Tailor-cut financial solutions for every business idea
Turning a good idea into reality is rarely possible without money. Science start-ups in particular often require high investments in research and development. There are various ways to finance a start-up. Special forms of financing are available for knowledge-based start-ups, and there is also an appropriate instrument for every other idea. We help you find a suitable financing model for your start-up project.
Whether it’s a cash injection from the state, money from the bank or equity capital:
This section gives you an overview of the different forms of financing and what they entail.
Bootstrapping: tightening the belt
Effort: high / Focus: start-ups that can be implemented quickly / Financial risk: very low
Bootstrapping is one of the most common forms of financing for start-ups that can enter the market quickly and want to maintain as much independence as possible. The principle is: avoiding expenses while maximising revenues. Company growth is generated entirely from sales. However, you have to plan very carefully for this, because the time until the company is self-sustaining is limited.
Bootstrapping is easier if you don’t have to make a living from your start-up and you already have a large support network. You learn how to reduce your business to the essentials and manage it effectively. In order to take your business to another level, you can certainly add equity or debt capital at a later point; the revenues you have already generated by then will certainly impress potential financiers.
Would you like to find out more about bootstrapping or get more specific advice? Well-connected and with relevant experience:
+49 (0)234 32-22964
Funding programmes: start-up funding upon application
Effort: high to very high / Focus: knowledge-based start-up / Financial risk: low
It is possible to finance even longer development and research phases if you are eligible for a funding programme. There are many state-funded programmes for university start-ups. The requirements vary, and not every programme is suitable for your own start-up project. All funding programmes are linked to some form of application that proves the scientific innovation and includes a business plan. The application must always be submitted via the university; furthermore, the project must not have started or the team must not have founded the business yet.
Information on the most common funding programmes for innovative university founders is available here:
12-month grant for a team of up to three + material costs More information
- EXIST Transfer of Research: :
18-month funding for a team of four for a start-up idea with high development requirements More information
- Start-up Transfer.NRW:
NRW funding programme, 18-24 months duration, max. € 320,000 grant funding for personnel and material costs More information
- Human-Technology Interaction:
Innovative start-ups for human-technology interaction, BMBF funding before or after funding More information
- Enabling start-up – quantum technologies and photonics:
BMBF funding to support start-ups in quantum technologies and photonics More information
- StartUpSecure – The initiative for start-ups in IT security:
Funding in two phases, closely supported at RUB by Cube5 More information
If you are not ready yet, but are still working out your idea: The Proof-it funding programme provides support for student teams directly from the WORLDFACTORY Start-up Center: up to €2,000 in material and travel expenses for the further development of your start-up project!
Would you like to find out more about the individual programmes or get more specific advice? Get in touch with our expert for funding programmes:
+49 (0)234 32-29538
Equity: Investing in your innovation
Effort: high / Focus: scalable start-ups / Financial risk: low
Equity capital includes all forms of financing, usually described as “investments”: This starts with your own capital, which you may bring into the company, and ranges from small “business angel investments” to large financing rounds from “family offices” or “venture capital funds” (see below for explanations of terms). The most important factors are the current stage of your start-up, the results you have already achieved and the (financial) potential of your start-up. This is what you need for any form of equity capital: a convincing, well-structured and comprehensible pitch deck with a performance that fits the bill. Basically, equity is the classic form of financing for start-ups, because the clear advantage is that you are not gambling with your own money.
The two most common forms of equity:
- Business Angels usually fund the riskiest phase of a start-up: the pre-seed or seed stages. Here, you have already developed a product or service to market maturity and have your first clients. In the best case, you have already passed the proof-of-concept, i.e. the business model is feasible and there is market potential. Business angels set widely differing conditions and assess risks differently, because they are primarily motivated by their personal interest in the team in which they are investing. This has the advantage that with a business angel you not only bring money into the company, but also know-how. In the best case, you look for an angel who either covers competencies you lack or simply has knowledge of or contacts in your target industry. The rule here is: a lot goes a long way. Go to start-up events, pitch where you can, and build contacts in your target industry! You can also contact well-known business angel networks such as the Business Angels Netzwerk Deutschland with its regional networks.Business Angels Netzwerk Deutschland
Tip: With “SeedCap”, NRW.Bank offers a programme that mirrors business angel investments of up to three angels at the same conditions – and up to € 200,000! It can also be used in combination with the “Invest – Subsidy for Venture Capital” programme of the Federal Ministry for Economic Affairs and Energy, which guarantees the angels 20 per cent of their investment.
