When it comes to location, young entrepreneurs are increasingly choosing the Free State. Here, they find optimal conditions, from qualified employees to investors—and a strong SME sector that is happy to provide start-up support.
When it comes to new companies, Bavaria has nothing to hide behind the German start-up stronghold of Berlin. Only in the Free State, the motto is not "poor but sexy" like in the capital, but rather “well-connected and therefore sexy”Anyone starting a business in Bavaria can expect valuable consulting and financing networks, a strong investor scene, a strong SME sector, inspiring proximity to universities and research institutes, and experienced specialists from all fields.
These advantages obviously far outweigh the disadvantages that come with high rents, leases and living costs. A vibrant startup and Start-up scene Not only in Munich and Upper Bavaria, but also in Friedberg, Georgensgmünd, and the Altmühl Valley, company founders are making a name for themselves, conquering markets worldwide with their innovations.
Andreas Gölkel also appreciates the proximity to customers and investors in Mühldorf am Inn Together with the two IT specialists Richard Michel and Christoph Trautbeck, the business economist and amateur photographer founded the pixx.io GmbH, which develops hardware and software solutions for professional media management for medium-sized companies, agencies and authorities. “Our image management combines the advantages of a local solution with the flexibility of the cloud.”, explains Gölkel. The software simplifies users' daily work with image, graphic, and video files. The three managing directors have already won over numerous customers. "We've gained new customers, especially medium-sized manufacturing companies in the region that use images and videos in their development, marketing, and documentation departments," he explains.
Financing was not a problem
Initially, the founders relied on their own funds. However, they quickly found investors, particularly through the financing network BayStartUP in Munich, which made the growth possible in the first place. Only recently, pixx.io a financing round via the crowdfunding platform Indiegogo The company plans to use the capital to further expand – initially in Austria, Switzerland, and Finland, and later in Great Britain. “Especially in Upper Bavaria, many competitive family businesses are based, which made our start much easier.”, Gölkel outlines the advantages of the location: "We like it here so much that we are happy to put down roots."
This is evidently the case for many young entrepreneurs. Although Berlin, along with the two other city-states of Hamburg and Bremen, leads the nation in terms of start-up rates, as the KfW Start-up Monitor shows, the states of Rhineland-Palatinate, Hesse, and Bavaria follow closely behind. Munich and Berlin shows that fewer companies are founded each year in the Bavarian state capital than in the capital. In Munich, however, the majority of young companies survive even the difficult early years. The situation is different in Berlin: Many startups there don't even last twelve months. More founders fail in the capital than elsewhere, as confirmed by the Investitionsbank Berlin (IBB) two years ago: With 36 business closures per 10,000 employees, there are more dissolved companies there than in other cities. However, the steady stream of new startups more than compensates for the high attrition, the researchers concluded.
The chance of survival is high
The country comparison of the absolute figures shows what the Bavarian Minister of Economic Affairs, Ilse Aigner (CSU), likes to emphasize again and again: “Bavaria is the number one startup country.” According to the data from its ministry, the Free State of Saxony leads the balance of new businesses founded and closed in 2014 with an increase of 13,372 businesses, followed by Berlin, North Rhine-Westphalia and Lower Saxony.
This also corresponds to the experience of Annemarie Grund, Head of the Start-up Unit of Chamber of Commerce and Industry for Munich and Upper Bavaria"Anyone who starts a business here has a good chance of still being successful in a few years." Given the higher cost of living, the pressure to operate successfully is greater in Upper Bavaria. "And this often leads to hidden treasures and hidden champions," says Grund.
In view of the growing number of start-ups, especially in the innovative digital environment, the Chamber of Industry and Commerce for Munich and Upper Bavaria opened the Start-up unit. “We see ourselves as One-stop shop "For founders, we serve as the first point of contact, regardless of whether it concerns financing, funding, legal, or tax issues," explains the expert. "As the Chamber of Industry and Commerce, we have the relevant expertise – all under one roof." The Chamber of Commerce and Industry offers comprehensive, free start-up assistance: In addition to initial consultations on business plan and legal issues, founders and young entrepreneurs also learn how to prepare for internationalization. They also receive information on financing options—such as crowdfunding—as well as funding opportunities and contact points.
Bavaria wants to further boost the start-up scene. With the Growth Fund, the Free State of Bavaria has been providing venture capital to promising start-ups for several months. The fund is intended to co-finance 250 million euros of investments will be mobilized. In addition, the LfA Förderbank Bayern and the European Investment Fund (EIF) aim to activate investments totaling more than half a billion euros with a new offering: Firstly, the LfA is investing 75 million euros in an EIF fund of funds that will provide growth capital of 375 million euros for Bavarian start-ups. Secondly, the LfA is incorporating an EIF default guarantee into its promotional loans, enabling it to provide new loans totaling 150 million euros for 1,200 companies.
At the start-up fair Bits & Pretzels In September in Munich, Minister Aigner also presented the Digital bonus This should also help small and medium-sized companies to Digitalization their processes and business models and strengthen cooperation with start-ups as providers of digital solutions. Bonus of 5,000 euros can be used for all areas of digitalization, including software and IT security.
This article has been shortened and first appeared in the IHK Magazine 12/2015 (December 2015 issue) (author: Monika Hofman).
Offers from the Chamber of Commerce and Industry for startups:
The Startup Unit of the Chamber of Industry and Commerce Munich and Upper Bavaria offers startups cross-topic advice on all questions relating to
- Founding
- financing
- internationalization
- Networking
- Crowdfunding
If you are about to found a startup or have questions about your business idea, please contact us by email at startup@muenchen.ihk.de and arrange a free consultation with a member of the IHK Startup Unit.
If you have specific questions about crowdfunding, please contact us directly by email. crowdfunding@muenchen.ihk.de.
If you are planning a crowdfunding campaign, you can book a consultation with Linette Heimrich and get valuable tips and information about crowdfunding. Three to four times a year, the Crowdfunding Night In addition, the crowdfunding Facebook group current topics discussed and questions about crowdfunding answered.
