German government's Future Fund takes shape

The German government wants to invest 10 billion euros to support start-ups. Now the first plans for the fund are becoming public.

The planned fund for the future is finally becoming concrete. The federal government is presenting its plans for the 10 billion euro investment pot. The sum will be divided between two pillars.

First, two new funds will be established. A new KfW Capital fund of funds will be endowed with one billion euros. This is intended to support start-ups in larger financing rounds so that they will no longer have to rely on foreign investors in the future. Investments will be made according to the waterfall model: the money will be paid out to the start-ups via sub-funds. This way, the risk can be minimized. The second fund is a deep-tech fund for groundbreaking technologies. Here, start-ups that deal with, for example, artificial intelligence or biotech - industries in which it usually takes a long time to get into the black - can be particularly happy.

The second pillar has been under discussion for some time and was already a topic in the budget committee in November: part of the money will flow into existing investment opportunities of the state, for example, the KfW, the European Investment Fund or the High-Tech Gründerfonds.

The start-up representative of the German government Thomas Jarzombek (CDU) speaks of a "huge blow" forward. "This is the biggest ever in Europe." The money will be paid out over ten years starting next year. Jarzombek hopes that another twenty billion euros will be added by private venture capital investors. In total, Germany's investment could thus increase to 60 billion euros. The state money should not be distributed blindly. Jarzombek assumes up to double-digit, high returns. "We are making money here for the taxpayers."