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Venture Capital in Berlin

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Venture Capital (VC) is the key to success for any start-up looking to turn an innovative idea into reality. VC firms provide capital, resources, strategic assistance, networks and much more to start-ups at the critical early stages. In the past, Berlin and Germany as a nation has lagged behind its EU and global counterparts partly as a result of the nation’s culture of avoiding risk. Business in Germany tends to move slowly and in a prudent fashion which doesn’t bode well for start-ups. In 2013, VC investments into Berlin start-ups totaled just €133 million.

 

A snapshot of VC funding in 2018 paints a very different picture. VC funding has skyrocketed in the last few years with future projections conveying a similar trajectory. In 2018, a total of €4.6 billion was invested in German start-ups, a 7% increase on 2017. Berlin took a significant share of this VC funding with an incredible €2.67 billion flowing to start-ups in the capital, a 2000% increase on 2013. This figure accounts for 59% of all VC capital invested in Germany and is an increase of 6% from 2017. Berlin start-ups account for 4 out the top 5 largest financing amounts for start-ups in the nation.

 

Where Was the Venture Capital Invested in Berlin?

E-Commerce start-ups have always attracted the highest level of VC investments in Berlin and 2018 followed this trend. A total of €1.64 billion was invested in German E-Commerce start-ups with Berlin start-ups collecting a healthy 67% of this figure. E-Commerce platform Auto1 Group headquartered in Berlin topped the list receiving an influx of €460 million in 2018. An interesting emerging trend is the rise of VC funding for Software and Analytic start-ups. These innovative start-ups that comprise of innovative tech such as SaaS, blockchain, virtual reality, cloud, cyber security and data analytics raised a nationwide total of €670 million with €341 million funneling into Berlin. This 56% increase from 2017 portrays the increasing trust and interest in new, innovative tech start-ups. SaaS accounted for €304 million, almost half of the VC funding. FinTech start-ups also experienced healthy growth with €456 million flowing to FinTech start-ups in Berlin.

What Caused this Significant Increase in Venture Capital Funding?

German VC firms operate on a prudent basis which is in line with German business culture. In the last few years, many large international VC firms such as Atomico, Balderton Capital, Partech and Mangrove have begun to heavily invest in German start-ups with Berlin attracting most of the attention and funding. This flow of international VC funding has broken the cultural barrier of risk-adverse German VC firms. Furthermore, German VC firms have seen this influx of competition and the rewards experienced by international VC firms causing them to question their prudent methods.

 

The future is bright for start-ups in Berlin as forecasts predict the influx of VC capital to continue to rise year on year. 

Posted by Adam Dunne on 11 March 2019

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Tax System in Germany

Tax System in Germany

Tax System in Germany Understanding the tax system is vital when moving to a new country. Below is an account of Germany’s income tax system accurate as of 2019. This account was taken straight from our “Berlin Relocation Guide” which can be downloaded here: https://www.sigmarrecruitment.eu/relocating-to-germany/berlin If you are a resident of Germany, you have full income tax liability. All income earned in Germany and abroad is subject to German income tax and a solidarity surcharge. Germany’s income tax system is progressive, meaning that the rate of tax increases as income increases ranging from 0–45%. For married couples, rates are more favorable when tax is filed jointly. The tax year runs from January 1st to December 31st. If you do have to file your own taxes, the cutoff date is May 31st for the preceding year. The rates for 2019 are; 0 – 9,169 0% 9,169 - 14,255 14-24% 14-256 - 55,960 24-42% 55,691 – 265,236 42% 265,327+ 45% Solidarity Surcharge The solidarity surcharge (Solidaritaetszuschlag) is an additional fee on income tax, capital gains tax and corporate tax in Germany. This means that the solidarity surcharge is to be paid by every natural and legal person that owes one of the above-mentioned taxes in Germany. This surcharge is levied at 5.5% of the income tax for higher incomes. Withholding/Pay as you Earn Tax Income from employed work and capital income are taxed at the source, meaning you as a tax payer will not need to file your own taxes come year end. The tax owed will be deducted and retained at the source by the employer or by the bank before the earnings are payed out. If the employer is a German company or a foreign enterprise with a permanent establishment or a representative in Germany, the employer is legally obliged to withhold taxes from an employee’s salary and to remit the taxes to the tax office monthly. Paying Income Tax When you are taxed at the source, your tax will be based on your personal status. You will fall into a certain class that will directly affect how much tax you pay. Below are the six types of tax classes: Class 1: Single Class 2: Single parent (living alone with the child/children) Class 3: Married and spouse (when spouse does not have an income) Class 4: Married and similar income to spouse Class 5: Opposite of class 3, i.e this is the class the second earner chooses if the spouse opts for class 3 Class 6: For a second job or for deduction without proper employee information The taxation at source for capital income will be done with a flat tax rate of 25% (add solidarity surcharge of 5.5% of the amount of tax).
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Venture Capital in Berlin

