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Financing the Venture

Financing the Venture

Only few entrepreneurs possess the necessary financial means to fund initial investments themselves. If you are dependent on external capital, inspire potential investors with your business idea and convince them of your concept’s sustainability. You should convey a sense of security to your banker or investor, showing that your business concept is properly thought through and the repayment of capital is secured. You will succeed in doing so, by providing a thoroughly written and viable business plan and engaging in accurate preparation. Solid financial planning is essential for your success.

Beside the traditional bank loan, there are other financial instruments:

- Public funding programmes

- Venture Capital (Private Equite) and Business Angels

Our advice for you:

When carrying out your financial planning, take into account that it often takes up to nine months to go from the planning stage over to funding requests and eventually receiving the actual payments.

Funding databases 

Funding databases provide comprehensive information about existing regional and national funding programmes that fit your business concept.

Public funding programmes

An attractive financial instrument for entrepreneurs is provided by public funding institutions. Loans from the KfW SME Bank and specific programmes offered by each federal state, are characterized by low interest rates, long maturities, initial grace periods and the possibility of indemnity. Generally, the principle banker concept will be utilized for you application. This means financial assistance from the public sector cannot be sought directly from the public funding institutions , but you will request and receive the money from a bank of your choice. Keep in mind that the loan application has to be placed before the start of your actual financing project. 

Equity & Business Angels 

Another option to finance small and medium sized private companies may be Venture capital (private equity). Unlike debt financing, you usually do not have to deposit any securities.  However, in return for taking over the financial risk of the investment, private equity firms get the right to participate in the debtor’s profits and to influence strategic and financial decisions. This involvement of the Venture Capitalist must not be underestimated.

Alongside their financial investment, Business Angels often act as a coach, in some cases even in the pre-founding phase. Through Business Angel networks, you can get in touch with potential investors.

Our advice for you:

While you can benefit from the professional experience, the financial expertise and networks of Venture capitalists, you should always keep in mind that these private investors expect high yields.

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  • University of Mannheim
  • Institut für Mittelstandsforschung
  • Gründerverbund
  • ESF
  • Europäische Union
  • Baden-Württemberg - Ministerium für Finanzen und Wirtschaft
  • Absolventum