Screening Practices of German Company Builders

Innovative new companies are important for economic development. They create jobs, develop the society with new technologies and guarantee economic growth in a world of increased global competition. Unfortunately, the failure rate of new companies is significantly higher than the rate of successful establishment. In recent years, the German start-up environment has experienced the emergence of a new type of corporation: company builders. By providing services, resources and expertise they increase the chance of success for new ventures. Their screening practices hereby influence which kind of new ventures are sponsored, and thus, determine the companies shaping the economy. German company builders have been said to lack in innovation. The proposed research investigates the screening practices of German internet company builders by evaluating critical success factors in terms of their innovativeness. Those factors, emphasizing the importance of innovation, were found to be less significant for the venture decision than other factors. Hence, German internet company builders underrate the aspect of innovation and thus, the benefits of it are not achieved.