If you ask the company foun­ders who come here to Berlin not only from other German cities, but often from abroad as well, you hear the follo­wing reasons in parti­cu­lar for choo­sing the loca­tion: Afforda­ble office and resi­den­tial space, oppor­tu­ni­ties for cont­act and exch­ange with a large number of simi­lar start-up compa­nies in the imme­diate vici­nity. There is also a dense network of finan­cing busi­ness angels, most of whom alre­ady have start-up and exit expe­ri­ence them­sel­ves. There are many quali­fied poten­tial employees who enjoy living and working in Berlin and, last but not least, it is the city’s quality of life, which has contin­ued to increase in recent years.

The above-mentio­ned factors are also partly self-rein­for­cing, so the attrac­ti­ve­ness conti­nues to increase with the influx of more entre­pre­neurs and companies.

The best-known examp­les certainly come from the Inter­net and e‑commerce. Successful start-ups in Berlin include Sound­cloud, wooga, game­du­ell and Zalando. But there are also success stories in other areas, such as clean­tech / rene­wa­ble ener­gies. In addi­tion, a number of Berlin VC-funded compa­nies have recently made a successful exit — for exam­ple Daily­Deal to Google, brands4friends to eBay, City­deal to Grou­pon, kaufDa to Axel Sprin­ger… In addi­tion to the afore­men­tio­ned office opening by Early­bird, VCs such as Euro­pean Foun­ders Fund, Vente­gis, Hasso Platt­ner Ventures and Econa have long been repre­sen­ted here, and foreign funds such as Deme­ter Part­ners from France have opened their German office here. In addi­tion, IBB Betei­li­gungs­ge­sell­schaft and the funds it mana­ges are very active co-inves­tors, espe­ci­ally in the tech­no­logy sector. Berlin is also home to a number of venture capi­ta­lists that vary the tradi­tio­nal VC model and are some­ti­mes refer­red to as “super angels” or “company buil­ders,” such as Rocket Inter­net, Team Europe Ventures, Project A and others. 

There is much to suggest that this trend is more sustainable than the first — brief — flowe­ring of Berlin’s startup scene at the turn of the millennium.

The ques­tion remains: What is diffe­rent this time? — Most nota­bly, the fact that most start­ups get by with much less seed funding and most busi­ness models cash-break even within a rela­tively short time — or are aban­do­ned before they’ve burned through much money. Start­ups have become more effi­ci­ent and argu­ably more professional.

But finan­cing has also chan­ged: Many foun­ders here in Berlin are now not doing it for the first time, and finan­cing is often provi­ded at the begin­ning by busi­ness angels who have them­sel­ves gone through start-up and exit expe­ri­ence and ther­e­fore bring a lot of their own know-how with them. The Super Angels and Company Buil­ders mentio­ned above indus­tria­lize this process. Estab­lished VC funds are in the process of repo­si­tio­ning them­sel­ves in this land­scape and in some respects also adap­ting their busi­ness model. This also increa­ses the diver­sity of finan­cing forms and struc­tures. This is also an inter­na­tio­nal trend.