So far, the business model has proved to be difficult but the venture capital company, German Startups Group, which is listed on the stock exchange, wants to change direction.
GCG is planning to expand its business model. The company, recently launched by Christoph Gerlinger, announced that it wants to establish a secondary market platform for non-listed shares in start-ups. In addition, GSG wants to issue profit-sharing rights on a portfolio of individual companies through which investors can participate in the development of start-ups.
Gerlinger wants to change his business model primarily because the change in the value of the non-listed shares does not reflect the growth of the underlying companies, a situation with the start-up scene about which the financier is critical. So far, the shares of stock-listed investors like the GSG, Rocket Internet or Auden are anything but success stories. As it happens, GSG wanted to establish its own stock price as a kind of barometer for the development of the German start-up scene, an endeavour which has thus far been unsuccessful.
With the proposed platform for trading existing shares in start-ups, GSG will go beyond its own portfolio. However, Gerlinger is proposing a matchmaking role rather than a finance and advisory role. Interested parties would be brought together on both sides – existing investors and interested investors. Nonetheless, this would require a Bafin license for investment brokerage. The platform is based on the US model of sharepost, in which shares of young companies are offered in order to provide a way for early investors to exit the company. In this phase there is often a greater demand for secondary transactions.