds and further insights can be found in our new “EY Startup Barometer”.

You can download the EY Startup-Barometer Germany here.

How unicorns know when an IPO is the right strategic option

More unicorn companies are choosing IPOs. Why? Why now? And what should they be doing to prepare?

Ancient Greeks and Romans once described unicorns as incredibly fast and light on their feet, with a horn that was highly prized by merchants and investors. It’s a characterization that can also be attributed to today’s unicorn companies. These privately held companies have been in business for less than 10 years. Yet, they have already reached the US$1b threshold. Most often, they’ve done it by being disruptors — turning markets, or entire industries, on their heads.

The path to unicorn status may vary for each founder and company, but eventually, they all reach an exciting but profoundly challenging milestone: the moment at which the founder must consider the company’s funding and exit options.

 

For unicorn companies, the options are many, the choices complex

For many unicorn companies, the decision to stay private, sell or go public is often multifaceted.

Stay private. Staying private is enticing for many founders of unicorn companies. With lots of liquidity still in the market and more investors willing to pour increasing sums of money into unicorns, founders may prefer to keep their autonomy and their companies out of the eye of the public glare. However, staying private may also mean limiting the company’s future growth. Additionally, unicorn companies will at some point have to provide a return on investment to their financial partners.

Look for a buyer. When staying private is no longer an option, some fast-moving unicorns may opt for acquisition rather than IPO. Finding an incumbent with deep pockets and scale allows unicorn companies to reach their growth potential faster than trying to build it themselves. The downside, for founders in particular, is that the entrepreneurial spirit that allowed the company to flourish can be quashed amid the lumbering pace and bureaucracy inherent within most large organizations.

Issue an IPO. The primary advantage of an IPO is that it can provide access to capital in quantities that unicorn companies can’t find elsewhere. It also gives unicorn companies and their founders an opportunity to reward and retain the talent that has been critical to their success so far. It gives investors an opportunity to realize a return on their investment, and can boost brand profile and open up markets for new customers. It demands a governance structure and level of professionalism that credentializes the company as a legitimate force in the market. However, it also invites a new level of scrutiny from investors and regulators that unicorn companies may not be prepared for.

Undertake a direct listing as another way of going public. A direct listing offers unicorns an alternative strategic route to public markets. Unicorns can directly list existing shares without issuing new shares. However, a direct listing isn’t for everyone. Size really matters. A direct listing can work well for disruptors that already enjoy brand recognition and a significant private market valuation — like unicorns. A direct listing can further strengthen a brand and build confidence in the unicorn’s equity story. It also has the option of taking the second step of issuing new shares to raise further capital.

 

Unicorn IPOs are on the rise, both in numbers and in value

Since only a handful (they can literally be counted on one hand) of unicorn companies are positioned to even consider direct listing, a significant number have opted to issue an IPO. Between 2014 and year-to-date 2018, 103 unicorn companies have successfully issued IPOs, with total values exceeding US$80b.

More are on their way, and, for the most part, they’re getting bigger as they go. Thirty-three unicorns have issued IPOs year-to-date 2018, the highest number on record and up from a record-setting 27 in 2017. The median deal size of unicorn IPOs also increased substantially from 2017 to year-to-date 2018, from US$254m to US$417m.

 

A new high for unicorns: 33 unicorns have issued IPOs so far in 2018, up from 27 in 2017.

 

Two reasons why more unicorns are choosing the IPO value journey

Of all the drivers pushing unicorn companies toward an IPO in the next 12 months, there are two that stand out: the pragmatism of economics and the passion of personal achievement.

Unicorn companies want to take advantage of rich pools of capital and liquidity before they dry up

If we take the macroeconomic landscape at face value, we see a world awash in capital and liquidity, and interest rates remain low for now. With so much cheap money still floating out there, it seems almost illogical that a record number of unicorn companies would feel the rush to go public. Yet, there are concerns that ongoing geopolitical uncertainties in many markets may finally take their toll on the global economy and IPO sentiment. A slowdown in economic growth, combined with an increase in interest rates, could suck the liquidity from the market and lower IPO valuations. Unicorn companies want to have an opportunity to drink from the liquidity pool before it dries up. As such, we may see unicorn IPOs set another record in 2019 before declining if the economy cools.

Founders want to join the exclusive listed global tech club

Although economic considerations are both tangible and compelling, the more intangible driver of passion is a powerful force that few openly discuss. It strikes at the very heart of what it means and what it takes to be a successful entrepreneur.

There are many logical reasons why unicorns choose an IPO — brand, talent, funding. But never underestimate the power of passion in a unicorn company’s decision-making. Passion drives founders to pursue their ideas, even when everyone is saying they’re crazy, it couldn’t possibly work or that no one has done anything like it before. It gives them the confidence and unwavering conviction that their idea, product or service can change the way people think or feel or do. It also shapes how they make decisions. And what they define as personal achievement.

When founders get to the IPO stage, money is rarely the driving factor. They may want to diversify their wealth, but at its heart, founders want to reach that next personal milestone: joining the exclusive club of listed global tech companies. They want to be a part of an intimate inner circle of highly successful entrepreneurs and feel the adrenaline rush that comes with ringing the bell on the floor of the stock exchange.

