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Here's a model that exists in Germany, which I like: You can present a business plan to the state's investment bank and apply for several financial aides, incl

Here's a model that exists in Germany, which I like: You can present a business plan to the state's investment bank and apply for several financial aides, including: * 1.5 years of universal basic income for you plus up to 2 other people. It's a tiny amount of money, but the point is to free you up to invest your actual time an money into the business. You do not have to pay this back. * up to 20k EUR in "consulting fees", for which the bank will contribute up to 50%. Again, you don't have to pay it back, but obviously you need money for them to match. * discounted loans, amount depends on business plan outlook I've worked with an accelerator that helps founders write the required pitches and plans for this program. And while the majority don't make it (because they mostly realize their idea won't actually hold up to business planning scrutiny), some do. And those don't become hyperscaling unicorns, they become normal companies, growing organically as stable, solvent employers in the region. Every once in a while a VC would stick its head in and encourage the startup to take on VC funding, and for an even smaller percentage (one in my time doing this), this worked. But for me, the organic growers are the best success story.

adamcharnock 2y ago
Do you have a link for any more information on this? This sounds interesting.
- summarity 2y ago
  I was working with the "ego." programs in particular: https://www.ib-sachsen-anhalt.de/gruender/gruenden-in-sachsen-anhalt/vor-der-gruendung https://www.ib-sachsen-anhalt.de/gruender/gruenden-in-sachse... This might be different from state to state. There are also EU grants you can apply for, which might contribute to employee salaries. Those are somewhat difficult to navigate and apply for, but sometimes worth it to bridge the salary gap between a "normal" German company and FANG.
- bryanhogan 2y ago
  Not sure which one the original comment is talking about, but look into "Gründerstipendium" / "EXIST Stipendium". Then there are also more scholarships based on other criteria, e.g. your state or if you are at an university, many universities also have some sort of entrepreneurial scholarship which will then also help you get the larger scholarships afterwards.
bryanhogan 2y ago
Are you talking about the "Gründerstipendium"?
- summarity 2y ago
  Yes, ego.-START: https://www.ib-sachsen-anhalt.de/gruender/neue-existenz-gruenden/ego-start-der-zuschuss-fuer-existenzgruender https://www.ib-sachsen-anhalt.de/gruender/neue-existenz-grue... (just of the programs)
  - bryanhogan 2y ago
    Maybe the ones I meant are for NRW (Nordrhein-Westfalen) only: - https://www.gründungsstipendium.nrw/ https://www.xn--grndungsstipendium-n6b.nrw/ - https://www.foerderdatenbank.de/FDB/Content/DE/Foerderprogramm/Bund/BMWi/exist-gruendungsstipendium.html https://www.foerderdatenbank.de/FDB/Content/DE/Foerderprogra...
  - kakoni 2y ago
    So Founder's scholarship: 2,000 euros per month for a period of max. 18 months? Wow, much better than I expected. How difficult is it to get this scholarship?
    - summarity 2y ago
      Not at all. Here's how you'd go about it: * for each medium to large University, there will usually be at least one person, if not an entire org of people that will guide you through the process, manage comms with the bank and help you to frame the business plan. These institutions (what I referred to as an "accelerator" in my OP) are publicly funded. You do not pay them. * prepare your business plan (milestones, market research, financial plan) - at this point you can also utilize other financial support (e.g. matched funds for market research) * you nominate a "mentor" - this is meant to be an independent expert that will serve as an informal advisor and secondary contact for the bank. There's no liability involved, and usually this is an industry expert, or professor, etc. * bank accepts the business plan and starts payments * during the scholarship, the bank will keep in touch with you and the mentor to check in on your business plan milestones. This is mostly an anti-fraud check. It's important to realize there's an alignment of incentives here: * you want to start a company and get financial support * the accelerator advanced its mission (get more startups going) * the bank advances its mission (create more value in the local region) * the business plan and milestones unlock ultra-low-interest follow-up financing if you need it, since the bank has already been involved for 18 months and knows the potential/liabilities of your business This all sounds like a lot, but I've seen founders go through the entire process in just a few weeks of planning. And much of the work, like business planning, is what you need to do anyway.
deleted 2y ago
[deleted]
fastball 2y ago
And yet Germany still doesn't seem to have much more startup / entrepreneurial success than any other European country. What gives?
- summarity 2y ago
  What are you looking for in particular? The model is geared towards slow, sustainable growth. And that growth might also not need to exceed a certain level. So you're unlikely to hear about many of them. Not all are in tech or software, many are focused on German-only (or DACH region) research, industrial development, etc. I think that's fine.
  - fastball 2y ago
