Germany has set beside another EUR 360 million for public seed financing of Germany based start-ups until 2010.

It always strikes me why taxpayers ate the main seed investors in Germany. GEM is noting public investment as top ranked in Germany. No other country in the world is pouring so much public money in startups. But while the government is certainly a welcome risk diversifier the public only investment binge is unhealthy.

German public financed banks like KfW and TBG invest like hell in seeds that will never get a second round due to the lack of interest from Angels or VCs. Seed Financing (incl. Series A and B) has become nearly unheard for the last 3 years in Germany. So if you ask me something is wrong over there - why do taxpayers throw money at companies that apparently nobody else wants to invest in?

Let me know what you think (Comments work now much slicker).