International -- Cover Story: Europe: ENTREPRENEURS
`I HAVE A PERSONAL MISSION HERE' (int'l edition)
When Matthias Zahn and a university chum dreamed up a device to protect software in 1985, they stumbled upon a gold mine. Zahn's FAST Electronic swiftly conquered the German market from its headquarters in a Munich garage. Zahn, then 28, started tinkering with multimedia technology.
By 1990, Zahn had invented a plug-in card that could input videotext from a television to a computer, and sales shot up 70%, to $8 million. Then in 1992, FAST Electronic introduced Video Machine, an add-on board that transforms desktop computers into video-editing machines.
That's when reality hit. Zahn suddenly found himself short of working capital. "I was unconsciously incompetent at financing," Zahn says, grimacing. "I thought it was enough that I understood mathematics."
Orders poured in, yet conservative German bankers wouldn't lend more money. Venture capital in Germany is nearly nonexistent, and the listing of new shares is very strict. So Zahn had to delay payments to suppliers such as Philips Electronics and borrow some $300,000 from friends. The company made it, and in 1993 profits surged to $3.7 million on sales of $33 million.
FAST Multimedia is now a world-class competitor, with 35% of sales in the U.S. To get needed funding, a stock offering is crucial. So FAST Multimedia, which has been spun off from the original company, could be the first German corporation listed on the NASDAQ stock exchange this fall. Such a move could show German venture capitalists and entrepreneurs that there is a way to go public profitably, even if it is outside Germany. "I have a personal mission here. I really want to open that door for other German companies," Zahn says. "If we fail, the door could close quickly."By Karen Lowry Miller in Munich