German start-ups increasingly rely on employee participation

According to a survey, every second young tech company in Germany now relies on giving shares to its employees.

In Germany, too, founders are increasingly giving their employees a share in the company's success. According to a survey by the digital association Bitkom, every second start-up now gives its employees a share. In the previous year, this figure was only 44 percent. In addition, 40 percent can imagine equity participation in the future, while seven percent rule out such a thing completely.

"Internationally, it is common for startups to offer an equity stake in the company when competing for talent. In Germany, this is still too seldom the case because the legal regulations are not practical and make employee participation unattractive," says Bitkom President Achim Berg. This was already a much-discussed topic during the last legislative period. Founders repeatedly call for the regulations to be adapted in order to remain internationally competitive.

This is because in Germany, employees who become shareholders in the start-up are asked to pay tax before they have even sold their shareholdings. Three-quarters (78 percent) of startups say it would help them if policymakers made employee shareholdings more attractive. "In its start-up strategy, the German government promises improvements, and these are urgently needed," says Berg.