ABSTRACT
In this chapter, the author discusses the perspectives–institutional and territorial difference, inter-territorial interdependence and specialization as well as state agency–and explores his own dynamic relational approach to account for developments. He examines the relational embeddedness and relational strategies of venture capital (VC) firms as they lived through two major financial crises. On the one hand, VC in the narrow sense has largely lost its ability to finance substantial biotechnology innovations in Germany, while at the same time becoming more entrenched in the national territory of Germany. On the other hand, new forms of VC have emerged since the mid-2000s and are the cornerstones of biotechnology financing in Germany. The business models of German biotechnology companies and the way in which they went about innovating was considered by observers to reflect adaptive behaviour to the institutional environment. The financial crisis of 2000 and 2001 temporarily called into question the entire notion of venture-funded high-tech entrepreneurialism in Germany.
