Who's afraid of paper tigers?

Even venture capitalists find the new regulation sorely lacking, as it sets narrow guidelines and is unlikely to encourage more venture activity. The act's rather restrictive framework demands that target companies must be incorporated enterprises, based in the EU or the EEA, and may not exceed a maximum equity capital of EUR20m.

More importantly, MoRaKG fails to fulfil the original promises and declared intentions to provide a legal framework regulating private equity investments, as outlined in the current Government's coalition contract. This situation does not encourage investments in Germany and, in fact, sends a mixed message to international investors. On the one hand, Germany's industry beckons with promise and the Government recognises the need to attract capital and investments, on the other, it shies away from providing the actual framework to support this.

Taking these factors into account, the industry's accomplishments in Germany are all the more impressive. Cleantech investments are in vogue, with Germany internationally recognised as one of the places to be for solar and greentech investments. This was highlighted by Blackstone's EUR1bn investment in an offshore wind farm announced this month and substantial funding rounds being closed for DACH-based venture, which further drives the region's leadership.

With MoRaKG looking like a rather anaemic paper tiger, the industry continues to adapt and make the best of the situation, constantly reinventing itself. Yet, as the global economic climate cools and confidence even in Germany seems to suffer, the question is how long the Government can ignore the problem.

Yours sincerely,

Mareen Goebel

Editor, Deutsche unquote"

Tel: +44 20 7004 7462

mareen.goebel@incisivemedia.com.

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