Migrant Founders Monitor 2023 confirms bureaucracy as a major hurdle

Start-ups in Germany benefit from talented founders from abroad. However, despite their advantages, these high potentials often encounter bureaucratic hurdles and language barriers.

The Migrant Founders Monitor by Startup-Verband e.V. and Friedrich Naumann Foundation emphasizes the importance of internationality and immigration for the startup ecosystem, as talented employees alleviate the shortage of skilled workers and ambitious migrant founders provide valuable impetus for innovation and growth. The report examines the characteristics and challenges of migrant founders in Germany.

This year's Migrant Founders Monitor delivers one key message in particular: immigration also plays an important role in innovation, start-ups and therefore economic development.

Maren Jasper-Winter, Member of the Board of the Friedrich Naumann Foundation for Freedom

The current study shows that founders with a migration background make up a significant part of the German startup ecosystem, with a share of 21 percent. Six out of ten German startups with a billion-euro valuation have at least one migrant founder in their founding team. The distribution of migrant founders across sectors and federal states is closely linked to the internationality and population structure of the respective locations. Another finding of the Migrant Founders Monitor is that six out of ten Migrant Founders are first-generation founders who were born abroad.

The startup ecosystem is very international - even here in Germany. At the same time, there is still a lot of untapped potential. If we become more international and attractive for founders from all over the world, our country will benefit.

Magdalena Oehl, deputy board member of the Startup Association

Studies and the job market as motivators

A large proportion of first-generation migrant founders have come to Germany to study here. This development confirms the international appeal of the German university and research landscape. Another factor is the strength of the German labor market, which motivated 22 percent of the Migrant Founders surveyed to come to the country for a job. However, it is also clear that only a comparatively small proportion of 8% of those surveyed came to Germany to set up a business.

Bureaucracy as a barrier

The study describes that 42% of first-generation migrant founders are at a disadvantage when dealing with authorities and offices in Germany. Complex processes and a lack of digitalization make collaboration more difficult and lead to higher costs and time losses, as additional services such as translations are required. A third of respondents also find contact with banks difficult and similar challenges arise here.

The results show the high potential of migrant founders in the German startup ecosystem. In particular, their more international orientation and their pursuit of venture capital as a growth resource make them valuable players in the German economy. However, bureaucratic and banking obstacles still need to be removed in order to realize their full potential and increase the attractiveness of Germany as a business location.

The entire Migrant Founders Monitor 2023 can be downloaded here on the Startup Association's website.