On one side there are the long-established family businesses in suits and ties, on the other the young start-ups in T-shirts and sneakers. They embody two completely different worlds, but they are vital to each other. The intersection: old money against new thinking.

Especially in Germany, young start-ups with innovative ideas often lack the money to realize their dreams. While in the USA, for example, around 0.35 percent of the gross domestic product flows into venture capital, the figure in Germany is just 0.03 percent. If more family businesses invested in venture capital, they would solve the financing problem of imaginative start-ups. And they would benefit themselves: From the know-how of young companies for their own digitalisation, which they would otherwise probably oversleep. It’s a win-win situation.

Events such as Hackathons or the Founders Hack help to bring companies and start-ups together. One example: In July last year, twelve teams spent 48 hours at the Founders Hack developing solutions for six industrial problems of large companies. The greenCYCLE team won with its innovative idea to introduce a platform for the rental and sale of older large household appliances. The team not only received 5,000 euros in prize money, but also mentoring sessions at the Founders Foundation. On the other hand, Miele benefits from the young start-up’s solution to its problem.

German small and medium-sized businesses have to follow suit

In a joint study with the Federation of German Industries (BDI), Deutsche Bank found that almost half of the largest family businesses in Germany already cooperate with start-ups. Their goal is to develop new technologies and master their own digital transformation.

Only if family businesses and start-ups work together can German SMEs overcome the hurdles of digitalisation and be sustainably strengthened.

Photo: Tiko