Start-Ups: Financing Start-Up Preparation
April 27, 2019
Every startup starts with a good idea. The exciting question is: how can the idea be used to develop a promising business model? What does it take to realize the idea?
The time and financial expenditure for innovative technology-oriented
Start-ups is large and can range from a few months to several years. The costs for one’s own livelihood, for employees, consulting, technical equipment and material are correspondingly high. The Federal Ministry of Economics
therefore supports start-ups during the pre-seed phase with grants and know-how.
Both the funding program “EXIST – Business Start-Ups” and the “Founders’ Competition – Digital Innovations” play an outstanding role here
EXIST – business start-ups
EXIST is aimed at (former) university graduates, academic staff and students who have developed a promising idea as part of their studies or promotion. From this idea to develop a viable business model with a marketable product – it helps EXIST.
For technology- and knowledge-based foundations: EXIST founder scholarship
In 2016, there was something to celebrate: the 1,500. EXIST founder scholarship since 2007 went to “integrAi.de”. The spin-off of the University of Würzburg is developing services for municipalities to integrate refugees into the labor market more quickly and accurately. In addition to training for volunteer “job coaches”, the placement can be supported by a special software. And that is exactly what EXIST is all about: the business model must be based on an innovative technology-oriented or knowledge-based idea. This must be clear from the application made through the university or research institution at Projektträger Jülich. “In addition to the innovation and the necessary scientific and technical competence, business management and entrepreneurial skills play an important role in the team as well,” emphasizes Dietrich Hoffmann, head of company formation at Projektträger Jülich. Therefore, the founding team in the application must state whether and to what extent it covers this area of competence. “A common mistake is too volatile a competitive analysis,” stresses Dietrich Hoffmann and adds: “In particular, potential offers from competitors must be taken into account in order to differentiate themselves clearly, because without adequate USPs and clear customer benefits EXIST applications are not eligible.”
Those who receive an EXIST startup scholarship have twelve months to fully concentrate on their start-up preparations. In doing so, EXIST not only provides a subsidy to secure a livelihood, but also offers a budget for material expenditure and coaching services. In general, know-how and networking play a decisive role in EXIST. This is ensured by the founding networks of the universities, which not only offer the founding teams premises, but also provide advice and assistance.
For research-based start-ups: EXIST research transfer
It takes time and money to develop and launch sophisticated and innovative research results into marketable products or processes. More specifically, it is about several years and one to two-digit million-euro amounts. Nevertheless, it can be worthwhile in many ways, as a scientist to venture a “career” as an entrepreneur. Help is provided by EXIST research transfer. The extensive funding supports outstanding research-based start-up projects, which are associated with complex and risky development work. “The aim of EXIST research transfer is to translate scientific results into technical products and processes, to work out the business idea based on them into a business plan and to prepare the planned business start-up”, says Dietrich Hoffmann, head of the project management Jülich, who runs the EXIST program for the BMWi implements. “In the second phase to carry out further development work, measures to commencement of operations and laying the foundations for an external corporate finance are in focus.”
The start-up teams receive grants for up to three years to finance their own livelihood, as well as personnel and material expenses. In addition, the founders can use the infrastructure of their university or research institution and are specifically prepared for their future role as entrepreneurs through events and personal counseling sessions. EXIST founder scholarship and EXIST research transfer are co-financed by the European Social Fund.
(Source: GründerZeiten extra, BMWi, Berlin)
You might also be interested in these articles:
- Start-up financing – Support for technology-oriented start-ups
- Start-ups: financing and venture capital
- Six landmarks for business start-ups
- Start-ups: Seed phase: Financing the start of a company Part 1
- Start-ups: rounds of financing after phases
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