Venture capital in Germany is helping innovative small firms by providing them with funding and expertise. This study found that an increase in venture capital investments leads to more patent applications in the country. Specifically, doubling the amount of venture capital invested results in a 12% rise in patent applications, while doubling the number of venture capital-backed firms leads to a 21% increase in patent applications. This suggests that the growth of the German venture capital market could boost innovation similar to what has been seen in the USA.