Business Angels & Venture Capital
Capital through Business Angels
Investments in early business phases
Investors & Funding – capital for start-ups and innovative projects through the help of experienced entrepreneurs and business angels. Business angels provide start-ups with capital in early phases and ideally also contribute their know-how and network to the investment. Prerequisites for an Angel Investment are above all:
- An innovative business idea,
- in which the angel can contribute with his own experience and network,
- the associated potential for value creation and value enhancement,
- clearly recognizable competitive advantages and unique selling points that have the potential to assert themselves in the market, and
- a strong and interdisciplinary team of founders, which is characterized by commitment, enthusiasm for its own offer and the ability to cooperate.
Business Angels finance start-ups with their private capital and usually by means of a direct participation in the company.
Capital through Venture Capital
Investments in the growth phase
Investors & Funding – Capital for start-ups can also be acquired through venture capital companies. Venture capital companies usually invest in technology-oriented and innovative companies in the growth phase, i.e. a little later than business angels. The start-ups are usually financed through a venture capital fund. The main prerequisites for venture capital are:
- a new and innovative business idea or technology,
- a large, promising and potentially very fast-growing market,
- a very clearly recognizable customer benefit as well as
- a team that shows that it can and will drive the further growth of the company
- and ideally has already positioned itself on the market and can show rising sales.
By providing the start-up with capital, venture capital investors also become co-partners with all the associated rights and obligations.
Participations together with Business Angels
If a business angel provides financing in equal parts, NRW.BANK can assume a maximum share amount of € 100,000.
- Precondition: You are a company in the digital economy in the start-up phase (up to a maximum of 18 months).
- Alternative: Convertible loan with a term of up to 7 years with deferment of interest payments until final maturity. The term and the amount of the interest rate depend on the convertible loan granted by the Business Angel.
Subsidy for capital
“INVEST – Subsidy for Venture Capital” is intended to motivate business angels to provide capital for start-ups at all or more than before.
- The acquisition subsidy amounts to 20% of the investment sum for the acquisition of shares.
- At least €10,000 must be invested. Each investor can receive acquisition grants of up to 500,000 euros per calendar year for investments.
- There is a subsidy for taxes paid by the business angel / start-up investor on exit profits.