    Presumably you'd want to see that such initiatives are increasing the number of sustainable businesses created, per capita. Is that the case? --- EDIT: Some quick searching indicates that the startup rate (per capita) in Germany is about 1.1%, while the USA is 1.5%. Not a huge difference, but the USA doesn't have any of those initiatives afaik. Just wondering what actually moves the needle and how to better create a society that is entrepreneurial, and not just in a "billion dollar social media unicorn" kinda way, but businesses that provide actual tangible value. Definitely recognize that the "quality" of businesses being started in Germany could be higher, but I think you actually need to measure these things and understand what interventions actually make a difference. It is a similar issue with UBI in general: while it sounds nice and might be necessary if our "AI is the future" overlords get their way, you do actually need to back up the promise of "UBI will unlock human creativity" with some amount of hard data, imo.
    - DarkWiiPlayer 2y ago
      > Some quick searching indicates that the startup rate (per capita) in Germany is about 1.1%, while the USA is 1.5%. Not a huge difference, but the USA doesn't have any of those initiatives afaik. I believe there's differences between east and west Germany, so if you look at the west specifically, the gamp might get a little bit smaller. Beyond that, Germany doesn't have as much of a startup culture as the USA, which is precisely why we need to incentivise people in a way that others don't. > Just wondering what actually moves the needle and how to better create a society that is entrepreneurial Willingness and awareness, where the latter is probably easy to fix but the former is a bit trickier: You need those people who have the ability to pull it off to want it in the first place. And there I guess it splits into a) the benefits of entreprenaurship b) the benefits of employment and c) the cultural influence on how these are weighed against each other. So tl;dr: a) make starting a company attractive, b) make employment suck more and c) convince people that independence beats security. Employment in Germany is definitely a lot cozier than in the US, so unless we want to get rid of that, a) and c) are the options we have. If you want to achieve it without propaganda, then all you can really do is a), and that's what these programmes are already doing. I think reducing buerocracy and offering good social safety nets so a failing business doesn't translate to a ruined life are the way to go, at least in the short term.
muzani 2y ago
These things do work and created a few unicorns here in Malaysia. The catch is that they're usually very bureaucratic as it's public funds, and the more corruption, the more rules there are. Someone might say, come in from New Zealand to get a grant, then the condition becomes "must be 51% locally owned". A conglomerate creates a sister company to get the grant and then it becomes, "parent company must be less than 3 years old and have under $500k revenue". The rules just keep stacking on until agile is basically banned lol Companies funded this way were actually one of my income sources when I was freelancing, but sadly most don't continue on unless there's a Series B later on.
- amazingamazing 2y ago
  > These things do work and created a few unicorns here in Malaysia. Which ones?
  - nradov 2y ago
    Carsome and Aerodyne?
    - muzani 2y ago
      I was thinking Grab, back when they were called MyTeksi. Honestly the reason I don't answer these questions is that it's just so hard to dig up this info. It feels like genealogy, which is fine for curiosity, but I can't tell which of these questions are just being contentious. Best I can get this this link from 7 years ago: https://vulcanpost.com/624177/malaysia-memorable-startup-funded-by-cradle/ https://vulcanpost.com/624177/malaysia-memorable-startup-fun... And it was about their investments from ~17 years ago. These things are slow.
nottorp 2y ago
You still need the 25k to register a LLC or whatever the acronym is in Germany, right?
- summarity 2y ago
  No that's for a full GmbH. You can start with an "UG", which realistically needs maybe 1500 EUR to get registered and up and running. Then, a certain percentage of the profit is contributed towards the 25k (of which in turn only 12.5k have to be deposited in cash) each financial year. If the threshold is met, you can convert from UG to GmbH.
  - zwnow 2y ago
    Always go for GmbH. UG will make you account for everything with your private money. If something goes wrong in your business you'll be dirt poor.
    - x2rj 2y ago
      You are confusing UG with something like GbR. UG is basically a baby GmbH with constraints of the name of the company and how much money the associates can extract from it (until the company got 25k€ captial and can become a normal GmbH).
    - dividuum 2y ago
      That doesn't sound correct. UG is identical to the GmbH in that regard. Do you mean a GbR?
      - zwnow 2y ago
        Ahh might have confused it with one of the other forms then... It's been a while since I had to learn all that stuff.
    - openplatypus 2y ago
      Only up to 25k. UG allows you to incorporate for 1eur (600eur with accountant, notary, etc) and you are liable only up to level of full GmbH which is 25k.
mentalgear 2y ago
Good to see startup strategies which help build stable, solid middle-sized companies. Germany has a great success story by the name of the "Mittelstand" (SME businesses), which means a big part if the market are small to middle enterprises. This is far more consumer-friendly and innovative, as more competitive as it's not relying on a few big players like in the US that might also collude with each other.
- earthnail 2y ago
  Small business owner here. Only works if you can carve out a niche. Lots of software areas have clear scaling benefits and then you just can’t compete as a small company. That’s why MS Office continues to dominate after decades.
marcinzm 2y ago
That just sounds like traditional small businesses. Which is cool but re-branding them to "startup" seems silly. The US has 35 million small businesses and maybe 1 million would qualify as startups.
- flir 2y ago
  You said this below, too. What's the difference? In my mind a startup is just a newly established business, but you seem to have a different vision?
