Facilitating company foundations, strengthening funding

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The Federal Government’s start-up strategy Facilitating company foundations, strengthening funding

The Federal Government wants to strengthen and promote young, innovative companies with growth ambitions. The Federal Cabinet has therefore adopted the first comprehensive start-up-strategy; its priorities include giving start-ups fast access to funding and financing without unnecessary bureaucracy.

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The Federal Government’s start-up strategy is intended to improve conditions for young, innovative companies, facilitate company foundations and strengthen funding; the measures for this are bundled into ten action areas. The Federal Cabinet adopted the strategy on Wednesday.

Among other things, the start-up strategy will make it easier for start-ups and young companies to access public contracts in a legally watertight way, and simplify setting up spin-off companies from the academic sector. It will now be possible to set up companies entirely digitally and, wherever possible, within 24 hours. To this end, the relevant online services by the Federal and Länder Governments and notaries will be connected, making an important step towards a one-stop shop so that start-ups can obtain information and applications from a single source. In addition, the start-up strategy breaks down obstacles for women and people from migrant backgrounds to access financing and funding and offers better access to venture capital for female founders.

Fast access to funding and financing

Via a digital funding portal, the Federal Government will bundle funding for citizens from the Federation, Länder and municipalities – all in a user-friendly and centralised way.
The idea is that interested parties will search for, find, apply for funding and complete the entire process via the portal. This enables quick access to funding and financing without unnecessary bureaucracy, particularly for start-ups.

Strengthening funding

The Federal Government already supports companies in future-oriented areas such as digitalisation, life science, technology development, climate and environment, and education and social affairs, through its broad toolkit of start-up funding. It plans to significantly expand the financing possibilities for start-ups and strengthen companies in different financing phases, with a focus on the capital-intensive growth phase. Together with private investors, the Federal Government will make a decisive contribution to mobilising more private and public capital for Germany as a venture capital location.

With the future fund and its individual modules, the Federal Government is supporting innovative, technology-oriented start-ups in their growth phase. It is making ten billion euros of public funds available for this through the KfW banking group in an investment period lasting until 2030. Together with private investors, during this period it aims to mobilise 30 billion euros of private and public capital for Germany as a venture capital location.

Start-ups are characterised by an innovative business model, an innovative product or an innovative service. They are active in a number of sectors, for example in information and communication technology, the health sector and industry. Start-ups develop new markets and stimulate competition. They therefore play an important role in the advancement and competitiveness of the German national economy.

Better conditions for public welfare-oriented start-ups

Business models of public welfare-oriented companies are primarily aimed at making a positive social impact and not necessarily at maximising company profits. They have massive potential to solve social problems using corporate means. Suitable financing instruments, particularly including European structural funds, will be developed for them in order to facilitate their access to funding. This strengthens the growth opportunities of public welfare-oriented start-ups and enables them to extend their social contribution.

Close networking for a strong start-up ecosystem

The Federal Government will promote the networking of all relevant actors in the start-up ecosystem. To this end, it will organise the first “Start-up Summit Germany” together with the stakeholders. A network of contact points for start-ups will be set up in all Federal Ministries and subordinate authorities. The dialogue with all the relevant stakeholders will be regularly continued; this particularly applies to the dialogue between the Federal and Länder Governments.

Implementing measures promptly

The Federal Government will implement the measures bundled in the start-up strategy within this legislative period and report annually on the implementation status. In addition, it will check regularly whether and how the strategy should be further developed, while maintaining a dialogue with all relevant stakeholders.