 

There are many logical reasons why unicorns choose an IPO — brand, talent, funding. But never underestimate the power of passion in a unicorn company’s decision-making.

 

Is an IPO the right strategic option?

Because the reasons for issuing an IPO can be as nuanced and varied as the unicorn companies themselves, it is hard to definitively measure the value of going public. If we were to look at it in purely economic terms, based on pricing and first-day performance, generally the answer would be yes.

Performance-wise, unicorn IPOs generally experience healthy first-day pops (the rise in share price from the opening to the closing bell on the first day of public trading – typically 15% to 30%).

Over the long term, success can be measured based on two factors: whether it realizes the initial personal objectives of the founder, and whether it creates value for the company’s stakeholders. The former is easy to measure. In terms of the latter, IPO investors will measure value creation based on the promises made at the time of the IPO, the effective use of IPO proceeds and the confidence and performance of management, which in turn determines stock price. Additional performance measures, such as an increase in brand recognition, improved attractiveness for talent or the achievement of stated growth rates, will also inform the perceived value of an IP.

 

Five tips that can help unicorns prepare for an IPO long before the opening bell

So, how can unicorn companies improve the likelihood that their choice of pursing an IPO is as successful as possible, regardless of reason? Here are five tips.

1.  Start early and think strategically

Even though the median age of a unicorn at the time of its IPO is 8 to 10 years, many companies begin to think about their IPO strategy 3 years after founding. It’s never too early to think about transaction optionality at every point in the company’s evolution. In the early days, many companies are relying on friends and family, then an angel investor and then venture capital. However, once you reach the next level of funding, private equity, the company has reached a place where investors will want to see a return on their investment. The earlier a unicorn starts laying the foundation for the possibility of an acquisition or IPO, the better.

2.  Stay flexible

It’s important to stay flexible when it comes to transaction options and timing, especially in unpredictable and more volatile markets. Getting IPO-ready 12 to 24 months pre-IPO, while multi-tracking to prepare for all options, allows the company to choose the time and approach that will net the company maximum advantage.

3.  Invest in infrastructure, people and processes

It’s possibly one of the least sexy parts of building a business, but at a certain point, unicorns have to invest in infrastructure, people and processes to achieve IPO readiness and provide transaction optionality.

Founders often have alpha personalities, which propels them to operate at a speed at which few can keep up. Having the right people and processes in place will help the company, and the people who support it, maintain the pace the leader sets.

4.  Hire the right advisors

Having the right people inside is critical, but a strong unicorn company also needs a network of advisors to help the company stay on track. Bankers, auditors, IPO-readiness advisors, lawyers and PR consultants can offer much-needed advice at pivotal points in the lead up to and follow-through of an IPO.

5.  Consider enticing key investors for reference selling

Reputation and trust are everything, before, during and after an IPO. Welcoming a special type of investor can lend credibility to the unicorn, especially in the early years.

A unicorn company starts with the passion and dream of its founder. Through confidence, perseverance, determination and money, that dream grows from a home office, basement or garage, into a US$1b reality. Speed, timing, money, passion and a host of other drivers play a role in determining which funding route a unicorn company chooses. Regardless of the reason for pursuing an IPO, whether economic or personal, it’s never too early to prepare for the pivotal milestone founders dream of from day-one.

 

Over the long term, success can be measured based on two factors: whether it realizes the initial personal objectives of the founder, and whether it creates value for the company’s stakeholders.

 

The pros and cons of issuing an IPO

If we weigh the pros against the cons of issuing an IPO, there appears to be obvious merit in taking a unicorn public; however, doing so may have its pitfalls.

Pros
  • Serves as a catalyst with speed and scale for accelerated growth
  • Opens access to growth capital availability and a new external investor base
  • Offers a liquid market for exits of initial investors, as well as further wealth creation and diversification
  • Gives a boost to brand profile and allows the unicorn to open new markets and attract new customers
  • Helps to retain great talent
  • Provides stronger governance and transparency, allowing the company to improve its professionalism and credentialize itself as a bona fide market player
Cons
  • Invites greater scrutiny through increased transparency and capital market regulation
  • Creates susceptible to volatility in the markets, which can impact value
  • Increases the burden on scarce resources to meet compliance requirements and regulatory oversight
  • Places pressure on the company to deliver on promises in the public spotlight

 

Summary

Unicorn IPOs are on the rise as companies look to take advantage of a world currently flush with liquidity. Those who do make the strategic choice to go public have some best practices at their disposal to drive them toward success.

 

Martin Steinbach
EY EMEIA IPO Leader
Over 20 years of experience in the corporate finance field: IPO, M&A, private equity, venture capital and mezzanine finance. IPO thought leader.

EY Startup-Barometer Europe – October 2019

Financing of European startups at record level – Paris bypasses Berlin.

In the first half of the year, European startup companies received more money than ever before: the total value of startup financing rose by 62 percent year-on-year to 16. 9 billion euros. By contrast, the number of financing rounds rose by only 10 per cent to 2,301.