Karl Matthaus Schmidt

Germany used to be a financial desert as far as private investors were concerned. People wanting to trade stocks had to pay their brokers a full 1% of the transaction value. The clearing and settlement system was slow, and stock market information was in pitifully short supply.

Then Karl Matthaus Schmidt had a brainstorm. Having just completed business studies at Nuremberg University, he looked across the Atlantic to discount brokers such as Charles Schwab Corp. Why couldn't he combine Internet technology with high-quality stock market information to give investors a cheap, reliable way of trading securities? In 1994, Schmidt set up ConSors Discount-Broker in Nuremberg with $5 million in capital provided by SchmidtBank, the family bank his father runs. Germans flocked to the new system, especially after a popular equity culture began to develop following the privatization of Deutsche Telekom in 1997. "ConSors made direct brokerage popular in Germany," says Ralf Dibbern, banking analyst with M.M. Warburg & Co., the Hamburg private bank.