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7 German funding opportunities are now of interest to startups.

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Germany

At Fieldfisher, we support young companies aiming high - especially in the technology sector. Of course, we also support them in financing rounds with investors. But for many a startup, public funding offers a great opportunity. So today, we would like to present seven critical programs.

We will also be happy to determine the right program for you as part of a subsidy quick check. We offer this service quickly and at a reasonable price. Please do not hesitate to contact us.

The article reflects the status as of 25th March 2022.
 
 

Where can I find funding?

It is often not easy to find funding. The best-known place to go for this is www.foerderdatenbank.de - a service provided by the federal government. The platform is tried and tested, contains the essential grants - and is unfortunately also very confusing.

The authors have therefore also founded the platform www.foerdermittelnetzwerk.de. There are extensive overviews of subsidies in various areas and many basic materials on subsidies. In addition, they help companies with the application process. You can register there free of charge.

 

Who awards grants?

There are a great many different funding pots for startups to consider. It is essential to consider which funding pot is the most appropriate care. There is, therefore, no such thing as "one funding source." It is crucial to distinguish between the possible sources of funding. The following are potential sources of funding:
  • The European Union also awards funding directly in so-called "calls." However, these are intended for substantial projects and are considered high-tech projects. Separate from this is the allocation of EU funds, e.g., from the European Regional Development Fund (ERDF), via the member states.
  • The federal government itself allocates funding from its budget, for example, via the federal ministries or the KfW. In these cases, the federal government itself is the grantor.
  • The federal states also award grants themselves with their programs.
  • Finally, cities and municipalities can also award grants themselves in individual cases.

In rare cases, charitable foundations are also available as grantors, providing appropriate support for special projects, particularly social ones.

It is, therefore, necessary to look around. Accordingly, we present below seven selected funding pots from our practice.

 

Funding at the federal level

First, we take a comprehensive look at the federal level - here, the federal government is the funding provider.

1. "High-Tech Start-up Fund (HTGF)."
The "High-Tech-Gründungsfonds (HTGF)" can be interesting for some startups. More details about the program can be found here.

The most important key points:
  • The funding provider is the Federal Ministry of Economics and Climate Protection (BMWK).
  • Funding is provided for startups and small companies no more than three years old.
  • As a funding, companies receive equity investments and loans of a maximum of EUR 3 million per company.

Funding is provided for technology startups from Germany in the areas of:
  • Digital Tech
  • Industrial Tech
  • Life Sciences
  • Chemistry and
  • related business areas

The funding program aims to close the financing gap for newly established technology startups and create new jobs. The products, processes, and scientific-technical services must have a high degree of innovation, clear competitive advantages, and sustainable market opportunities. In addition, the startup must be growth-oriented and majority-owned by management.

For whom is this program suitable? For startups with a funding gap and cannot find a private capital provider. They can bring the state on board to provide them with fresh capital. In addition, state participation can also attract other investors.

What's wrong with this funding? That the state is on board. Because, of course, the state thinks and acts differently than private investors. Nevertheless, founders known to us have had good experiences with the fund. So let's talkabout the pros and cons of this program.


2. "DeepTech Future Fund (DTFF)"
If you want to go even higher, you should look at the "DeepTech Future Fund" - it is mainly aimed at companies with the potential to become "unicorns." Details on the program can be found here.

Key points:
  • The funding provider is the German Federal Ministry of Economics and Climate Protection (BMWK).
  • Possible grant recipients are companies and startups in the field of DeepTech with their registered office or place of business in Germany.
  • Funding is provided for an investment of up to EUR 30 million per company. The fund only invests jointly with private equity investors and mirrors their investment.

Fast-growing startups in the field of high technology (DeepTech) are supported:
  • Promising startups on their way to capital market maturity with viable business models with a longer-term development cycle and high financing requirements are supported.
  • The focus is on companies from the fields of Industry 4.0/ IoT, robotics, AI, quantum computing, blockchain, and process automation.
  • However, companies with a technology-based business model such as digital health, new energy, fintech, smart city, and selected biotech areas are also funded.

The company must have the potential to become a market leader. In addition, private investors such as evergreen funds, listed investment companies, foundations, family offices, private companies, or business angels must have a long-term investment horizon and focus on the sustainable growth of their investments.

For whom is this program suitable? For startups that need a considerable amount of capital and are willing to bring the state on board in addition to private investors. Here, it can also be interesting to open government channels and create government goodwill through government participation - possibly opening doors that would otherwise remain closed.

What are the arguments against this support? Government involvement can also paralyze rapid growth. Let's talk about the pros and cons.


3. "Research, development, and use of artificial intelligence methods in SMEs."
For companies in AI, this program can be exciting. Details can be found here.

Key points:
  • The funding provider is the German Federal Ministry of Education and Research (BMBF).
  • Companies, universities, and research institutions can apply for the funding.
  • The funding is awarded in the form of a grant.
  • Funding is available for individual or joint projects on the following topics:
  • automated information processing,
  • digital assistants,
  • computer vision/image understanding,
  • speech and text understanding,
  • data-driven systems and data engineering, and
  • Basic issues related to intelligent systems.

In doing so, the company must work with its AI application in one of these areas:
  • Renewable Energy, Ecology,
  • Logistics, mobility and automotive,
  • production technologies, process control, and automation,
  • innovative user-oriented services, and
  • Data and ICT (information and communication technologies) economy.

