In a recent Bitkom survey, only one in three startups reported having sufficient financial resources available for the next 24 months. For all other startups, the answer is: Fresh capital is welcome! But financing rounds can be time-consuming and labor-intensive—and thus pose a hurdle for many startups.
Nothing happens without money! Not even—or especially not—with startups. This is confirmed by a recent Bitkom survey of 143 founders of IT and internet startups in Germany. Here are the survey's key findings:
- Only one in three founders will not need any financing in the next two years – all other startups require an average of €2.4 million in fresh capital during this period. The financing requirement increases with the size of the startup. For startups with only one to three employees, the requirement is around €640,000; for those with four to nine employees, it is €1.7 million; for those with 10 to 19 employees, it is €3.1 million; and for startups with 20 or more employees, the necessary financing even rises to €4.7 million.
- Every second founder (55 percent) sees difficult financing as the biggest obstacle for startups in Germany. Bitkom Managing Director Niklas Veltkamp comments:
"Even though the financing situation for tech startups in Germany has improved in recent years, a lack of capital remains the biggest hurdle for German teams to achieve international success. From the startups' perspective, it also takes too long for financing rounds to be completed."
On average, a financing round for the startups surveyed took five months with a business angel, and even seven months with venture capital investors.
- Obstacles notwithstanding, one in three founders can imagine going public. While a year ago, only one in four startups (28 percent) expressed a positive attitude toward the stock market adventure, in the current survey, one in three startups (37 percent) is considering this step.
Public funding is important
What the Bitkom study further highlights: Public funding is important! One in three startups (36 percent) has currently or in the past received government funding from federal states, the federal government, or the EU.
“With the EXIST program, the INVEST grant, and the High-Tech Gründerfonds, politicians have created a whole range of instruments to improve the financing situation of startups, especially in the early stages.”
Veltkamp said. The Federal Ministry of Finance's planned Tech Growth Fund, with a volume of 10 billion euros, could further contribute to the promotion of startups.
