Navigating Turbulent Times: Practical Advice for Startups

Despite initial signs of recovery, times are still challenging for startups.

We spoke with experts from HTGF about two major current challenges: How can startups best access capital? And how can they operate internationally in uncertain environments?

“Startups need to understand what the other side really needs” – Dr. Markus Kückelhaus, partner in the Industrial Tech division, on opportunities, financing, and partnerships.

What current opportunities and challenges do you see for startups in 2025?

Dr. Markus Kückelhaus: We are fundamentally optimistic about 2025. On the one hand, the number of startups is rising again, as the latest numbers from the startupdetector report show. On the other hand, German VCs have a lot of dry powder: nine billion euros that still needs to be invested. At the same time, there is a backlog in the late-stage sector, which could open up a new IPO window.

The macroeconomic environment remains challenging: the ongoing customs dispute, inflation concerns, and potentially rising interest rates – even if they are still low at present.

Which aspects are particularly relevant for financing startups at the moment?

Dr. Markus Kückelhaus: Startups should understand the dynamics of the individual financing phases very clearly. Looking at the number of deals or valuations, the level appears stable, and in some cases even growing. Nevertheless, follow-up financing in the late stages remains challenging. Agility is more crucial than ever here. Especially if you are not operating in a very promising field such as AI, approaching investors is very time-consuming – it requires a lot of discussions.

Deep tech startups in particular – or companies in general that have not yet generated any revenue over a period of years – need to think early on about what other financing options they can use. Apart from traditional venture capital, public funding or other non-dilutive financing options are essential in order to have sufficient capital available in the long term and to be able to realize the long development cycles.

What is important when startups want to cooperate with companies?

Dr. Markus Kückelhaus: Cooperation with companies is always relevant from a market perspective. It’s not just about getting funding, but above all about asserting yourself in the market. We therefore advise startups to focus on finding the right product-market fit at an early stage. Purely strategic and financial partnerships have become less common. Some corporate VCs have even ceased their activities altogether—the current environment makes it more difficult for startups to rely on such constellations.

Startups should always make a clear distinction: What does the other side actually need? Is it about technologies that need to be ready for use in the short term—which tends to favor classic customer-supplier relationships? Or is the company looking for a long-term development partnership, as is the case with many pharmaceutical companies? Recognizing these differences allows you to tailor your offering more precisely and cooperate more effectively.

“Startups need to think more geopolitically resiliently – without closing themselves off” – Dr. Tanja Emmerling, Partner for Digital Tech, on international strategy in times of crisis.

Which startups are currently particularly affected?

Dr. Tanja Emmerling: Geopolitical uncertainties such as the customs dispute with the US and global supply chain risks are no longer just affecting traditional exporters. Startups in the deep tech, green tech, and AI sectors are also feeling increasing pressure, whether from regulatory hurdles, strategic dependencies, or more volatile financing conditions. What’s more, anyone who relies on international B2B customers or complex value chains will quickly be caught up in indirect effects. In this situation, startups need to keep a close eye on their cash flow. Liquidity gives them the flexibility to respond to change – and in times of crisis, that’s more important than growth at any price.

What advice would you give founders if access to the US market becomes more difficult?

Dr. Tanja Emmerling: The US market remains attractive, but you should prepare yourself for a new reality: higher regulatory requirements, political volatility, and potential investment hurdles. Startups should build up local expertise early on – ideally through partners, advisors, or their own structures on the ground. Today, a smart internationalization strategy means thinking about geopolitical resilience: Which alternative markets can I develop without putting all my eggs in one basket? Which alliances or strategic partnerships will help me remain flexible? And how can I structure my value creation so that I remain capable of acting even in times of tension?

What strategies will help Europe?

Dr Tanja Emmerling: Think EU – not just US: Now more than ever, it is worth looking inward. The EU is more than just regulation – it offers a growing innovation ecosystem, reliable funding instruments such as the European Innovation Council and IPCEI, and opportunities for sustainable positioning. Those who consider European supply chains and sales markets at an early stage will strengthen their strategic resilience. What’s more, Europe needs its own solutions. Products that respond to regional diversity in terms of language, data protection, and user needs create real added value. In times of crisis, focus, rapid response, agility, and close customer relationships are what count. Those who take these principles seriously can develop Europe into a genuine home market – not just as a place of retreat, but as a starting point for new strength.