State rescue package for start-ups implemented as two-pillar model
Following the announcement of further aid measures at the beginning of April and the decision on the Matching Fund at the beginning of May, additional details are now available.
The so-called Corona Matching Facility (CMF) is aimed at already or then for the first time VC-financed start-ups (1st Pillar), while the Federal Government wants to support non-VC-financed start-ups via the existing state companies and state funding institutes (for business promotion) (2nd Pillar).
The official programme description of the Federal Ministry for Economic Affairs and Energy can be found here: Link.
- CMF will initially invest through KfW Capital and the European Investment Fund (EIF), but other vehicles will also be made available.
- The maximum participation ratio of CMF at VC fund level is 70 percent per financing round, as long as (a) 30 percent is contributed by private investors and (b) at start-up level no more than 50 percent of the funds are attributable to CMF per financing round.
- CMF participates as a limited partner at the VC fund level, so that purely internal, yet state-supported financing rounds are possible at company level.
- Consequently, not the start-ups but the VC funds are eligible to apply. These can be funds that already include KfW Capital and/or EIF as investors or not yet. In the latter case, access to CMF will be examined as part of a due diligence process.
- The specific terms and conditions of the programme are still being finalised, with the objective of first disbursements at the end of May.
- Beneficiaries will be non-VC-financed start-ups and small and medium-sized enterprises.
- The financing will be distributed via existing regional companies and state funding institutes. Investment vehicles may include regional and/or medium-sized investment companies, public funds, family offices and business angels.
- In contrast to Pillar 1, matching by private investors is possible but not a prerequisite.
Both Pillars are intended to reach as many start-ups as possible while maintaining a minimum standard of quality.
The BEITEN BURKHARDT Start-up Team monitors developments on a daily basis and will set up a online seminar as soon as the specific program conditions are available.
Dr Mario Weichel