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Venture capital and business angels: a range of funding options for businesses in North Rhine-Westphalia
Financial resources are one of the things innovative entrepreneurs need to make their ideas a reality. And venture capital investments in North Rhine-Westphalia start-ups are set to keep growing into 2022.
Technology and knowledge-based start-ups often need more capital in the start and growth phase. Alongside traditional loan financing, acquiring additional equity is an important factor for the success of these companies. Venture capital investments like this often provide access to investors’ network and know-how as well as the financing itself. The federal state aims to strengthen North Rhine-Westphalia’s status as a hotspot for venture capital and thereby a top location for technology and science start-ups.
The federal state already offers a range of financing options for start-ups and new businesses. With NRW.BANK, North Rhine-Westphalia has by far the most active state funding institute in Germany and provides a wide range of start-up and growth financing measures.
The state’s equity options in detail:
NRW.Venture enables young, fast-growing businesses in North Rhine-Westphalia to get up and running. On the website specially dedicated to start-ups you will find information and offers of support for innovative and often tech-oriented businesses that cannot self-finance through loans. Up to ten million euros of equity is invested per start-up over the course of several rounds of funding. This takes place in conjunction with private sector investors. In addition to financial support, the team at NRW.Venture and other investors also bring their expertise and network.
NRW.BANK win Business Angels Initiative
The win Business Angels Initiative of NRW.BANK (information in German only) brings business angels and innovative growth companies together to make private investments in promising start-ups.
The NRW.SeedCap programme (information in German only) doubles venture capital provided by business angels or private seed investors. NRW.BANK contributes between 100,000 and 500,000 euros to the financing and for climate and environmental technology companies up to a maximum of 750,000 euros (in several financing steps).
Regional start-up funds
Venture capital engagement at the regional level is also important. Venture capital funds such as the Gründerfonds Ruhr, Neoteq ventures Rheinland or the Aachener Tech Vision Fonds I offer a wide range of financing solutions. With a capital endowment of 30 to 40 million euros each, they set important trends in their region. In addition to providing equity capital, the regional funds provide strategic knowledge and an extensive network that brings together business angels, venture capital investors and entrepreneurs.
And the latest fund is:
After Corona assistance programme NRW.Start-up akut: New convertible loan NRW.SeedCon launched for young companies
In order to support young, innovative companies in North Rhine-Westphalia even more than before, NRW.BANK today launched a new convertible loan: NRW.SeedCon. NRW.BANK's new convertible loan provides companies that are no more than three years old with between EUR 50,000 and EUR 200,000. Interest and principal payments are due at the end of the term.
The advantage: During the seven-year term of the loan, the companies are not burdened with interest and redemption payments. The convertible loans granted through NRW.SeedCon are subordinated and the borrower does not have to provide collateral.
Alongside the support offered by the federal state, North Rhine-Westphalia’s start-ups can access nationwide support too:
High-Tech Gründerfonds and Coparion
The two national venture capital funds High-Tech Gründerfonds and Coparion are based in North Rhine-Westphalia. Numerous private venture capital companies which can also be found on our start-up state map of North Rhine-Westphalia also provide support.
Business Angels Netzwerk Deutschland (German Business Angels Network)
The Business Angels Netzwerk Deutschland (German Business Angels Network) is a group of experts who can offer new forms of financing as well as classic venture capital funds to start-up founders.
INVEST – venture capital subsidy
The INVEST – venture capital subsidy is a scheme run by the German Ministry for Economic Affairs and Climate Action which bolsters investments by private investors, particularly business angels, in young innovative businesses. New funding conditions have been in effect since February 2023: Up to 25 percent of the investment amount is supported with a purchase subsidy. In addition, the minimum investment amount was reduced to 10,000 euros. Further details on the BMWK website (info in German)