  - marcinzm 2y ago
    Startups aim to grow quickly. Every single definition highlights that difference versus traditional small businesses. Trying to re-brand small businesses into "startups" for the cool name factor just seems silly to me. If you're making a sustainable small business then call it that. Don't call it a startup. You'll get more customers that way as well and more relevant business contacts. People care about startups because of the high growth rate. Renaming a small business to a startup achieves as much as slapping a porsche logo onto a honda civic. The civic is a solid car but you won't make people'd heads turn with that logo on it or not.
    - javierluraschi 2y ago
      From your point of view, when does a startup is no longer a startup? Seed, Series A, B, C, pre-IPO? Can you be a startup after IPO?
      - marcinzm 2y ago
        That's another reason I find the re-naming of small business to startup so silly. Putting a billion dollar company and a family small business on the same label is silly just because were started recently. Some startups are worth billions the second they are created. Personally I think startups generally stop being called startups when they get old enough or go public. Then they get other labels such as a private company or a public company. The point of labels is to quickly give a lot of relevant information about some entity. This helps customers, investors, clients, future employees and so on understand the entity quickly.
zwnow 2y ago
It's also connected to so much bureaucracy that you almost need to hire someone for that alone, because you wont have as much time for your actual business. Founding a company in Germany is so much unnecessary paperwork its crazy. Single handedly the only reason I will never try it in my home country.
- i_am_a_peasant 2y ago
  Some still do it. And while I would never start my own company in Germany. Working at a startup in Germnay is going pretty well for me so far. 1.5 years in.
  - zwnow 2y ago
    Ye been working in a startup as well. I just witness all the appointments my boss has to go through and I could never do that. But I'm also the type of person not picking up their phone when it rings.
- flessner 2y ago
  Actually just founding the company is the easy part nowadays. You can do it online or let a notary work it out for you. It's just everything else that's dreadful.
  - earthnail 2y ago
    Small German business owner here. I still find the notary egregious. But yeah, the admin afterwards is facepalming. Had a startup in the UK before; that was a walk in the park in comparison.
- martin_a 2y ago
  Not true. Go to your hometown administration, pay 35 Euro and leave 15 minutes later with a "Gewerbeanmeldung" which enables you to start doing business right away.
  - greenavocado 2y ago
kakoni 2y ago
So KFW (state investment bank?) has a thing called StartGeld (startup loan). I've wondered about few practicalities 1) What sort of collateral does bank expect from you? 2) Can you really get 125ke or more like 10-20ke? 3) Interest rate is a single digit number? 4) Can you really get 10 year payback periods? Reason why I'm asking is that in Finland(where I live) these startgeld terms seem like a dream come true for entrepreneur. To give you an example; 1) Tradiotional bank wants collateral for the loan. For a 5k€ loan, 5k€ in deposits are needed. 2) There a lots of Swedish/Norwegian "loan-houses" advertising their services for companies, with interest rates are somewhere between 23-30% per annum.
skeeter2020 2y ago
Parts of this feel a lot like Canada's SRED program, which is intended to be a subsidy for technology research but the expected bureacracy has spawned an industry of consultancies that work solely to find marginal & questionable activities within companies that qualify. It can be worth it for a company to jump through the hoops - especially if they get something while another company does all the work - but it's an incredibly inefficient way to grow tech businesses.
- morkalork 2y ago
  SRED and other grants/tax rebates is lifeblood for small tech companies here. Also, you know you're a senior dev when you make the yearly pilgrimage to meet with SRED consultants with architecture diagrams in hand!
  - nickff 2y ago
    SRED is a waste of time for companies actually doing R&D, and a profit center for consultancies getting 50% of a pizza joint's write-off of a ski-doo.
coretx 2y ago
Only applies to people with a degree. Institutionalised nepotism. Just like how your chamber of commerce keeps out the competition. Typical western decay/corruption. Closing the ranks and drawing in other peoples money.
openplatypus 2y ago
Which land? Last time I checked and looked for different support scheme all that was offered in Berlin was some 90s style support for office equipment (we are fully remote) support or 1/2 salary on an intern. Truly pathetic back in the early 2024.
- summarity 2y ago
  SA, links are below. Berlin has different programs. An equivalent scholarship is available through ESF+ funds: https://www.foerderdatenbank.de/FDB/Content/DE/Foerderprogramm/Land/Berlin/berliner-startup-stipendium.html https://www.foerderdatenbank.de/FDB/Content/DE/Foerderprogra... I've also been part of HTGF and bmp funded startups in Berlin, and those two are the most active players in seed funding, if more traditional capital-for-equity is what you're looking for. Both are also experienced with augmenting their investment with EU and state (IBB) funds.
nullderef 2y ago
How can I learn more about this? Is it the EXIST program? I looked into programs like this but they seemed to require so much bureaucracy that I'd be better off without them :(
- summarity 2y ago
  I posted a bunch of links further downthread. There are also likely non-profit/public institution in your state that will help you navigate this. Of course they can't write the business plan for you :)