- Venture-Capital investors who invest in venture capital, – or family offices – companies that manage the assets of an owner family – risk a lot when they give money to a young start-up: they sometimes start in the seed phase, but mainly support the growth phases (series A or B). This means that you can attract a venture capitalist (VC) only if your start-up has the potential for a lot of turnover – preferably in a short time and with as little investment as possible. It is therefore important that you focus on the scalability of your idea and not try to impress the VC with five customers. Disruptive or so-called deep-tech topics sometimes have the potential to attract VCs even if the scalability has been shown but not yet proven. A VC provides a lot of money and often also strategic know-how to realise the full growth potential of your idea. These investments usually start at €500,000 and have hardly any upper limit. Many founders therefore fear for their autonomy. We are happy to advise you on what you’ll have to bear in mind when considering investments from VCs or family offices. When looking for suitable venture capital funds or family offices, a strategic approach is recommended: first define requirements, price and strategy, and then approach exactly those fund providers who fit the bill. If you are interested in this form of equity, please contact us. The WORLDFACTORY cooperates with various VCs; we will be happy to advise you and can carry out an assessment in advance together with NRW.Bank.
Tip: Techstars created a fairly extensive list of all European investors a few years ago. Not all entries are still up to date, but the list still provides an excellent overview.
Would you like to find out more about the equity or get more specific advice? Well-connected and with relevant experience:
+49 (0)234 32-22964
Debt capital: creditworthy or not?
Effort: moderate / Focus: Start-ups with manageable risk and financial requirements / Financial risk: very high
Debt capital refers to all forms of money that must be repaid at some point, i.e. loans and credits of all kinds. Basically, it is of secondary concern to the company whether you borrow money from your grandmother, the KfW or Sparkasse Witten; what matters with outside capital are the specific conditions: What can you spend the money on? When and how do you have to pay back how much? In addition to the term of the loan and the interest rates, the question of who bears the default risk is important. For start-ups, this is usually the shareholders.
As a start-up, you have two problems from the bank’s point of view: You have no company history from which the entrepreneurial risk can be deduced, and as a founder you are in most cases moderately creditworthy. Consequently, debt capital is more suitable for start-ups that pursue established business models (for example, classic start-ups) or have manageable investment sums. Mixed forms of debt and equity capital also exist. When talking to banks, you need a business plan that includes a detailed financial plan.
Every bank has its own lending department for business customers; KfW Bank’s start-up loans (up to € 125,000, up to € 500,000 or unlimited) and NRW.BANK’s start-up loans are also well established. Feel free to contact us – we will be happy to advise you on debt capital together with NRW.BANK. Here, too, you have the opportunity to have your business plan reviewed before things get serious.
Would you like to find out more about debt capital or get more specific advice on your business plan? Contact our expert on business plans:
+49 (0)234 32-29323
Student funding programme “Proof it!”
Effort: low / focus: start-up funding for your own business idea/first prototype / no financial risk
The funding programme “Proof it” provides the necessary financial resources in the early stages of your start-up that enable you to systematically work out and implement your start-up idea. The funding is part of the start-up scheme offered by the WORLDFACTORY Start-up Centre at RUB. It covers both material and travel costs to help your start-up establish initial contacts in the target industry at (national and international) trade fairs and conferences and to cover consumables and investments, e.g. for prototype development.
Who is eligible for funding?
Students and PhD students from all RUB faculties who are interested in founding a company can apply for funding. Funding is available for teams (at least 2 people) with a feasible start-up idea. You will be required to continuously participate in training and supervisory sessions with the WSC team.
What are the decision criteria for funding?
The decision criteria for funding are based on the central building blocks of a business model and its feasible implementation:
- How innovative is the idea
- Market potential
- Team composition
However, you won’t have to submit a detailed business plan yet.
What is funded and in what amount?
Teams receive funding of up to €2,000 for materials and travel expenses. After a positive assessment by the jury, each team must submit a complete cost plan on how and for what the funds are to be used.
How does it work and who decides on the funding?
The WORLDFACTORY Start-up Centre holds regular jury meetings to find suitable start-up teams and award the funding. Teams have to pitch their business idea in five minutes (max. 15 slides) at the jury meeting and then answer questions from the jury for five minutes. The jury is made up of experienced start-up coaches from the WORLDFACTORY Start-up Centre. The jury’s verdict is decisive for the funding.
When are the application deadlines?
You can apply for funding at any time. We’ll need a few important details from you, such as name, faculty, degree programme, number of semesters and team composition. We will arrange the dates of the jury meetings with you and your team individually. We always award the funding at the end of the quarter, which means you can make your first purchases in the following month. Proof it! is a first-come, first-served scheme. This means that if the funding programme is exhausted, you’ll have to wait until next year to apply.
Follow-up funding “Proof It!+”
In exceptional cases, a follow-up additional funding round, i.e. “Proof it!+”, will also be available (e.g. if a prototype enters a new development phase in which new costs are incurred). You should verify in advance whether follow-up funding is likely to be successful. In any case, you will have to apply again, including a pitch.
Learn more about the Proof it! concept here. You still have questions, would like to register for the jury meeting or take part in the WSC Pitch Training? Please contact:
+49 (0) 234-32-23176