Factsheet for measure
DE-2020-14/388
–
Updated
– measures in Germany
Customised support for start-ups
Zuschüsse für Start-ups
Background information
The Federal Government makes additional funds available to support the start-up scene and enable them to keep their employees and continue to work on their ideas. The measure is part of the Federal Government's assistance package adopted to cushion the effects of the crisis. The rescue package also includes other changes (for the whole of the economy), such as easing tax burdens for companies improved access to loans or financial help for solo- or micro entrepreneurs.
Content of measure
The Federal Government set up a fund entirely dedicated to start-ups that usually face greater difficulties in securing finances by traditional credit instruments. The start-up booster fund is worth €2 billion and seeks to expand venture capital financing. The government hopes that funding rounds for innovative start-ups will continue and start-ups will remain able to develop their ideas. Therefore, additional public funding will be made available for usage by public venture capital investors, such as the KfW Capital, the High-Tech Gründerfonds or the European Investment Fund. The general idea is that public venture capital investors will use the additional funds to fill-in for other investors that might pull out during the crisis. Small business and start-ups will also be able to profit form venture capital financing and equity replacement financing, if they do not have venture capitalists as shareholders.
Updates
The following updates to this measure have been made after it came into effect.
|
30 June 2021
|
The programme ended on 30 June 2021.
|
|
04 December 2020
|
On 4 December 2020, the Federal Ministry for Economic Affairs and Energy announced to prolong the start-up support until 30 June 2021.
|
|
09 October 2020
|
According to insider news from July 2020, only 10% of the available budget has been granted by authorities. The start-up community criticises that the application process is too bureaucratic and that the final conditions are not favourable, resulting in the low turn-out of application for financial support. Furthermore, start-ups who have been granted support are still waiting for the money.
|
Use of measure
The Federal Government released information on the usage of additional funds granted for start-ups on 18 November 2020: Until 6 November 2020, the KfW Capital and the European Investment Fund received 79 applications worth €1.17 billion. Out of these, 31 applications worth €756.4 million had been granted by 6 November 2020.
At the beginning of February 2021, the KfW announced that it had granted €871 million in funds in 2020 as part of COVID-19 related measures to support start-ups.
As of 9 September 2021, €1.56 billion had been granted to support start-ups during the COVID-19 pandemic.
Target groups
|
Workers
|
Businesses
|
Citizens
|
|
Does not apply to workers
|
Start-ups
|
Does not apply to citizens
|
Actors and funding
|
Actors
|
Funding
|
National government
Company / Companies
|
National funds
|
Social partners
Social partners' role in
designing the measure
and form of involvement:
|
Trade unions
|
Employers' organisations
|
|
Role
|
Consulted
|
Consulted
|
|
Form
|
Direct consultation outside a formal body
|
Direct consultation outside a formal body
|
Social partners' role in the
implementation, monitoring and assessment phase:
-
Unknown
-
Main level of involvement: Peak or cross-sectoral level
Involvement
German social partners are usually consulted by the Federal Government on broader measures, though no formal tripartite social dialogue structure exits in Germany at the federal level. This particular measure was also introduced taking up proposals by the Federal German Start-up Association.
Views and reactions
The Federal German Start-up Association welcomed the new measure after its initiation but also highlighted that a speedy implementation was needed to help start-ups survive.
Sources
