Grants, loans, guarantees, participations and know-how: The BMWi supports tech and life science start-ups to turn promising ideas into successful companies.
In Germany, there is an extensive and well-funded range of financing instruments that are closely geared to the needs of innovative start-ups. The Federal Ministry for Economic Affairs and Energy (BMWi), the ERP special funds managed by the BMWi, the provinces and their guarantor banks, private investors such as business angels and venture capital companies support start-ups in all entrepreneurial development phases.
Start-ups: innovative and fast-growing
The Federal Association of German Startups e. V. defines startups as companies that
- younger than ten years are and
- with their technology and / or their business model are (highly) innovative and / or
- show or aim for significant employee and / or sales growth.
The term “start-up” can be applied intersectorally to all founders. Start-ups show their economic significance primarily as job drivers: According to analyzes by KfW Bankengruppe, all start-up companies that are not older than one year employ an average of 0.8 people. For start-ups, there are already 3.5 on average in the comparable period, the Startup Monitor 2016 states. At the same time, today’s start-ups are tomorrow’s hidden champions: medium-sized companies that are leading the way with their innovative products and services on international markets.
Financing secures startup and growth
Start-ups need suitable and reliable financing for start-ups, growth and internationalization. The Federal Ministry for Economic Affairs and Energy therefore provides special financing instruments for innovative and technology-oriented founders, in addition to the proven subsidy loans and guarantees – as a substitute for bank-standard collateral. The reason for this lies not least in the fact that the “classic” start-up promotion via bank loans plays a rather subordinate role for start-ups – especially in the pre-seed and seed phase. This is understandable insofar as banks and savings banks are often difficult to assess innovative business models and their market potential due to their technical novelty.
In addition, there is the usually high capital requirement with usually missing collateral. And last but not least, it may take up to several years for the technology or LifeScience-based spin-offs from universities and research institutes to make the necessary market development possible before the product or process has the necessary marketability and the company can be in the black.
The Federal Ministry of Economics and Technology therefore supports innovative start-ups with tailor-made funding instruments and thus supports them
- the preparation of business plans
- additional research and development to adapt the product or service to the market
- the development to maturity
- Investments in the technical equipment of the company to realize the market entry
- Marketing and sales development
- the international market entry