You will receive funding as a grant for a period of mostly 2 to a maximum of 3 years - the maximum financing is EUR 100,000 per year.

For whom is this program suitable? For startups that are developing AI offerings.

What are the arguments against this funding? First, the application process can take time.


4. "Funding for innovative, agriculture-related startups from federal special-purpose funds."
This program is warmly recommended for companies that want to collaborate with farms. Details about the program can be found here.

Key points:
  • The funding agency is the Federal Ministry of Food and Agriculture (BMEL).
  • Funding is provided to startups and companies whose registration in the commercial register dates back a maximum of 5 years.
  • A subsidy of 90% of the expenses up to a maximum of EUR 50,000 is granted. In addition, a loan of max. EUR 1 million of the eligible costs can be considered.

The following are eligible for funding:
  • Operating costs (e.g., rent and personnel)
  • marketing
  • Concepts and studies
  • Investments in assets
  • Market development and training
  • Expenses for the further technical development of the product or service idea and, if applicable, for securing protection and trademark rights
  • External consulting, training, or coaching measures

The funding supports the financing of expenses related to establishing a company or its consolidation in the early financing phase.

For whom is this program suitable? For startups that want to gain a foothold in the agricultural sector.

What is wrong with this funding? First, the application process can take time.

 

Programs at the state level

The states have excellent programs for startups. They are awarded through the investment banks of the states. These can be particularly interesting. This is because the federal states want to attract startups and compete for their support.

Of course, not all state programs can be presented here. However, we offer exemplary programs from the federal state of Hamburg. We would be happy to identify comparable programs in another federal state for you.
 
5. "InnoFounder"
Hamburg's "InnoFounder" program is an inspiring program; however, comparable programs are also available in the other federal states. Details can be found here.

The most important key points:
  • The grant is awarded through Hamburgische Investitions- und Förderbank (IFB Hamburg).
  • Start-ups and companies with a maximum of 5 employees are eligible for funding.
  • The funding is granted as a grant of a flat rate of EUR 2,500 per person per month for full-time employees for a maximum of 18 months. In total, the subsidy can amount to EUR 75,000.

Funding is available for:
  • Innovative startup teams and individual founders in the pre-founding and startup phase.
  • All industries, especially new types of digital startups such as media startups and content-oriented startups
  • Personnel and startup costs 

The planned or existing company headquarters must be in Hamburg. Existing startups with annual sales or an annual balance sheet total of max. EUR 500,000 that have been in existence for less than one year are also eligible to apply. The intended innovative products or services must stand out significantly from the competition and have prospects of economic success. In addition, due to the novelty, there must be unique risks in the different conception and market launch.

For whom is this program suitable? For startups that want to gain a foothold in Hamburg and need support for the wage costs of their employees.

What are the arguments against this funding? The application process can take time


6. "InnoRampUp"
Hamburg also has an inspiring funding program with the "InnoRampUp" program. Details about the program can be found here.

The most important key points:
  • The grant is awarded through Hamburgische Investitions- und Förderbank (IFB Hamburg).
  • The program is aimed at startups and companies no more than two years old.
  • Funding is granted as a grant of max. EUR 150,000 per project; in exceptional cases, up to 100% of eligible expenses are subsidized.

Funding is available for
  • Market and feasibility studies as well as strategy development (business plan, market development, and growth strategy)
  • Search for partners, founding teams, and employees
  • Qualification and further training
  • Prototype development and testing, implementation, incl. product facilities
  • Securing of rights, patent development, and patenting
  • Marketing activities

The planned or existing company headquarters must be located in Hamburg. Furthermore, the project must have demanding innovative content and recognizable market potential and serve the creation of jobs and promote the economic performance of the Free and Hanseatic City of Hamburg.

For whom is this program suitable? For startups that want to develop their products and services further and do not yet have an investor.

What are the arguments against this funding? First, the application process can take time.


7. "Hamburg-Kredit-Innovation".
Those who need a loan should not always look immediately to the well-known programs of the KfW. The federal states also offer outstanding programs here through their investment banks. One such program in Hamburg is the "Hamburg-Kredit-Innovation" program. Details about the program can be found here.
The most important key points:
  • The grant is awarded through Hamburgische Investitions- und Förderbank (IFB Hamburg).
  • Startups and unlisted SMEs with their registered office or place of investment in Hamburg are eligible for funding.
  • The subsidy is granted in the form of a loan. The loan covers at least EUR 25,000 of the costs, max. EUR 2 million. The loan enables low-interest and long-term financing.

Funding is provided for investments and working capital for:
  • The market launch and growth with already developed innovative products, processes, and services (e.g., investments in equipment and machinery, tests and certifications, personnel costs).
  • The development of new or significantly improved products, processes, and services
  • The digitization of products, services, processes, and organizational methods (including IT security, cloud technology, digital sales channels, additive manufacturing processes such as 3D printing)
  • The growth of innovative startups

Who is this program suitable for? For startups that want to develop their products and services further and do not yet have an investor.

What are the arguments against this funding? First, it is a loan, so repayment is required.

 

Outlook

Only a few programs could be presented here. There are many exciting subsidy programs for startups. Feel free to contact us, Dennis Hillemann and Tanja Ehls; we will be happy to support you in identifying suitable programs and in the application process.

In addition, we also advise with our knowledge how startups could secure even better chances for funding, e.g., through cooperation. So just get in touch, and let's get talking.

 

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