European Angels Fund (EAF)
Since March 2012, the European Investment Fund (EIF) has been supporting venture capital financing for young innovative start-ups with the European Angels Fund (EAF) program. The program is initially only available in Germany and will be expanded to other EU member states. As a so-called co-investment facility, the EAF increases the investment amount of the business angel. The European Angels Fund was developed in cooperation with BAND and the German Federal Ministry of Economics and Technology, or through the special assets from the European Recovery Program (ERP) managed by the Ministry. The EAF has a total volume of EUR 60 million, half of which is borne by the EIF and half by the ERP. The EIF is responsible for the implementation and management of the program.
Aim and Object:
The EAF provides equity capital to business angels and other non-institutional investors to finance innovative small and medium-sized enterprises (SMEs).
Business angels and non-institutional investors are eligible to apply.
The applicant must have sufficient experience in the targeted investment area and be able to demonstrate successful investments in the past. Good access to high-quality investments must be available. However, as a rule, these must be new investments by the Busi¬ness Angel. A financial capacity of at least € 250,000 during the term, usually 10 years, must be available.
Type and amount of funding:
The funding is provided in the form of a participation. The amount of the participation depends on the intended investment amount of the business angel (50:50 co-investment) and should be between € 250,000 and € 5 million.
The fund of funds is managed by the European Investment Fund (EIF). Inquiries should be addressed directly to the EIF.
More information about the European Invesment Fund (EIF) can be found under www.eif.org.
High-Tech Gründerfonds (HTGF)
The High Tech Gründerfonds (HTGF) invests venture capital in technology-oriented start-ups with high potential. In the process, seed financing is ideally secured over a period of at least 12-18 months. Criteria are technology orientation, market perspective, quality of the team and financially appropriate commitment of the team to the company.
The start of business operations may not have taken place more than one year ago and the company must be small (maximum 50 employees, annual sales or annual balance sheet total of no more than 10 million euros) with the company’s registered office and location or an operating facility or branch in Germany. The nationality of the team members is irrelevant.
To enable the analysis and assessment of the business concept, HTGF has established a four-step and transparent process consisting of
- Term Sheet
- Due Diligence
- Participation process
If support is needed in the preparation of the business plan, HTGF provides an experienced coach or network partner. This is often a business angel. He also attaches a letter of reference to the business plan.
In the end, if the due diligence is positive, one of the three investment committees, which have different technology focuses, decides on the basis of an investment recommendation.
The companies can receive up to 500,000 euros in venture capital in a first round of financing. HTGF acquires 15% company shares at nominal and provides a subordinated shareholder loan. The loan has a term of 7 years. The interest (currently 10%) on the subordinated loan is deferred for 4 years to preserve the startup’s liquidity.
The team’s own contribution to the financing is to be 20% (10% in the new federal states incl. Berlin) of the HTGF investment sum. Half of this can be provided by investors (business angels, regional seed funds, private and public investors). In addition, the fund sets aside a further EUR 1.5 million in venture capital for follow-up financing for the start-up.
Business angels, seed funds and other investors are invited as side investors to contribute to the financing.
In the event of higher capital requirements, needs-based solutions are possible. The integration of development grants and/or further capital providers results in higher financing volumes. If private capital providers provide more than High-Tech Gründerfonds, the latter can match the participation conditions of these investors in special cases.