gf000 2y ago
Can non-German citizens apply (citizen of another EU-country, though)? I am planning to move to another EU country and Germany is one strong contender, and this would make it even better.
- summarity 2y ago
  Not for these specifically, but most of them are funded by EU grants. The current ESF funding period runs until 2027, so you'd need to research which pathways to funding exist in your country and how to apply.
fwip 2y ago
Nitpick - if you need to apply and it comes with conditions, it's not UBI. Perhaps a better word would be stipend?
thelock85 2y ago
This is somewhat akin to the U.S. government's SBIR grant program. Phase I (generally $250-500K for a year)to develop and pilot novel tech. Phase II ($1M) to develop scalable tech. And Phase III to go-to-market. (I'm being intentionally brief here as there is a lot of variability between participating agencies). Because each award solicitation is closely aligned to the industry needs associated with a given agency (DoD, DHS, HHS, NSF, DoEd, DoEnergy, DoCommerce, USDA, EPA, DoT, NASA), you are on a fast-track if you can get into Phase I. It's a ton of paperwork and bureaucracy --probably even more so under current administration-- but still a great alternative/addition to VC that doesn't take equity and forces you into technical clarity.
joelfried 2y ago
That sounds amazing! As a founder I'd be over the moon for it.
cmgriffing 2y ago
I would love to know of some of the companies you know of that have gone this route. Maybe nothing we've heard of, but still sounds interesting.
cryptonector 2y ago
> state's investment bank Eww, no.
weitendorf 2y ago
I would love to see the actual long term statistics for this program and others like it, because from the outside looking in, it seems to produce a lot of zombie companies and companies that are wholly structured around financing themselves through more grants and other public programs. The incentives are just bad all around. The “LP”s are lawmakers and politicians, but in the best case only insofar as the program is popular or contributed to economic good vibes that keep them in office and lawn. The "GP"s are bureaucrats with no skin in the game except for avoiding fraud and impropriety and keeping their management chain happy (ultimately reporting to politicians who can also have worst case incentives of directory the money towards, ahem, personally expedient things). Then on the other side, clearly it is such a bureaucratic program that regular entrepreneurs struggle to navigate it. The accelerator you mention is spending potential teaching/helping time towards the goal of building a sustainable business on figuring out how to get money from the program (normally accelerators GIVE you money) - presumably they are coinvesting or taking a cut somehow, which ultimately means they are basically getting paid to shuttle people through the program [0]. And founders are spending time they should spend building and validating their product, or fundraising from people with skin in the game (who care about the important things and not so much whether form 47b was stamped by a notary), on figuring out how to get a grant. In my opinion this kind of funding should be split between a much lower-bureaucracy and overhead public program (eg UBI) and the private sector. That makes the overhead for security “operational” startup expenses like housing/feeding the founders very very low, and directs “capital” startup expenses like buildings, equipment, and employees’ initial salaries more efficiently [1]. Or you can tax middle class workers less (you guys have really high payroll/VAT) and give them more control over their retirement money so it’s easier to build a solid amount of personal wealth to start a business. IMO there is a misconception with new founders in general, including me when first starting a company, that you should spend a lot of time fundraising and need to get a big check to get started [2]. Programs like this make it worse because you spend crucial time building the company and your skills as a founder on passing some well-defined hurdle like “get the big grant” or “get accepted into program X” - it is your first major task as a startup founder - only to then be faced with the fact that almost *no future company task will be that well-defined*, and the realization that *you spent a lot of time “buying more time” to get to profitability when you could have just worked on that to begin with*. [0] Unless you are a lawyer, in the US it's seen as corruption when private parties serve as paid facilitators and gatekeepers to public programs. [1] One of the reasons it's hard to start a mid-sized company is that "traditional" lenders only want you to borrow things like equipment and buildings that you can get almost all the value back from if you fail, VC only want you to spend money on things with the possibility of yielding huge returns, and PE just have better opportunities than taking a chance on Joe Schmo. So if you can reach ramen-profitability without VC and only need traditional loans to get started it should be much easier to start a medium sized company. [2] Obviously raising money can be essential or really beneficial, and it's a "founder task" but I think many people forget that it's not an end-unto-itself, but a way to get you from point A to point B. The only people who should truly see it as an end-unto-itself are people who just want to pay themselves and their friends with no intention of starting a sustainable business (that is also called fraud or scamming). Everybody else should just see it as a step on the path towards a sustainable business, and not a legitimizing mark/right of passage. Actually, if you take VC money on a convertible note to spend on stuff that you could have financed traditionally or didn't really need you are essentially giving away tons of upside with little change in downside.

