German founders aren't keen on bureaucracy: Whether it's start-up grants, government loans, or even venture capital – there's now plenty of government support for startups in Germany. However, startups often shy away from the bureaucratic hassle and prefer to forgo the funding, according to a Bitkom study.
Only one in two founders (47 percent) has received at least one form of financial assistance. And one in three (36 percent) refrained from applying for such support, primarily because they considered the bureaucratic burden too high (66 percent). Other complaints included a lack of overview of the available options (43 percent) or a lack of time and staff to gather information (35 percent). One in five founders (21 percent) refrained from applying because they considered the chances of success too slim (21 percent).
Forty percent prefer private financing
However, 40 percent also decided against applying for funding for fundamental reasons, preferring private financing. This is the result of a survey of more than 300 German startups commissioned by the digital association Bitkom.
"There is a wide range of government funding available in Germany, from which startups can benefit, especially during the founding phase. However, the programs are still too bureaucratic and difficult to understand. Especially founders who want to quickly turn their idea into a business can't waste their time filling out complicated and lengthy application forms,"
says Bitkom President Achim Berg.
State aid is available especially for the first steps
Founders receive government support, especially in the initial steps of a startup. 24 percent of founders received consulting and coaching grants, 22 percent received subsidies for materials, material costs, and personnel costs, and 21 percent received a start-up grant.
Despite bureaucracy: Most applications are approved
In contrast, only around one in nine startups (11 percent) has taken out a government loan, and only around one in eleven (9 percent) has received government investment in the form of venture capital. Incidentally, founders who take the step of applying for government funding have a good chance of success. Only 15 percent of founders report having ever had an application rejected.
