INVEST – Zuschuss für Wagniskapital (BAFA)

What they fund

• Programme Identity — The entity is the "Gemeinschaftsaufgabe INVEST – Zuschuss für Wagniskapital" (Joint Task "Investment" – Grant for Venture Capital), a specific funding menu item under the Federal Office for Economic Affairs and Export Control (BAFA) within the "Beratung & Finanzierung" (Advisory & Financing) category.
• Geographic Focus — The program is administered by a German federal authority (BAFA), indicating a focus on the German market.
• Portfolio Count — The entity has a recorded portfolio count of 1.
• Active Fund Status — The active status of the fund is unknown.
• Investment Scope — Specific details regarding the investment stages, sectors, or company types funded by this program are unknown.

Investment thesis

INVEST – Zuschuss für Wagniskapital exists to mobilise private venture capital for young, innovative German start-ups by subsidising private investors (Business Angels) who acquire equity stakes in these companies.

• Targeting the funding gap: Start-ups frequently fail in the early phase due to a lack of venture capital; the programme bridges this by reducing the financial risk for private investors.
• Subsidy mechanism: Private investors receive a 15% rebate on the issue price of the shares they acquire, paid out only after the shares have been taken over.
• Minimum investment threshold: Investors must commit at least €10,000 to the start-up; if payments are tied to milestones, each individual tranche must also meet the €10,000 minimum.
• Lock-up period: The acquired shares must be held for a minimum of three years, ensuring long-term commitment to the start-up's development.
• Eligibility certification: Start-ups must first be certified as eligible for INVEST during the application process before private investors can proceed with their investment.

Credibility: The programme has been running since May 2013 under the Federal Ministry for Economic Affairs and Energy, with updated criteria for market-standard clauses effective from 01.05.2025.

Interconnection: The 15% subsidy directly incentivises the private investor, while the three-year holding period constrains the start-up's early liquidity and exit options.

Value add

• Risk Mitigation: The 15% subsidy reduces the financial risk for private investors, encouraging more venture capital deployment.
• Market Signalling: BAFA certification signals the start-up's innovative potential to the private investment community.
• Network Effects: The programme facilitates connections between start-ups and private investors, expanding the start-up's funding network.
• Fit verdict: Highly suitable for early-stage, innovative German start-ups seeking private equity investment with reduced risk for investors.
• Founder diligence script:

1. Is my start-up innovative and young enough to qualify for BAFA certification? 2. Have I identified private investors who are willing to commit at least €10,000 and hold the shares for three years? 3. Am I prepared to navigate the BAFA application process and provide the necessary documentation for eligibility certification? 4. How does the 15% subsidy impact my valuation and equity dilution? 5. What are the specific market-standard clauses that need to be evaluated under the updated guidelines?

Portfolio focus

• Young, Innovative Start-ups: The programme targets companies with innovative potential, often in technology or high-growth sectors.
• Private Investment Focus: The portfolio consists of start-ups that have attracted private equity from Business Angels, leveraging the subsidy to enhance funding availability.
• German Market: All funded start-ups are based in Germany, reflecting the programme's geographic focus.
• Long-term Commitment: The three-year holding period ensures that the portfolio companies receive sustained support from their investors.

Interconnection: The portfolio reflects the programme's goal of mobilising private venture capital for innovative German start-ups, with a focus on long-term growth.