The big federal state survey, Part I: These Corona aids are available from the federal states

Many federal states have special support programmes for start-ups. To kick off the series, we highlight the measures in Baden-Württemberg, Bavaria, Berlin and Brandenburg. Click here for Part II of the survey with the states of Bremen, Hamburg, Hesse, Mecklenburg-Western Pomerania and Lower Saxony. Part III with NRW, Rhineland-Palatinate, Saarland, Saxony, Saxony-Anhalt, Schleswig-Holstein and Thuringiacan be found here.

The federal government has made around two billion euros available to support start-ups affected by the corona crisis. It is passing on part of this to the state development institutes via its development bank KfW. The aim of this "Pillar II" is to support start-ups and small SMEs with mezzanine (i.e. a mixture of equity and debt) or equity financing. How start-ups actually get aid money therefore varies from federal state to federal state. Our overview shows what founders can count on in which federal state and how much money has already flowed.

Baden-Wuerttemberg

In order to get start-ups through the crisis, the Baden-Württemberg Ministry of Economics, Labour and Housing has, among other things, launched the "Start-up BW Pro-Tect

" funding programme. The aim of this programme is to bridge short-term liquidity bottlenecks until the next financing round with the help of a repayable grant. "Start-up BW Pro-Tect" enables crisis-ridden start-ups that have already successfully completed a first round of financing to apply for a repayable grant of up to €200,000. However, in order to access the aid, struggling start-ups in Baden-Württemberg must not yet have raised more than three million euros in equity capital and the start-up must not have been founded more than five years ago.

According to the ministry, 75 applications had been approved for "Start-up BW Pro-Tect" by mid-January, with a further 25 in the selection process at the time. By then, the state had disbursed about twelve million euros under the program, with another three million euros coming from private co-investors.

In addition, there is the "Mezzanine Participation Program

" in the state with which founders can strengthen the equity capital of their start-ups. For this purpose, the Landeskreditbank Baden-Württemberg (L-Bank) bundles state as well as federal funds and then allocates the funds to accredited venture capital companies, which can pass them on to the companies in the form of mezzanine financing instruments such as silent partnerships in particular.

By mid-January, L-Bank had provided funds of 29 million euros for this purpose. Financial intermediaries approved by L-Bank are currently Mittelständische Beteiligungsgesellschaft MBG, Wagniskapitalgesellschaft mbH of Kreissparkasse Reutlingen, S-Kap Beteiligungsgesellschaft GmbH & Co. KG, Pforzheim and the Chancenkapitalfonds der Kreissparkasse Biberach GmbH. The financing amount per company is up to 800,000 euros for this purpose.

Bavaria

LfA Förderbank Bayern has launched LfA-Schnellkredit and Corona-Schutzschirm loans to protect businesses. However, both measures are not aimed exclusively at start-ups, but are intended for all companies in the Free State. The "BayernFonds

" was also launched in August 2020. The 46 billion euros contained therein, which are usually issued as a guarantee for bank loans or as a silent partnership, are also available to start-ups.

In August, the Free State also launched the "Start-up Shield Bavaria

". Behind this are state participation offers. Founders can apply there for a convertible loan of up to 800,000 euros. By mid-January, 221 applications had been submitted. 120 of them were rejected, 33 applications are still being reviewed. Bavaria has so far committed 40 million euros to this.

Founders in the state can also get fresh money through the "Bavarian Growth Fund

" and its follow-up fund, the "Bavarian Growth Fund 2". With this, the state basically wants to co-finance the further development of young companies. According to the Bavarian Ministry of Economic Affairs, the "Bavarian Growth Fund 2" has been available since May 2020 with a fund volume of 115 million euros. The first "Bavarian Growth Fund" is involved in 23 companies. In the "Bavarian Growth Fund 2", investments in five companies have been decided by mid-January.

Soon there should be another fund in Bavaria to support start-ups, the "Scale-up Fund". With a planned fund volume of up to 250 million euros, the Free State intends to provide venture capital for promising start-ups in the later, advanced growth phase.

Berlin

Within the past three months, Investitionsbank Berlin (IBB) has already committed around €51 million in financing for start-ups affected by the corona crisis. The "Corona aid for start-ups

" currently offers public venture capital of a maximum of 800,000 euros per company or group of companies and is passed on to the start-ups via three financing channels (building blocks).

The first building block is financing through the "VC Fund

" managed by Investitionsbank Berlin IBB Ventures. An important precondition for start-ups is that other partners such as venture capital companies, industrial companies or business angels, participate in the company in at least the same amount as the "VC Fund".

In building block 2 of the Corona aid for start-ups, Berlin relies on the involvement of private investors as intermediaries for the disbursement of the financing funds. The intermediaries submit the start-ups for review. If the result is positive, they supplement the public funding with an own contribution of at least 20 percent.

A third financing channel is IBB's "Berlin Mezzanine" programme. Here, the bank supports companies with innovative business models with subordinated loans of up to €800,000, which are granted at a market interest rate.

Brandenburg

In Brandenburg, according to the local Ministry of Economics, there is only the program "Corona Mezzanine Brandenburg

". The Investment Bank of the State of Brandenburg (ILB), in cooperation with the Kreditanstalt für Wiederaufbau (KfW), provides financing to strengthen the equity base of medium-sized companies and start-ups that have run into financial difficulties as a result of the Corona crisis.

The offer is directed, among others, to start-ups in the form of a corporation with a competitive business model. Prerequisite: they must either have their registered office or an operating facility with at least 50 percent of full-time employees in Brandenburg. Start-ups are supported by subordinated loans with termination or conversion rights. The minimum loan amount is 100,000 euros, the maximum 750,000 euros. According to the Brandenburg Ministry of Economics, IBB does not provide any information on the number of applications or the money disbursed so far.