Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure DE-2013-18/2530 – Updated – measures in Germany
Country | Germany , applies nationwide |
Time period | Open ended, started on 01 May 2013 |
Context | Restructuring Support Instruments |
Type | Legislations or other statutory regulations |
Category |
Reorientation of business activities
– Matching/networking |
Author | Birgit Kraemer (Hans Boeckler Foundation) and Eurofound |
Measure added | 23 June 2022 (updated 02 November 2022) |
The program "INVEST - grant for venture capital" brings together SMEs, business start-ups, and private investors (Business Angels, i.e. often ex-managers or start-up entrepreneurs who sold their company and who have capital and expertise, gained from running their own company). Networks are set up for the purpose of establishing initial contact between SMEs and investors (BAND, 2022). With the INVEST program the Federal Ministry for Economic Affairs and Climate Protection promotes Business Angel investments in young, small, innovative corporations (INVEST, 2022).
The Federal Ministry for Economics and Energy set up a the programme "INVEST - Venture Capital Grant" in 2013 to support private investors of venture capital, the so-called Business Angels.
Business Angels invest their private capital in business start-ups that involve innovative ideas and products. With the INVEST scheme private investors who invest in young, innovative companies can receive a tax-free refund of 20% of the investment sum (acquisition grant). Additionally, the investor (natural person) receives a flat-rate tax compensation of 25% of the profit made from the sale of his shares (exit subsidy).
To be eligible, the private investor must acquire normal, fully risk-bearing shares in the company, hold them for at least three years, and not be otherwise affiliated with the company. The financed company must be independent, innovative, small and not older than 7 years. The investor must provide the company with at least €10,000. Each investor can apply for grants for share purchases of up to €500,000 per year.
The INVEST scheme enables many new businesses in the high-technology sector to set up; Business Angels can help by sharing their financing and business knowledge. Business Angels are more flexible than other investors as they invest their own money. Moreover, entrepreneurs do not have to pay high monthly fees.
In recent years, several service providers, like platforms, online tools or controlling instruments, have been established to support the framework of Business Angels. A good platform example is the Business Angels Network Germany (BAND, 2022). BAND organises workshops,exchange of experiences, promotes cooperation and good practices, and provides information about start-up funding.
The following updates to this measure have been made after it came into effect.
The program "INVEST has new funding and guidelines: a grant for venture capital" brings together SMEs, business start-ups, and private investors (Business Angels, i.e. often ex-managers or start-up entrepreneurs who sold their company and who have capital and expertise, gained from running their own company). Networks are set up for the purpose of establishing initial contact between SMEs and investors (BAND, 2022). With the INVEST program the Federal Ministry for Economic Affairs and Climate Protection promotes Business Angel investments in young, small, innovative corporations (INVEST, 2022). |
According to the 28th Subsidy Report of the German Federal Ministry for Finance, the INVEST programme had a financial volume of €28.4 million in 2019, €31.6 million in 2020, and €44.2 million both in the years 2021 and 2022. More than 11,800 approvals with a volume of over €188 million have already been granted. The measure has a significant mobilising effect: For every €1 that is paid in the acquisition subsidy, the investor invests an additional €1.50 in a company on average. (BMF 2022).
Workers | Businesses | Citizens |
---|---|---|
Does not apply to workers |
SMEs
Start-ups |
Does not apply to citizens |
Actors | Funding |
---|---|
National government
Company / Companies |
Companies
European Funds National funds Other |
Social partners' role in designing the measure and form of involvement:
Trade unions | Employers' organisations | |
---|---|---|
Role | Unknown | Unknown |
Form | Not applicable | Not applicable |
Social partners' role in the implementation, monitoring and assessment phase:
Unknown
Unknown
Citation
Eurofound (2022), INVEST - Grant for venture capital, measure DE-2013-18/2530 (measures in Germany), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/DE-2013-18_2530.html
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