3 questions to smart minds
Photo: M. Inhester | P+P Pöllath + Partners

New boom times for innovative e‑commerce companies

For this 3 questions to M. Inhester

P+P Pöllath + Partners
Photo: M. Inhes­ter | P+P Pöllath + Partners
20. March 2012

Young and adult users are incre­asingly using the Inter­net and social media on the move. Consu­mers are incre­asingly sear­ching for infor­ma­tion on the web via their smart­phones, using the mobile versi­ons of the rele­vant search engi­nes. — This crea­tes room for modi­fied busi­ness models on the Inter­net and in the social media areas. Venture capi­tal inves­tors have reco­gni­zed the trend and got in early. On which sectors is the focus and where is the trend going?

For this 3 ques­ti­ons to Part­ner at P+P Pöllath + Part­ners in Munich

1. Inter­net start­ups like are suddenly getting big funding rounds again. Why is that?

The PE indus­try prefers to support and finance “disrup­tive busi­ness models” which, through inno­va­tive tech­ni­ques and ideas, could be suita­ble to replace conven­tio­nal busi­ness models. MyTaxi is a good exam­ple of this: a tech­ni­cally simple model that uses commer­ci­ally available smart­phones to break up a cartel of cab compa­nies that has been in place for deca­des, to the bene­fit of custo­mers and cab drivers. An imme­dia­tely reco­gnizable win-win situa­tion for custo­mers and service provi­ders! — The fact that Daim­ler and Tele­kom got invol­ved early on as corpo­rate venture capi­ta­lists is impres­sive proof that the synap­ses between the “old” and “new” econo­mies are now perfectly formed.

2. Are there areas of the Inter­net that are favored by inves­tors? Why?

In prin­ci­ple, it can be assu­med that the capi­tal requi­re­ments for (bio)technology compa­nies are signi­fi­cantly higher than, for exam­ple, in the e‑commerce sector. Moreo­ver, the deve­lo­p­ment poten­tial of such compa­nies is largely depen­dent on their patent port­fo­lio and is often linked to long holding peri­ods. E‑commerce plat­forms, on the other hand, often have an easier time of it: the last few months in parti­cu­lar have shown that new areas of (conven­tio­nal) goods and services traf­fic can still be brought into a digi­tal infra­struc­ture with high sales figu­res. The service sector, such as MyTaxi, is covered just as much as the clas­sic goods trade. For exam­ple, ‘Zalando’ has estab­lished itself very successfully in the shoes/fashion sector, ‘52Weine’ in the wine trade, ‘Brands4Friends’ in clot­hing, and others as well. This success attracts inves­tors and crea­tes incen­ti­ves to expand the respec­tive entre­pre­neu­rial acti­vi­ties to ever new areas.

3. What in parti­cu­lar should startup entre­pre­neurs keep in mind during finan­cing negotiations?

You should really “take your time” when nego­tia­ting finan­cing and think things through. Subse­quent correc­tions are usually pain­ful, expen­sive and lengthy.

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