Venture Capital in Berlin

Venture Capital (VC) is the key to success for any start-up looking to turn an innovative idea into reality. VC firms provide capital, resources, strategic assistance, networks and much more to start-ups at the critical early stages. In the past, Berlin and Germany as a nation has lagged behind its EU and global counterparts partly as a result of the nation’s culture of avoiding risk. Business in Germany tends to move slowly and in a prudent fashion which doesn’t bode well for start-ups. In 2013, VC investments into Berlin start-ups totaled just €133 million. A snapshot of VC funding in 2018 paints a very different picture. VC funding has skyrocketed in the last few years with future projections conveying a similar trajectory. In 2018, a total of €4.6 billion was invested in German start-ups, a 7% increase on 2017. Berlin took a significant share of this VC funding with an incredible €2.67 billion flowing to start-ups in the capital, a 2000% increase on 2013. This figure accounts for 59% of all VC capital invested in Germany and is an increase of 6% from 2017. Berlin start-ups account for 4 out the top 5 largest financing amounts for start-ups in the nation. Where Was the Venture Capital Invested in Berlin? E-Commerce start-ups have always attracted the highest level of VC investments in Berlin and 2018 followed this trend. A total of €1.64 billion was invested in German E-Commerce start-ups with Berlin start-ups collecting a healthy 67% of this figure. E-Commerce platform Auto1 Group headquartered in Berlin topped the list receiving an influx of €460 million in 2018. An interesting emerging trend is the rise of VC funding for Software and Analytic start-ups. These innovative start-ups that comprise of innovative tech such as SaaS, blockchain, virtual reality, cloud, cyber security and data analytics raised a nationwide total of €670 million with €341 million funneling into Berlin. This 56% increase from 2017 portrays the increasing trust and interest in new, innovative tech start-ups. SaaS accounted for €304 million, almost half of the VC funding. FinTech start-ups also experienced healthy growth with €456 million flowing to FinTech start-ups in Berlin. What Caused this Significant Increase in Venture Capital Funding? German VC firms operate on a prudent basis which is in line with German business culture. In the last few years, many large international VC firms such as Atomico, Balderton Capital, Partech and Mangrove have begun to heavily invest in German start-ups with Berlin attracting most of the attention and funding. This flow of international VC funding has broken the cultural barrier of risk-adverse German VC firms. Furthermore, German VC firms have seen this influx of competition and the rewards experienced by international VC firms causing them to question their prudent methods. The future is bright for start-ups in Berlin as forecasts predict the influx of VC capital to continue to rise year on year.
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How To Ask For A Promotion

