Start-Up Fund Will Complement the Financing Ecosystem Where It Is Most Needed

Comment

ZEW Economist Georg Licht on Start-Up Support

In its meeting yesterday, the German Bundestag’s Budget Committee approved a fund to promote start-ups. Dr. Georg Licht, head of the ZEW Research Department “Economics of Innovation and Industrial Dynamics” at ZEW Mannheim, comments on this matter.

“Patience pays off. One year after its announcement, the Budget Committee has cleared the way for the so-called ‘Zukunftsfonds’, a start-up fund that will complement the financing ecosystem for technological start-ups in Germany where it is most needed. Via KfW Capital, a 10-billion-euro fund is to be set up to enable young companies to take the final step towards market entry.

The fund fits perfectly into the current financing landscape. The venture capital market in Germany has so far proved very robust in the face of the crisis. BioNTech and CureVac are currently on everyone’s lips and can serve as positive examples of how VC and business angels can help overcome a long dry spell until market success is achieved. On top of this, the fund will bring investors high profits and increase the attractiveness of Germany as a business location.”