2. Financing and Capitalisation

Andreas Lewicki departed from AEG-Telefunken on good terms and had an initial consulting contract with the company which provided him with a source of income from the outset. This was sufficient to cover the rent for his cellar laboratory which, combined with the DM 20,000 royalties from his book, enabled him to begin operations. On the side, he developed a few devices such as a densitometer for photographers, in order to finance his hybrid-IC development projects. Lewicki was subsequently able to obtain additional, although moderate, assistance in the form of low interest loans from the ERP Programme.

However, he has tried over the years to obtain more substantial funding from the government but without success as their priorities have consistently been oriented towards large industry. Further, Andreas Lewicki notes that the preconditions in terms of collateral required for government assistance were frequently higher than those for financing through the private banks.

In constructing his new design and production facility, Lewicki received financing from the local ‘Raiffeisen’ Bank (a traditional banking institution in Germany which grew out of the farmers’ financing cooperatives and which today constitutes the primary source of finance for the agricultural sector). ERP funds represented another smaller contribution to the construction of the plant. Lewicki’s house-bank , the Deutsche Bank, was not prepared to provide anything other than overdraft facilities which were initially limited to DM 10,000 but have since been raised to DM 50,000. Even for these facilities, Andreas Lewicki was required to put up his mother’s house as security. Consequently, Lewicki’s company has been mostly self-financed with moderate support from the ERP Programme and the local banking cooperative.