adamcharnock 2y ago

Do you have a link for any more information on this? This sounds interesting.

summarity 2y ago
I was working with the "ego." programs in particular: https://www.ib-sachsen-anhalt.de/gruender/gruenden-in-sachsen-anhalt/vor-der-gruendung https://www.ib-sachsen-anhalt.de/gruender/gruenden-in-sachse... This might be different from state to state. There are also EU grants you can apply for, which might contribute to employee salaries. Those are somewhat difficult to navigate and apply for, but sometimes worth it to bridge the salary gap between a "normal" German company and FANG.
bryanhogan 2y ago
Not sure which one the original comment is talking about, but look into "Gründerstipendium" / "EXIST Stipendium". Then there are also more scholarships based on other criteria, e.g. your state or if you are at an university, many universities also have some sort of entrepreneurial scholarship which will then also help you get the larger scholarships afterwards.

bryanhogan 2y ago

Are you talking about the "Gründerstipendium"?

summarity 2y ago
Yes, ego.-START: https://www.ib-sachsen-anhalt.de/gruender/neue-existenz-gruenden/ego-start-der-zuschuss-fuer-existenzgruender https://www.ib-sachsen-anhalt.de/gruender/neue-existenz-grue... (just of the programs)
- bryanhogan 2y ago
  Maybe the ones I meant are for NRW (Nordrhein-Westfalen) only: - https://www.gründungsstipendium.nrw/ https://www.xn--grndungsstipendium-n6b.nrw/ - https://www.foerderdatenbank.de/FDB/Content/DE/Foerderprogramm/Bund/BMWi/exist-gruendungsstipendium.html https://www.foerderdatenbank.de/FDB/Content/DE/Foerderprogra...
- kakoni 2y ago
  So Founder's scholarship: 2,000 euros per month for a period of max. 18 months? Wow, much better than I expected. How difficult is it to get this scholarship?
  - summarity 2y ago
    Not at all. Here's how you'd go about it: * for each medium to large University, there will usually be at least one person, if not an entire org of people that will guide you through the process, manage comms with the bank and help you to frame the business plan. These institutions (what I referred to as an "accelerator" in my OP) are publicly funded. You do not pay them. * prepare your business plan (milestones, market research, financial plan) - at this point you can also utilize other financial support (e.g. matched funds for market research) * you nominate a "mentor" - this is meant to be an independent expert that will serve as an informal advisor and secondary contact for the bank. There's no liability involved, and usually this is an industry expert, or professor, etc. * bank accepts the business plan and starts payments * during the scholarship, the bank will keep in touch with you and the mentor to check in on your business plan milestones. This is mostly an anti-fraud check. It's important to realize there's an alignment of incentives here: * you want to start a company and get financial support * the accelerator advanced its mission (get more startups going) * the bank advances its mission (create more value in the local region) * the business plan and milestones unlock ultra-low-interest follow-up financing if you need it, since the bank has already been involved for 18 months and knows the potential/liabilities of your business This all sounds like a lot, but I've seen founders go through the entire process in just a few weeks of planning. And much of the work, like business planning, is what you need to do anyway.

deleted 2y ago

[deleted]

fastball 2y ago

And yet Germany still doesn't seem to have much more startup / entrepreneurial success than any other European country. What gives?

