The main advantage is: mittelstands are going for a zone that VC's actively avoid, that has tremendous underutilized potential. Logically, which is easier: try

The main advantage is: mittelstands are going for a zone that VC's actively avoid, that has tremendous underutilized potential. Logically, which is easier: trying to earn 10 million a year in revenue, or 1 million? We can simplify that even more: which is easier, trying to earn 1 million or $100,000? Trying to earn $100,000 or $10,000 a year? At every level, for every step down, the answer is: much, much easier. Given two numbers for revenue, the smaller one is easier to achieve, every time. As a rough approximation, for each comparison given above, one value is about 10x easier to achieve than the other. The problem is that VC's exclude, and filter out, the easiest class of money to make, that in the $1-$10 million range. But there's always been a follow up question here which I've thought a lot about: which is easier - going from $0 to $100 million in revenue, or going from $1 million to $100 million? The easy rebuttal to "the $1 million business may not be able to go to $100 million" is "then they can pivot and still be far ahead of the person or team starting from $0." They already know how to run a business, how to do idea validation, how to be ramen profitable - they've done all that. It's going to be easier. They've done it before. Yet right now no one targets them as the safest bet, as in fact where the smart money should go. So a mittelstand, by one treating these smaller amounts of worthy of pursuit (amounts which are also easier to achieve), and two leaving the door open to going beyond those amounts when the time comes, might even be able to outcompete many VC's, over time.