How can I finance my B2B startup

Startup funding

Every startup deals with the question of financing. The costs for the establishment, premises, personnel and equipment are usually incurred from the first day. Startups can take a variety of routes to meet this funding requirement. The following is an overview of the different startup financing options:

1. Start-up financing with the help of state subsidies

The state supports founders with various grant programs to set up their own business. Here are some examples:

  • Students, graduates and scientists who want to realize their start-up idea have the opportunity to apply for the Exist start-up grantof the Federal Ministry for Economic Affairs and Energy. Depending on the applicant's degree, the monthly financial support varies between EUR 1,000 and EUR 3,000 per month. The maximum term is one year.
  • The Bavarian State Government supports with the Bavarian program for technology-oriented business start-ups (Baytou) Startups in the development of their products, processes and services. Selected start-ups receive funding of a maximum of 3 percent of the eligible costs of the concept phase as well as 45 percent for a development project. The maximum funding amount for software development is 150,000 euros, for technological work in the concept phase it is 26,000 euros.
  • The Flügge programof the Bavarian Ministry of Economic Affairs supports start-ups from Bavarian universities. It is aimed at students, university graduates and university employees with an innovative business idea from the production and service sector. Scholarship holders receive a monthly payment of 2,500 euros over a year. There is also the option of receiving additional material and funding for business coaching. The ministry also offers more extensive funding opportunities for different target groups and industries at.
  • Unemployed people who want to end their unemployment by taking the step into self-employment can, for example, contact the Federal Employment Agency Start-up grant apply for. This is based on the last unemployment benefit rate plus 300 euros and is granted for six months. It can then be extended for a further nine months. The start-up grant is, however, a discretionary performance; there is no legal entitlement to funding.

A list of many other state funding programs can be found here, especially Bavarian funding programs can be found here.

2. Cash injections through start-up competitions

One way to collect additional money for your business idea is to take part in start-up competitions. For example, Baystartup organizes the every year Munich business plan competition. In three phases, startups have the opportunity to present their business ideas to an interested audience of investors, experts and entrepreneurs. The competition is endowed with prize money of 48,500 euros.

The Bavarian State Ministry for Economic Affairs, Regional Development and Energy also worked with the ,Begin? Grant! ‘- competition a program up its sleeve that supports technology-oriented company start-ups in the field of digitization in the start-up phase. The funding amount for winners is a maximum of 36,000 euros.

But there are also many interesting competitions for founders across Germany, such as the 'German founder award', the 'Digital Innovations' start-up competition and the ,Breakthrough Award‘.

However, you should not base your financing strategy on this option, because you can never be sure that you will win the race in one of the competitions. Rather, you can push your startup further with a profit.

3. Venture capital

Startups with a scalable business model can look for venture capitalists. You can get an initial overview of the Munich investor network on our map and in this list. Venture capital companies not only support young companies with startup financing, but also offer important industry know-how and are a figurehead for startups. In return, however, they often demand a large percentage of the company shares and want to resell these shares later as profitably as possible.

  • Young high-tech companies can rely on government-sponsored funding High-Tech-Gründerfonds (HTGF) to hope. HTGF is Germany's largest early-stage investor and supports startups with venture capital.
  • Startups in the fields of industrial technologies, enterprise software / SaaS and mobility can apply for funding from the Entrepreneurship Venture Capital Partners (UVC Partners) apply. This early-stage venture capital company focuses on European tech startups with high-growth B2B business models. The investment amount per financing round is between EUR 500,000 and EUR 3 million and a total of EUR 12 million per startup.
  • Also Bavaria capital supports high-tech startups with equity capital from the seed phase to the growth phase. Depending on the stage at which the start-up is, Bayern Kapital makes large sums of money available.

The Munich Network - Network for Entrepreneurship & Innovation and the Federal Association of German Private Equity Companies (BVK) also list further information and the program. The Department of Labor and Economics of the City of Munich offers an overview especially for social entrepreneurs.

4. Startup funding from the crowd

But it is also possible to finance a startup with the help of the crowd. This includes the following models:

  • Crowdfunding: Donors do not receive any financial compensation, but a thank you for their financial support
  • Crowd donation: Donation-based financial support for humane, creative or social projects without consideration
  • Equity crowdfunding: Investors participate in the later success
  • Crowdlending: Loans with a fixed interest rate from private individuals, who in turn get their money back within an agreed period

The best-known platforms for crowd finance include Gofundme, Kickstarter, Indiegogo, Startnext, Steady as 99 sparks. You can find an overview with tips, network information and funding opportunities in Munich for crowdfunding here. The startup unit of the IHK Munich and Upper Bavaria has also compiled additional information on planning a crowdfunding campaign.

5. Bank loans and promotional loans

Of course, you can also finance your company with the help of a loan. However, it is often difficult to get a normal bank loan for a startup idea without being able to offer the bank collateral. In such a case, the Guarantee bank Bavaria step in. Also, state credit institutions like the LfA Förderbank Bayern or the KfW (Reconstruction Loan Corporation) Loans for founders. KfW has the following options ready:

However, this type of loan can also be applied for through the house bank. A discussion with the LfA in advance can be helpful.

6. Accelerators and Incubators

Most accelerator and incubator programs mainly support young companies with the necessary infrastructure and coaching, but some programs also help startups financially. There are also start-up programs in the Munich ecosystem that help with the startup financing of a new business idea, including the Prosiebensat.1 Accelerator, the ESA Business Incubation Center (BIC) Bavaria, Nutrion and Wayra.

7. Business angels

Business angels are mostly successful company founders who support startups with their equity, their experience and their industry know-how. In Germany there are several business angel associations where you can look for a suitable investor, including the Business Angel Network Germany and the Baystartup Business Angel Network.

StartupFinancing: Advice centers and information pages

If you have further questions about startup financing, you can always contact one of the following advice centers. The Chamber of Commerce and Industry, for example, answers the first questions in this leaflet, and with its Startup Unit A detailed startup consultation, which, in addition to the question of financing, also includes the topics of business plan, formalities, legal matters, internationalization and networking. Innovative technology-oriented startups can also be found at the IHK innovation advice a suitable contact person. Here you can discuss the possibilities of state research and development funding as well as equity financing.

But Baystartup also helps startups to find a suitable financing option. As part of the so-called Startup finance coaching you can get support in developing a financing strategy and drawing up a pitch deck as well as a business and financial plan. As soon as you are optimally positioned with your documents for the investor pitch, the Baystartup experts will check whether you can be introduced to the Baystartup investor network - with over 300 business angels, 100 VCs and over 60 million euros brokered capital last year .

In addition, the Funding database a good search function for suitable financing options. Here you can filter by funding area and funding type.

By the way, you can find advice on founding on our start-up advice page.