The VC Market in Austria
Venture Capital is a way to privately fund either a risky new business or a speculative business venture that has a very high potential for growth. It is typical for a venture capitalist like Efraim Landa to provide funding for the growth of a business in exchange for equity in the company. The VC firm is typically structured as a partnership and they are usually very selective when deciding what types of business ventures to invest in. In order for a venture capitalist to invest funds and time into a business the company will need to have innovative technology, the potential for growth, a very well developed business model and excellent management in place. Venture capital may be provided for an early startup business, expansion or development for a growing business or for restructuring and acquisitions.
History of the Venture Capital Market in Austria
The Austrian Private Equity and Venture Capital Organization is Austria’s national organization which was founded in 2001. At that time it covered over 80% of the VC market. In 2005 to 2006 Austria began to be a major player in biotech financing and it was able to fund a series of several large projects. They soon grew to have 30 VC companies they were able to fund increasingly more investment projects. During the most recent global financial crisis the VC market of Austria was impacted and there were significant declines in the amount of investments. But these were beginning to make a comeback. Formerly the banks were providing most of the venture capital investments but once the international crisis cleared this had shifted dramatically and the banks nearly disappeared. Investing shifted from banks to the private equity industry. The difficulty formerly lacked international competition since the legal framework made it very difficult for foreign VC firms to invest in the Austrian markets. Austria’s VC market remains very young, but it is also very professional. Realizing that there was difficulty with foreign markets, the Austrian government began to work on national frameworks which would help increase investments into their economy.
Future of the Austrian VC Market
It is believed that in the coming years there will be many more opportunities for the venture capitalist in Austria. The VC market is becoming much more attractive and there are several elements which provide exceptional conditions for those interested in investing. The government has a rich startup mentality, a very solid and stable infrastructure as well as an increasing openness toward investing. Presently there is a substantial increase of high tech firms that are pursuing venture capital funding instead of taking out business loans. This is offering a strong driving force for the VC market in Austria. Overall, there is a very positive atmosphere surrounding the private equity and venture capital market and nearly 60% of the Austrian companies use credit financing but more than 40% of these firms have an equity ratio of zero. Austria has been in the process of revising the framework of the Austrian market and risk capital. The region is experiencing strong growth and there are several different assets that may continue to be beneficial to the economy in the future. Their geographical location near Eastern Europe is certainly an asset and the Austrian market is a coveted market presently with no reason for this to change in the coming days. Technology centers have been an investment magnet and are expected to continue the growing trends. And wellness tourism is a rather new growth market in the region. Austria is poised to be a leader in the venture capitalist market in the coming years.
Posted on August 29, 2013, in Effi Enterprise, History of Venture Capital, VC Firm, Venture Capital, Venture Capital Markets and tagged Private Equity, VC Market, venture capital market. Bookmark the permalink. Leave a comment.