How To Ask For A Promotion

Are you in a job in which you feel you’re doing well, have mastered your role and feel like you’re ready to take on more responsibility? If so, it may be time to ask for a promotion. There are a few ways you can approach this; Reflect Think about what it is you want. Are you looking for more responsibility? More money? To manage more people? Knowing what you want from your promotion is the first thing you need to assess before approaching your boss with the request. You need to have a clear idea of what it is you want before you can ask for it. Going in with just the idea of wanting a promotion without giving it any thought, is a sign that your request will more than likely be rejected. Be Prepared Know in your head all of the projects you’ve worked on. Know any statistics, facts and figures that will support your request for a promotion. Prepare a list of your accomplishments and be ready to talk through each of them with your manager. This is the best way to approach your manger about wanting a promotion and then follow up afterwards with an email. The email should state clearly why you want a promotion and the reasons why you feel you deserve one. It will also give your manager something to look over while he/she is deliberating. Get the Timing Right Timing is everything. Being 6 months in a job and asking for a promotion is never going to be a good idea or 6 months after being given a previous promotion. You need to have worked up enough time and be succeeding in your current role before you can consider a promotion. You need to ask yourself, is now a good time for more responsibility? If you feel you are managing your workload well and are ready and capable of more responsibility, then you can be confident when asking for a promotion. Ask for Feedback In the run up to asking for your promotion, check in with your manager that they are happy with what you are getting done and ask if there is anything else they would like you to work on. If you are consistently getting positive feedback from your manager, it's an indication that there may be opportunity for a promotion. Follow up If you have already asked for a promotion and you haven’t been given an answer weeks later, you will need to follow up. Request a meeting with your manger specifying that you are seeking an answer about the promotion. Be Patient Don’t assume a discussion about a promotion is a once off. It is often a series of conversations over a period of time. Your manager may not even come back to you for a week or two with their answer and he/she may follow up with questions. If unfortunately, you aren’t successful in receiving a promotion immediately, ask what you need to achieve/work on in order to receive a promotion. Armed with this information, you can work on achieving these targets to ensure you receive one in the near future.
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Munich's Tech Scene

Munich's Tech Scene

Munich’s Tech Scene Munich is a very wealthy city boasting the highest purchasing power of any German city. It is home to many of the nation’s largest companies such as Allianz, BMW, Siemens and Munich Re. The region is often overlooked as a start-up hub as only 11% of the nation’s start-ups are located here compared to Berlin’s impressive 30% share. However, Munich’s tech scene has a bright future as the city shifts from an engineering and industrial powerhouse to a software engineering powerhouse. Berlin is trendier and more glamorous than Munich, but Munich is the place to get business done. The interplay between established corporate organisations and innovative start-ups has created a dynamic environment across industries. Munich’s tech and start-up scene is supported by the multitude of wealthy organisations, start-up incubators, accelerators, entrepreneurship programs, as well as the top universities and local coding schools. The city boasts an open innovation culture that networks start-ups with universities and established companies benefitting all stakeholders involved. Tech and the Automobile Industry One in every four German cars is produced in Munich with revenue’s in the automobile industry totalling €110 billion. However, in recent times the city has embarked on a journey to move leverage this highly profitable and well-established industry to diversify into the IT sector. New technologies such as self-driving cars and new start-ups such as car sharing apps are attracting the attention and investment from large multinationals such as BMW and Dailmer. BMW operate and fund their ‘start-up garage’ with Dailmer operating ‘Dailmer Mobility’. The Internet of Things Munich is a haven for the IoT industry. The multitude of high-tech and financial industries coupled with knowledge-intensive services has led to a huge demand for IoT products and services. Huge multinational companies such as IBM have heavily invested in IoT in Munich. In 2015, IBM opened its Watson IoT Global headquarters in the city hiring a team of 1,000 developers, researchers and designers. Media and Finance Munich is home to a large diverse media industry that employs approximately 30,000 people across 8,000+ companies. As a result, there are numerous MarTech and AdTech start-ups successfully receiving funding and investment. Munich is home to several global insurance companies such as Allianz and Munich Re and numerous financial institutions. These organisations have given rise to many FinTech start-ups such as Finanzchef24, Boku, Paymill and many more. The vast majority of these start-ups use PHP, Java and Ruby. Incubators Due to the city’s corporate wealth and plan to establish itself as a software engineering powerhouse, there are numerous incubators offering generous incentives and funding to start-ups. Play, TechFounders and Venture Starts are private incubators in the city. The Bavarian government also has a number of initiatives in place to support local talent such as BayStartUP and GrunderRegio M. Popular Languages According to StackOverflow statistics, Munich is home to approximately 100,000 developers. The most popular back-end languages in Munich are PHP (38%), Java (30%) and Python (14%). On the front end of things, Angular is the most popular framework with 55% of companies using it. React comes in second at 27% with Ember and Backbone coming in around the 9% mark.