Community development venture capital: Concept and status quo in Germany

As most other countries, Germany also faces dramatic regional differences in terms of socio-economic development. Important drivers of such development are entrepreneurial activity and the creation of new companies. We argue that venture capital (VC) and especially community development venture capital (CDVC) can be a powerful instrument to stimulate entrepreneurship and to support the growth of ambitious companies. Hence, the present paper deals with the general questions of whether there are regional gaps in the supply of VC in Germany, whether these regional gaps do geographically correspond to the most deprived areas in Germany and which kind of VC companies are currently in place in order to close potential regional gaps. We find that the primary potential target area for CDVC activities in the country is the state of Brandenburg. Our assessment of the German VC market reveals that real CDVC engagement in the country is yet to come.