Not exactly good news for young startups and investors for the new year. As the current funding guideline expired on December 31, 2022 and completion of the announced new version is delayed, it is currently not possible to apply for the INVEST Venture Capital Funding Program.
The INVEST website of the responsible Federal Office for Economic Affairs and Export Control (BAFA) recommends business angels to refrain from investing for the time being if they want to keep the funding opportunity open. So far, business angels have received a tax-free refund of 20 percent of the investment sum for venture capital investments of €25,000 or more.
The federal government originally announced in the coalition agreement that it would continue the program, which has now been postponed indefinitely. “The INVEST program has been making an important contribution to facilitating access to venture capital for very young startups in Germany for almost ten years. Especially in the current difficult economic situation, more startups need money and know-how from business angels,” says Bitkom President Achim Berg. “Startups need planning security. The current funding gap must be replenished as quickly as possible and a new funding guideline should be put in place”.
According to Bitkom, the new funding guideline is also expected to reverse changes made last spring, such as removing follow-up funding from funding and capping initial funding. Furthermore, subsidies are not expected to be recovered if the start-up merges with another company before the end of the three-year period without the investor receiving any proceeds from the sale. Berg: “Access to venture capital has been one of the biggest location disadvantages for German startups for years. Funding programs should therefore be designed in such a way as to create as few new barriers as possible.”