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Byline: Joshua Jaffe
In a sign of a maturing European venture market, Munich-based venture capital firm Target Partners GmbH has raised money from 25 individual investors in the German and American IT industry for a separate fund that will co-invest in all of the firm's future deals.
Referred to in the U.S. as a sidecar fund, the establishment of Target's fund marks a first for the German venture capital market. Each time the firm's DM200 million ($86.4 million) maiden fund invests in a startup, the newly created fund will take a slice in the target, representing less than 10% of the firm's overall stake.
The new fund, referred to as the Executive Fund, holds less than [Euro]25 million ($21.1 million) in capital.
Kurt Muller, a partner at Target Partners, said, "We're trying to create a closer bonding with our network for the benefit of our portfolio companies."
By investing the 25 individual investors' money into their companies, the firm hopes to increase the likelihood of the new fund's investors helping the companies.
"We have a network of people we can pick up the phone and call," Muller said. "But we have a closer relationship and a more intense discussion with the people who have actually invested money in our fund."