summarity 2y ago
What are you looking for in particular? The model is geared towards slow, sustainable growth. And that growth might also not need to exceed a certain level. So you're unlikely to hear about many of them. Not all are in tech or software, many are focused on German-only (or DACH region) research, industrial development, etc. I think that's fine.
- fastball 2y ago
  Presumably you'd want to see that such initiatives are increasing the number of sustainable businesses created, per capita. Is that the case? --- EDIT: Some quick searching indicates that the startup rate (per capita) in Germany is about 1.1%, while the USA is 1.5%. Not a huge difference, but the USA doesn't have any of those initiatives afaik. Just wondering what actually moves the needle and how to better create a society that is entrepreneurial, and not just in a "billion dollar social media unicorn" kinda way, but businesses that provide actual tangible value. Definitely recognize that the "quality" of businesses being started in Germany could be higher, but I think you actually need to measure these things and understand what interventions actually make a difference. It is a similar issue with UBI in general: while it sounds nice and might be necessary if our "AI is the future" overlords get their way, you do actually need to back up the promise of "UBI will unlock human creativity" with some amount of hard data, imo.
  - DarkWiiPlayer 2y ago
    > Some quick searching indicates that the startup rate (per capita) in Germany is about 1.1%, while the USA is 1.5%. Not a huge difference, but the USA doesn't have any of those initiatives afaik. I believe there's differences between east and west Germany, so if you look at the west specifically, the gamp might get a little bit smaller. Beyond that, Germany doesn't have as much of a startup culture as the USA, which is precisely why we need to incentivise people in a way that others don't. > Just wondering what actually moves the needle and how to better create a society that is entrepreneurial Willingness and awareness, where the latter is probably easy to fix but the former is a bit trickier: You need those people who have the ability to pull it off to want it in the first place. And there I guess it splits into a) the benefits of entreprenaurship b) the benefits of employment and c) the cultural influence on how these are weighed against each other. So tl;dr: a) make starting a company attractive, b) make employment suck more and c) convince people that independence beats security. Employment in Germany is definitely a lot cozier than in the US, so unless we want to get rid of that, a) and c) are the options we have. If you want to achieve it without propaganda, then all you can really do is a), and that's what these programmes are already doing. I think reducing buerocracy and offering good social safety nets so a failing business doesn't translate to a ruined life are the way to go, at least in the short term.

muzani 2y ago

These things do work and created a few unicorns here in Malaysia. The catch is that they're usually very bureaucratic as it's public funds, and the more corruption, the more rules there are. Someone might say, come in from New Zealand to get a grant, then the condition becomes "must be 51% locally owned". A conglomerate creates a sister company to get the grant and then it becomes, "parent company must be less than 3 years old and have under $500k revenue". The rules just keep stacking on until agile is basically banned lol Companies funded this way were actually one of my income sources when I was freelancing, but sadly most don't continue on unless there's a Series B later on.

amazingamazing 2y ago
> These things do work and created a few unicorns here in Malaysia. Which ones?
- nradov 2y ago
  Carsome and Aerodyne?
  - muzani 2y ago
    I was thinking Grab, back when they were called MyTeksi. Honestly the reason I don't answer these questions is that it's just so hard to dig up this info. It feels like genealogy, which is fine for curiosity, but I can't tell which of these questions are just being contentious. Best I can get this this link from 7 years ago: https://vulcanpost.com/624177/malaysia-memorable-startup-funded-by-cradle/ https://vulcanpost.com/624177/malaysia-memorable-startup-fun... And it was about their investments from ~17 years ago. These things are slow.

nottorp 2y ago

You still need the 25k to register a LLC or whatever the acronym is in Germany, right?

summarity 2y ago
No that's for a full GmbH. You can start with an "UG", which realistically needs maybe 1500 EUR to get registered and up and running. Then, a certain percentage of the profit is contributed towards the 25k (of which in turn only 12.5k have to be deposited in cash) each financial year. If the threshold is met, you can convert from UG to GmbH.
- zwnow 2y ago
  Always go for GmbH. UG will make you account for everything with your private money. If something goes wrong in your business you'll be dirt poor.
  - x2rj 2y ago
    You are confusing UG with something like GbR. UG is basically a baby GmbH with constraints of the name of the company and how much money the associates can extract from it (until the company got 25k€ captial and can become a normal GmbH).
  - dividuum 2y ago
    That doesn't sound correct. UG is identical to the GmbH in that regard. Do you mean a GbR?
    - zwnow 2y ago
      Ahh might have confused it with one of the other forms then... It's been a while since I had to learn all that stuff.
  - openplatypus 2y ago
    Only up to 25k. UG allows you to incorporate for 1eur (600eur with accountant, notary, etc) and you are liable only up to level of full GmbH which is 25k.

mentalgear 2y ago

Good to see startup strategies which help build stable, solid middle-sized companies. Germany has a great success story by the name of the "Mittelstand" (SME businesses), which means a big part if the market are small to middle enterprises. This is far more consumer-friendly and innovative, as more competitive as it's not relying on a few big players like in the US that might also collude with each other.

earthnail 2y ago
Small business owner here. Only works if you can carve out a niche. Lots of software areas have clear scaling benefits and then you just can’t compete as a small company. That’s why MS Office continues to dominate after decades.

marcinzm 2y ago

That just sounds like traditional small businesses. Which is cool but re-branding them to "startup" seems silly. The US has 35 million small businesses and maybe 1 million would qualify as startups.

