Democratisation of Venture Capital

Interview Snapshot

Rohit Yadav: Welcome Michael! What is MIG Capital?
Michael Motschmann: MIG is a Munich-based venture capital firm investing in deep tech, particularly life sciences like biotech, diagnostics, medtech, digital health, and also tech areas tied to energy savings and semiconductors. We’re focused on investments that contribute to a better world and industrial efficiency. Our main geographic focus is the German-speaking region—Germany, Austria, Switzerland—but we also invest in broader Europe.

“We started MIG in 2004, more by accident than by plan…. At that time, venture capital in Germany was in a very tough situation after the Neue Markt collapse…. Our first fund was €30 million, raised from private individuals, not institutions.”

Rohit Yadav: MIG is on Fund 18, correct? Tell us about the journey.
Michael Motschmann: Yes, Fund 18. MIG started in 2004, somewhat by accident. I was a serial entrepreneur, and my accountant invited me to sit on board of a venture capital firm. At that time, VC scene in Germany was devastated post the 2000-2001 Neue Markt crash. But with some capable partners, we raised capital from private investors and launched MIG. Our first fund was in 2005, a modest €30 million. Now, we’re closing Fund 17 at €110 million and actively raising Fund 18.

Rohit Yadav: Unlike many VCs, your LP base is retail investors. How does that work?
Michael Motschmann: That’s our distinguishing feature. Our capital comes from private individuals investing between €10K to €1 million. We have a separate fundraising firm solely dedicated to placing our funds. We fundraise continuously while investing, making this a cycle business. It's quite different from the typical VC model with a few large institutional LPs.

“Unlike most VCs, we raise money from retail investors – people who invest €10,000 to €1 million…. We have a separate fundraising company continuously placing our funds while we invest.”

Rohit Yadav: How has your portfolio evolved over the years?
Michael Motschmann: Naturally, VC is full of ups and downs. We've had failures—biotech companies where drugs didn’t work—but also great successes. Our most known success is BioNTech, the leader in COVID-19 vaccines, founded with us in 2008. It was originally an oncology company. Before that, we backed Ganymed, another biotech startup, which was sold to Astellas for up to €1.3 billion. The drug developed is now changing stomach cancer treatment. That’s impact, not just financial but also for humanity.

Rohit Yadav: That’s an incredible story. Can you elaborate on MIG’s impact-driven investing philosophy?
Michael Motschmann: Our goal is impact through technology. Take BioNTech: billions vaccinated, a massive global health impact. But also in semiconductors, we helped build a company from scratch with Harvard postdocs that cut wafer production costs by over 50%. We sold it to Infineon, and now it's enhancing European chip manufacturing. This is the role of VC: start from zero and build transformative companies.

“Germany historically relied on banks for business funding, not venture capital…. VC is still relatively young in Germany compared to the U.S…. In the U.S., it’s natural to take early-stage risk – here, not so much.”

Rohit Yadav: That brings us to venture capital as a risky asset class. How do you see Germany’s culture towards risk?
Michael Motschmann: Germany historically leaned on banks for funding. VC didn’t take root here like in the U.S., where VC has been around for nearly a century under various names. In the U.S., it's normal to take risk on early ideas. Here, it was family and friends, or a bank loan. That began shifting in the 80s, post-Basel regulations. Banks became stricter. VC emerged as a substitute, but it still lacks deep roots.

Rohit Yadav: What’s your five-to-ten year vision for MIG?
Michael Motschmann: Stay successful, and grow the role of VC in Germany. We want more people investing in VC. Germany needs it to stay competitive. Our universities and scientific institutions are world-class. If we fund the ideas coming out of them, we can build the future. We aim to be a key player in mobilizing private capital into deep tech startups.

Rohit Yadav: Let’s dive into democratization of VC. You pioneered bringing retail LPs into this world. Why?
Michael Motschmann: At the time, institutional investors avoided German VC due to poor past experiences. We saw potential in giving everyday investors access to VC with smaller tickets. Typical VC funds have million-euro minimums. We offered a chance to participate with €10,000. It’s an investment option, a portfolio diversifier, and a way to back national innovation. Plus, people couldn’t access startups directly; we offered a managed, professional vehicle.

Rohit Yadav: How have institutional LPs evolved in Germany over time?
Michael Motschmann: They follow returns. If VC isn’t hot, they pivot to PE or Infrastructure. German institutions often prefer US VC funds because of long track records. There's also risk aversion. The ecosystem lacks depth here. That’s why we turn to retail. We educate and onboard investors who are curious, patriotic, or simply diversifying.

“Democratization of VC is crucial – people should be able to participate with €10,000….Traditional VCs often require €1 million minimums – we broke that barrier…Retail investors can diversify, support innovation, and learn through our funds…Institutional LPs follow trends – if VC is cold, they shift to Private Equity or Infrastructure.”

Rohit Yadav: Among family offices, insurance firms, and pension funds, who’s most engaged with VC?
Michael Motschmann: Family offices led by entrepreneurs are most responsive. They understand risk. The next generation, less so. Insurance firms and pension funds are constrained by regulation. Even a 1-2% allocation from them could change the game due to sheer volume. But right now, rules are tight.

Rohit Yadav: What are the strategic expectations from the German VC ecosystem in the next few years?
Michael Motschmann: It’s tough to predict due to geopolitics—the Ukraine war, U.S. policies, global instability. But it’s clear Europe must become more independent. That means funding our own companies, building our own digital and defense infrastructure. We can’t depend on others for tech or capital. It’s about sovereignty. Venture capital is key to that.

Rohit Yadav: So VC isn’t just about returns, but strategic autonomy?
Michael Motschmann: Absolutely. If we want strong European firms in AI, defense, biotech, we need to fund them ourselves. We can’t rely on Nasdaq or the U.S. capital markets. We need a European capital market structure, stronger IPO pathways, and collaborative growth.

Rohit Yadav: What do you expect in terms of VC returns and exit environment in the near future?
Michael Motschmann: The macro economy is rough, but this is the time to invest. You get reasonable valuations and high-quality teams. VC is long-term—exits happen in 7-10 years. If you buy well now, returns will follow. Stock markets are starting to bounce back, and interest in deep tech and health remains high.

“Europe must become more economically and technologically independent…. We can't rely on the U.S. or China for all our technology needs…. VC has a role to play in building a sovereign European tech ecosystem.”

Rohit Yadav: Finally, is venture a trend-following business? And what role does AI play?
Michael Motschmann: Venture isn’t just trend-following. Trends matter, but it's about long-term vision. AI won’t replace VC. It’s a tool, not a substitute. We use AI in drug discovery, as at BioNTech with InstaDeep. It accelerates science but doesn’t replace the human judgment, the fantasy, and the genius—needed to create game-changing companies.

Rohit Yadav: Michael, thank you. From MIG’s founding story to your mission of democratizing VC, to your insights on Europe’s future—this has been a masterclass in venture capital.
Michael Motschmann: Thank you, Rohit. I believe deeply in VC’s power to shape a better society. It was a pleasure sharing this with you.