>The problem is that there is no proof that the Mittelstand model can work for tech startups, while there is proof that the SV model can.

To me it seems pretty obviously that one is the antithesis of the other. Mittelstand seem to work well in established markets with a sensible good quality product or in niche markets where they could often be the only manufacturers worldwide. It does not strike me as the kind of enterprise that aims to grow fast and disrupt markets.

Besides, there is already Middelstand tech businesses. They are the software houses that write niche B2B software like time table schedulers for schools and such.

Disrupting market is not easy, but it significantly easier, if the first priority of the company is not being self sustainable and instead rely on on venture capital. Twitter is an interesting example in that context. A company that surfaced a unique user behavior and created utterly new communication patterns. Yet, because it didn't focus building a business, it ended having to rely on archaic business models to finance itself while in the process disregarding the people who helped make it grow.

Well, it all depends on how you define "tech startup" and "mittelstand". My impression is that neither of the two have a clear-cut definition.

It really depends on the structure of the business and market you're trying to crack. Also, remember VC is the most expensive and controlling capital you will ever raise, and you should try to avoid it unless there is a compelling reason to use it (like network effects, fast growth and no profits for 10 years). Instead, the best money you can raise is from customers, which has the added benefit of not needing to be repaid, and providing perfect kinds of feedback data for your product. This was advice from Nolan Bushnell, and worth considering.

My space is in social media analytics services. There is a lot of VC money here, it will be difficult to expand competing with that. But, thank you for the encouragement!