flir 2y ago
You said this below, too. What's the difference? In my mind a startup is just a newly established business, but you seem to have a different vision?
- marcinzm 2y ago
  Startups aim to grow quickly. Every single definition highlights that difference versus traditional small businesses. Trying to re-brand small businesses into "startups" for the cool name factor just seems silly to me. If you're making a sustainable small business then call it that. Don't call it a startup. You'll get more customers that way as well and more relevant business contacts. People care about startups because of the high growth rate. Renaming a small business to a startup achieves as much as slapping a porsche logo onto a honda civic. The civic is a solid car but you won't make people'd heads turn with that logo on it or not.
  - javierluraschi 2y ago
    From your point of view, when does a startup is no longer a startup? Seed, Series A, B, C, pre-IPO? Can you be a startup after IPO?
    - marcinzm 2y ago
      That's another reason I find the re-naming of small business to startup so silly. Putting a billion dollar company and a family small business on the same label is silly just because were started recently. Some startups are worth billions the second they are created. Personally I think startups generally stop being called startups when they get old enough or go public. Then they get other labels such as a private company or a public company. The point of labels is to quickly give a lot of relevant information about some entity. This helps customers, investors, clients, future employees and so on understand the entity quickly.

zwnow 2y ago

It's also connected to so much bureaucracy that you almost need to hire someone for that alone, because you wont have as much time for your actual business. Founding a company in Germany is so much unnecessary paperwork its crazy. Single handedly the only reason I will never try it in my home country.

i_am_a_peasant 2y ago
Some still do it. And while I would never start my own company in Germany. Working at a startup in Germnay is going pretty well for me so far. 1.5 years in.
- zwnow 2y ago
  Ye been working in a startup as well. I just witness all the appointments my boss has to go through and I could never do that. But I'm also the type of person not picking up their phone when it rings.
flessner 2y ago
Actually just founding the company is the easy part nowadays. You can do it online or let a notary work it out for you. It's just everything else that's dreadful.
- earthnail 2y ago
  Small German business owner here. I still find the notary egregious. But yeah, the admin afterwards is facepalming. Had a startup in the UK before; that was a walk in the park in comparison.
martin_a 2y ago
Not true. Go to your hometown administration, pay 35 Euro and leave 15 minutes later with a "Gewerbeanmeldung" which enables you to start doing business right away.
- greenavocado 2y ago

kakoni 2y ago

So KFW (state investment bank?) has a thing called StartGeld (startup loan). I've wondered about few practicalities 1) What sort of collateral does bank expect from you? 2) Can you really get 125ke or more like 10-20ke? 3) Interest rate is a single digit number? 4) Can you really get 10 year payback periods? Reason why I'm asking is that in Finland(where I live) these startgeld terms seem like a dream come true for entrepreneur. To give you an example; 1) Tradiotional bank wants collateral for the loan. For a 5k€ loan, 5k€ in deposits are needed. 2) There a lots of Swedish/Norwegian "loan-houses" advertising their services for companies, with interest rates are somewhere between 23-30% per annum.

skeeter2020 2y ago

Parts of this feel a lot like Canada's SRED program, which is intended to be a subsidy for technology research but the expected bureacracy has spawned an industry of consultancies that work solely to find marginal & questionable activities within companies that qualify. It can be worth it for a company to jump through the hoops - especially if they get something while another company does all the work - but it's an incredibly inefficient way to grow tech businesses.

morkalork 2y ago
SRED and other grants/tax rebates is lifeblood for small tech companies here. Also, you know you're a senior dev when you make the yearly pilgrimage to meet with SRED consultants with architecture diagrams in hand!
- nickff 2y ago
  SRED is a waste of time for companies actually doing R&D, and a profit center for consultancies getting 50% of a pizza joint's write-off of a ski-doo.

coretx 2y ago

Only applies to people with a degree. Institutionalised nepotism. Just like how your chamber of commerce keeps out the competition. Typical western decay/corruption. Closing the ranks and drawing in other peoples money.

openplatypus 2y ago

Which land? Last time I checked and looked for different support scheme all that was offered in Berlin was some 90s style support for office equipment (we are fully remote) support or 1/2 salary on an intern. Truly pathetic back in the early 2024.

summarity 2y ago
SA, links are below. Berlin has different programs. An equivalent scholarship is available through ESF+ funds: https://www.foerderdatenbank.de/FDB/Content/DE/Foerderprogramm/Land/Berlin/berliner-startup-stipendium.html https://www.foerderdatenbank.de/FDB/Content/DE/Foerderprogra... I've also been part of HTGF and bmp funded startups in Berlin, and those two are the most active players in seed funding, if more traditional capital-for-equity is what you're looking for. Both are also experienced with augmenting their investment with EU and state (IBB) funds.

