Factsheet for measure
DE-2013-18/2530
–
Updated
– measures in Germany
INVEST - Grant for venture capital
INVEST - Grant for ventrue capital
Background information
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).
Content of measure
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. Under the INVEST programme, private investors who invest in young, innovative companies can now receive a tax-free refund of 15% of the investment amount (acquisition subsidy). Until 6 March 2024, the refund was 25%. 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. The investment amount may not exceed €333,333.33 per investment and the investments can be subsidised with an acquisition grant up to a maximum amount of €666,666.66 per investor.
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.
Updates
The following updates to this measure have been made after it came into effect.
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02 November 2022
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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).
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Use of measure
By 31 December 2023 (BMWK, 2024):
- 1.5 billion euros of venture capital mobilised through INVEST since May 2013
- 19,802 investments approved since May 2013.
- On average, each investor has invested 78,000 euros of venture capital in a start-up.
- 58% of all companies in which investors were involved come from the ICT sector (information and communication technology).
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).
Target groups
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Workers
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Businesses
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Citizens
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Does not apply to workers
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SMEs
Start-ups
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Does not apply to citizens
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Actors and funding
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Actors
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Funding
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National government
Company / Companies
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Companies
European Funds
National funds
Other
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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Unknown
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Unknown
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Form
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Not applicable
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Not applicable
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Social partners' role in the
implementation, monitoring and assessment phase:
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Unknown
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Main level of involvement: Unknown
Involvement
Unknown
Views and reactions
Unknown
Sources
