Get Backing in Berlin
Financing your startup or your firm’s project in Germany’s Capital.
How to get your startup funded? Financing the project is almost always the most pressing question for founders and entrepreneurs. Whether it’s finding seed money to turn your idea into an MVP, tiding you over before the revenue rolls in, or having the resources to scale your company, you always seem to require more capital than your current liquidity.
So why is Berlin such a good place to gain traction and increase impact? Are investment opportunities particularly good in the German capital?
There are many ways to finance businesses and it’s not easy to keep track of all opportunities. We provide an overview below. The easiest and safest way to check out the options is to get free advice from the experts at Berlin Partner, Berlin’s business development agency.
In Germany, funding programs are divided into three tiers:
- Regional – in the Berlin Brandenburg region there are many programs. The most important player you should know is the investment bank InvestitionsBank Berlin (IBB).
- National – the German state-owned investment and development bank is called the KfW, and the Federal Ministry for Economic Affairs and Climate Action runs many nationwide programs.
- European – the European Union, the European Investment Bank, the EUeic (European Innovation Council), or Horizon Europe fund mostly joint projects, so are good investors particularly if you have partners from other European countries.
The many regional public programs work in different ways. Some may offer tax benefits and incentives (for instance for R&D), subsidies and grants (in some cases non-refundable), reimbursement of certain costs, low-interest loans, equity plans, or silent partnerships. Most of these programs are designed for autonomous SMEs with less than 250 employees and which are not active in certain fields (NACE), for instance financial services or utilities services such as energy. You can combine programs and subsidies so long as the total money you receive stays under a certain threshold (de minimis). In general, most development programs support projects that are not yet underway, so inform yourself and apply first before you get too far down the road. In the case of reimbursement programs, don’t forget you have to apply for the money before you can spend the money.
Some Berlin programs you should know
- The Berlin Startup scholarship is a stipend for founders, see also startup-map.berlin
- If you’re designing a new product in Berlin, check out Design Transfer Bonus
- Innovation Assistant is a grant towards helping you employ graduates in a technological field
- ProNTI is a new program for non-technological innovations – see also here
- GRW is a program dedicated to supporting regions economically – see also the business location map and the Berlin senate page
If your idea is not quite ready yet and you need some more preparation, you could look to
- the deGut fair for founders
- the BPW business plan competition
- regular start-up classes for English-speaking founders provided by the Chamber of Commerce and Industry of Berlin (IHK Berlin)
All of them can potentially lead you to finding angels or investors, and any of them can help get you ready for that trip to the investment bank to pitch your project.
Microcredits, Loans, and Guarantees
The IBB offers access to a few programs for small or short-term loans.
Also check out the Micromezzanine Fund Germany.
The IBB supports Berlin startups and companies with many programs designed to strengthen Berlin’s economy, such as:
- Berlin Start, granted in conjunction with a guarantee by BBB Bürgschaftsbank (see below)
- Founding BONUS, which co-finances young, small companies with an innovative USP for materials, investment and operating expenses, including personnel
- ProFIT for R&D in tech startups, including projects in connection with research institutes
- Berlin Infra for infrastructure projects
And then there’s the potential silent partner MBG Berlin-Brandenburg.
If you need added securities or guarantees, check out the BuergschaftsBank Berlin.
Once you’ve settled in Berlin, there are a number of federal programs that you should be aware of.
- If you are a solopreneur, you should check Germany Starting
- If you have recent graduates from a German university on your team, Exist is an option for you
- INVEST subsidizes business angel investments
- For small and medium sized firms finding digitalisation a challenge there is go-digital
- For SMEs needing help innovating there is go-inno, which offers vouchers for consultants
- ZIM promotes innovations by SMEs
- Wipano is a program for patents and standards
If you are a social startup working towards not only profits but public wellbeing and the common good of citizens in general, you should know the program REACT with impact.
If you are looking to raise some serious capital, before going to private VCs, check out if there is a state supported program which might be a good fit for you.
- The KfW offers Venture Tech Growth Financing
- The Future Fund is actually a range of instruments to fund innovative start-ups
- The DeepTech & Climate Fonds (DTCF) is a new investment fund for ground-breaking technology
- KfW Capital, The Federal Ministry for Economy and Energy with their ERP-Special Fund, and the EIB European Investment Bank run Coparian co-investment
- IGP is a funding program for innovative business models
Of course, next to regional and federal programs, the private investment scene in Berlin is strong. Since public programs have a vested interest in strengthening the economy in general and are highly regulated (they do, after all, provide public money), there is always a fair degree of paperwork involved in the application and in the due diligence required should your application succeed.
In some cases, the simple goal of a return on investment makes private backing a less tangled proposition. Berlin is the best place in Germany to get startup capital. Here are a few pointers.
Perhaps the least complicated way to get an idea off the ground is to find some backing from individuals with capital to spare who are looking for an investment opportunity. See for instance:
In some cases it might be wise to seek a partner who is already established. If they share your market, can give you access to the customers in this market, and their interests align with yours, why not let them give you a financial boost. In return, you give them innovation potential and a ROI.
There are many networks and events in Berlin where you can establish contacts with potential partners. Berlin Partner cluster managers are extremely knowledgeable and may be able to set up meetings for you. Furthermore, Berlin Partner is actively involved in certain networks, such as #ai_berlin.
If you’re in the creative industries, check out Medianet Berlin Brandenburg.
The Chamber of Commerce and Industry of Berlin (CCI) can also point you in the direction of your sector.
When networking, ask around for family offices. While family offices are notoriously discrete and hard to gain access to, and traditionally not based in Berlin, there are possibilities to find some here since they can’t avoid the capital to invest their capital.
If you’re looking for serious money and maybe an exit from your own startup some way down the road, you may be interested in venture capital. Your first port of call should again be the IBB, who run their own IBB VC Fund.
You should also definitely check out the HTGF, the high tech founders fund, which is a sizable public-private partnership running since 2005.
And of course there are numerous private VC companies operating out of Berlin. Here are just a couple, in no particular order:
- PropTech1 Ventures, for real estate
- SquareOne by Paua Ventures Management
- La Famiglia
- Seed and Speed
If you have a social or climate focus, the following should be interesting:
- Revent is an early stage VC for founders tackling health, sustainability, food, and the climate crisis.
- AENU “invest in technologies that contribute to solving the climate crisis or advancing social equality.“
- Extantia only backs startups who will make a positive impact in the transition to a sustainable economy, primarily by addressing the climate crisis. They see decarbonisation as a business opportunity, saying, “Cooling down the planet requires hot ideas.”
- Carbon Thirteen, an international player with a clear climate focus who recently set up an office in Berlin.
Cleantech is one of the hot topics, with several of the accelerators in town focusing on clean technology.
To put it succinctly, Berlin offers the best chances to raise money – which is probably why the number of billion dollar startups in Berlin is increasing steadily. For more VCs and general information on starting up in Berlin, click here.
Where else to look if you’re starting something in Berlin
Not only is investment possible in Berlin, finding the necessary knowledge is also easy. Here are some other sites you should check:
- Founding in Berlin
- Berlin.de grant programs, see also here
- Chamber of Commerce and Industry of Berlin (IHK Berlin) financing models
- Foerderdatenbank is a database of federal and EU programs
- Federal Financing for start-ups, company growth, and innovations
- Foerderbar is a funding consultancy for the IT and digital sector
All in all, if you have a good idea, Berlin is an excellent place to get the backing for it.
Text: Olaf Bryan Wielk, ideenmanufaktur
Header image: © Ridofranz