nullderef 2y ago

How can I learn more about this? Is it the EXIST program? I looked into programs like this but they seemed to require so much bureaucracy that I'd be better off without them :(

summarity 2y ago
I posted a bunch of links further downthread. There are also likely non-profit/public institution in your state that will help you navigate this. Of course they can't write the business plan for you :)

gf000 2y ago

Can non-German citizens apply (citizen of another EU-country, though)? I am planning to move to another EU country and Germany is one strong contender, and this would make it even better.

summarity 2y ago
Not for these specifically, but most of them are funded by EU grants. The current ESF funding period runs until 2027, so you'd need to research which pathways to funding exist in your country and how to apply.

fwip 2y ago

Nitpick - if you need to apply and it comes with conditions, it's not UBI. Perhaps a better word would be stipend?

thelock85 2y ago

This is somewhat akin to the U.S. government's SBIR grant program. Phase I (generally $250-500K for a year)to develop and pilot novel tech. Phase II ($1M) to develop scalable tech. And Phase III to go-to-market. (I'm being intentionally brief here as there is a lot of variability between participating agencies). Because each award solicitation is closely aligned to the industry needs associated with a given agency (DoD, DHS, HHS, NSF, DoEd, DoEnergy, DoCommerce, USDA, EPA, DoT, NASA), you are on a fast-track if you can get into Phase I. It's a ton of paperwork and bureaucracy --probably even more so under current administration-- but still a great alternative/addition to VC that doesn't take equity and forces you into technical clarity.

joelfried 2y ago

That sounds amazing! As a founder I'd be over the moon for it.

cmgriffing 2y ago

I would love to know of some of the companies you know of that have gone this route. Maybe nothing we've heard of, but still sounds interesting.

cryptonector 2y ago

> state's investment bank Eww, no.

weitendorf 2y ago

I would love to see the actual long term statistics for this program and others like it, because from the outside looking in, it seems to produce a lot of zombie companies and companies that are wholly structured around financing themselves through more grants and other public programs. The incentives are just bad all around. The “LP”s are lawmakers and politicians, but in the best case only insofar as the program is popular or contributed to economic good vibes that keep them in office and lawn. The "GP"s are bureaucrats with no skin in the game except for avoiding fraud and impropriety and keeping their management chain happy (ultimately reporting to politicians who can also have worst case incentives of directory the money towards, ahem, personally expedient things). Then on the other side, clearly it is such a bureaucratic program that regular entrepreneurs struggle to navigate it. The accelerator you mention is spending potential teaching/helping time towards the goal of building a sustainable business on figuring out how to get money from the program (normally accelerators GIVE you money) - presumably they are coinvesting or taking a cut somehow, which ultimately means they are basically getting paid to shuttle people through the program [0]. And founders are spending time they should spend building and validating their product, or fundraising from people with skin in the game (who care about the important things and not so much whether form 47b was stamped by a notary), on figuring out how to get a grant. In my opinion this kind of funding should be split between a much lower-bureaucracy and overhead public program (eg UBI) and the private sector. That makes the overhead for security “operational” startup expenses like housing/feeding the founders very very low, and directs “capital” startup expenses like buildings, equipment, and employees’ initial salaries more efficiently [1]. Or you can tax middle class workers less (you guys have really high payroll/VAT) and give them more control over their retirement money so it’s easier to build a solid amount of personal wealth to start a business. IMO there is a misconception with new founders in general, including me when first starting a company, that you should spend a lot of time fundraising and need to get a big check to get started [2]. Programs like this make it worse because you spend crucial time building the company and your skills as a founder on passing some well-defined hurdle like “get the big grant” or “get accepted into program X” - it is your first major task as a startup founder - only to then be faced with the fact that almost *no future company task will be that well-defined*, and the realization that *you spent a lot of time “buying more time” to get to profitability when you could have just worked on that to begin with*. [0] Unless you are a lawyer, in the US it's seen as corruption when private parties serve as paid facilitators and gatekeepers to public programs. [1] One of the reasons it's hard to start a mid-sized company is that "traditional" lenders only want you to borrow things like equipment and buildings that you can get almost all the value back from if you fail, VC only want you to spend money on things with the possibility of yielding huge returns, and PE just have better opportunities than taking a chance on Joe Schmo. So if you can reach ramen-profitability without VC and only need traditional loans to get started it should be much easier to start a medium sized company. [2] Obviously raising money can be essential or really beneficial, and it's a "founder task" but I think many people forget that it's not an end-unto-itself, but a way to get you from point A to point B. The only people who should truly see it as an end-unto-itself are people who just want to pay themselves and their friends with no intention of starting a sustainable business (that is also called fraud or scamming). Everybody else should just see it as a step on the path towards a sustainable business, and not a legitimizing mark/right of passage. Actually, if you take VC money on a convertible note to spend on stuff that you could have financed traditionally or didn't really need you are essentially giving away tons of upside with little change in downside.