Business angels and start-ups will have planning security again in the future: The INVEST programme, which expired at the end of 2022, will be relaunched, so that the venture capital grant can flow again. The EU Commission has given the green light for the continuation, but there have been adjustments to the funding guidelines.
For almost 10 years, the funding programme “INVEST – Grant for Venture Capital” has provided young innovative companies with improved access to venture capital by providing business angels with a government grant in the form of an INVEST grant for taking risky stakes in these companies.
Public subsidies may only be granted if they are absolutely necessary. This is stated in the so-called “EU state aid control”, which stands up for a level playing field in the sense of a functioning internal market and is to ensure that state aid (subsidies) does not distort free competition. Therefore, the necessity of the INVEST programme was recently reviewed within the framework of a study. The results of the study are now available and confirm the necessity of INVEST funding. The funding guideline was then revised on the basis of the further study results. The previous INVEST funding guideline, which was limited until 31.12.2022, will now be replaced by this revised INVEST funding guideline.
The following adjustments to the funding programme will be made with the funding guideline valid from 06.02.2023:
25 percent acquisition subsidy for direct share purchases (previously 20 percent) and for convertible loans (previously 10 percent).
Introduction of an “INVEST budget” of 100,000 euros in acquisition subsidies per investor (i.e. no more INVEST subsidies once 100,000 euros in acquisition subsidies have been paid out or approved).
10,000 euros minimum investment sum (previously 25,000 euros)
200,000 euros maximum eligible investment sum per investment
Limitation of the subsidy to 25 percent (previously 80 percent) of the investment sum
Expansion of the permissible legal forms for eligible enterprises to include registered cooperatives (eG)
“The new funding guideline has both light and shade,” finds Christoph J. Stresing, Managing Director of the Startup Association: “In future, no follow-up financing will be funded. Particularly active business angels with high investment volumes will also be dropped from the funding. On the positive side, however, the grant itself will be increased by 5 per cent to now 25 per cent.”
The INVEST funding
INVEST brings together start-ups and private investors who believe in bold ideas. The funding programme mobilises more private venture capital from business angels and thus helps start-ups find an investor more easily. Start-ups often fail in the early stages because they lack the necessary venture capital. This is precisely where the Federal Ministry for Economic Affairs and Climate Protection comes in with its INVEST funding programme. Since May 2013, the Federal Ministry for Economic Affairs and Climate Protection has been promoting investments by private individuals, especially business angels, in start-ups with tax-free grants through the programme “INVEST – Grant for Venture Capital”.