Incentives
Equity from Public Sources
Start-ups and technology companies are often financed by a high degree of equity. However, equity also represents an efficient method of financing for all industry sectors.
Choosing Appropriate Public Equity Capital Providers
Depending on a company's growth phase status and industry sector, different amounts of equity capital will be needed. In Germany, equity from public sources is available from a number of different channels.
Start-ups normally look for seed financing for market entry. In this case, the selection of a venture capital provider is a suitable solution. So-called “pitch events” are one way of getting in touch with venture capital companies.
Innovative enterprises in a later development stage are often contacted directly by providers of equity capital looking for investment opportunities. They may also contact equity capital providers directly.
MBGs (Mittelständische Beteiligungsgesellschaften/ Public-Private Equity Companies) pursue a broad financing approach. In addition to equity capital, mezzanine financing is also offered. Companies in all business phases (start-ups, established growing enterprises, turnarounds, company sucessions) can apply for capital from MBGs.
Germany Trade & Invest's financing experts support investors in identifying appropriate equity partners according to their company's respective development stage.
High-Tech Gründerfonds and coparion
The High-Tech Gründerfonds (HTGF) is the largest and most active seed stage fund in Germany focusing on technology driven start-ups. The initial investment (seed phase) totals EUR 1 million. The maximum possible HTGF investment level available amounts to EUR 4 million per enterprise.
HTGF support goes beyond providing money for realizing new business ideas. It also offers a high level of technology expertise, a broad network of scouts and capital providers to secure further growth of the new company after the seed phase. Besides the KfW and the Federal Ministry for Economic Affairs and Climate Action, more than 45 renowned German corporations have provided capital to the fund.
Coparion offers young and innovative companies in the start-up and early growth phases direct access to funds of up to EUR 15 million in several rounds. Coparion invests in companies headquartered in Germany together with other investors subject to the same conditions and amounts.
With an asset management of total EUR 275 million, coparion has the required flexibility to invest in promising businesses.
Public VC in the Federal States
Venture capital companies (VC) in the federal states offer equity financing to young and innovative enterprises to support early stage development. These VCs act as subsidiaries of the development banks of the federal states and support companies actively by providing risk capital as well as management and industry knowledge for their further development.
The investment focus is on innovation and mainly on industry sectors including ICT, life sciences and new materials. Subject to the regulations of the individual venture capital company, financing volumes of around EUR 10 million are achievable.
Public-Private Equity in the Federal States
For established companies seeking to finance further growth, as well as for start-ups, 15 MGBs (Mittelständische Beteiligungsgesellschaften - “Public-Private Equity Companies for Small and Medium-Sized Enterprises") are available as financing partners in the federal states. Acting as independent institutes, they are supported by the federal states.
MBGs operate primarily through silent participation by providing subordinated capital. The investment focus is not limited to special industry sectors.
An equity searching company can expect a financing volume of up to EUR 1 million. It is characteristic that the individual MBGs are only active in their respective federal state. They do not operate to maximize profits. A further advantage is that a MBG investment is recognized as economic capital and thus significantly improves the company's rating. With an improved rating, a company has easier access to bank financing.
