When starting your own business, sooner or later the question of financing comes up. In this blog post, we will explain why the EXIST Grant is a good choice and how to apply for it.
The EXIST Grant as the Founders’ first Choice
As soon as founders decide to start a company, they usually have considered various aspects that are important for the success of the startup project. One of these considerations relates primarily to financing the start-up and personal living expenses. In addition to loans and venture capital, the option of a scholarship is an attractive possibility to cover living expenses and more.
However, finding the right grant program can be challenging, especially since different eligibilities, as well as different terms and conditions, make it difficult to choose. Start-up grant programs in Germany are mainly offered at the federal or state level, with many of these programs also being partially co-funded by the ESF. One well-known funding program on the federal level is the EXIST Business Start-up Grant, which provides funding for personal living expenses as well as a budget for material and coaching. In terms of funding scope, the EXIST Start-up grant represents one of the best funding offers in Germany and is therefore the first place to go, for prospective start-ups with an innovative business idea.
What can you expect?
The program is set up by the German Federal Ministry for Economic Affairs and Energy and co-funded by the ESF, aiming to support founder teams over the course of 12 months, while enabling them to work full-time on their startup idea. While students can receive 1.000 € a month to finance their living expenses, graduates receive 2.500 € personal funding plus additional means if they hold a PhD or for parents with children. An additional 10-30k € material budget and 5k € coaching budget are available to purchase necessary resources or to develop a first prototype of the start-up idea and to finance founding-relevant coaching programs.
What are the formal requirements of EXIST?
If you have considered applying for the EXIST Business Start-up Grant, it is important to check the formal requirements for an application in advance. Most of your team are expected to have a university degree or employment at a university that is not older than five years in order to receive the EXIST Grant. At the same time, the start-up project must not have been legally founded yet. In addition, the team should also be aware that no further personal funding is permitted in addition to EXIST.
Many founders plan to maintain or start a second job during the EXIST funding phase, for example to generate additional income. However, caution is advised here, as only a maximum of 5 hours per week is permitted as secondary employment. The reason for this is that the grantees should concentrate full-time on their start-up project.
Innovation is Key
Meeting the innovation standards may be challenging as well for prospective founders since it is not always clear what is innovative and what is not. For instance, the use of technologies already established on the market for the start-up project is not an exclusion criterion. Innovation also means using existing approaches in a new way and integrating them into newly imagined concepts.
As EXIST supports innovative start-up projects, applicants should present the innovative characteristics of their idea.
In general, the start-up ideas must surpass the current state of the art. However, this does not mean that only technology innovations are funded. So-called knowledge-based services also fulfill the innovation requirement. Interested applicants should be aware that a transparent presentation of innovation is an essential requirement for a successful EXIST application.
A Scientific Background matters
EXIST exclusively supports start-up companies from the scientific domain, which is also reflected in the formal criteria, that a certain amount of prior scientific development must be demonstrated as part of the start-up project. This is another reason why some applications are not accepted, as the team members do not provide the relevant evidence of research reference. However, a proof of your research background can also be provided in the form of final theses (bachelor’s, master’s, doctoral), project work during employment at a university, through research papers or also as a combination of enabling studies and professional experience. Indeed, there are many possibilities to provide a research background for your EXIST application.
In any case, the competencies resulting from the research work must be decisive for the implementation of the start-up project. A transparent explanation can contribute to a positive outcome of the application process.
Timing and the right Team sustain the Application
How does the application for the EXIST Start-up Grant work? Well, before it comes to the application itself, some advice
First of all, it must be clear at what point in time the funding program is to start. This also determines how much time is available for your application. Equally important is
, that founders have a “Plan B” ready, because some EXIST applications are rejected. In general, the founding team should create optimal conditions for an application before applying. Above all, the team situation should be reviewed. Does the required profile of the start-up project match the competence profile of the founding members? Or does it make sense , to win co-founders for the founding idea who can contribute important competencies
Once the initial conditions have been aligned, the application process can begin. In addition to the application documents, which must be signed by the founders, mentor, and the university,
The Idea Paper is the Backbone of your Application
The application for the EXIST Start-Up Grant stands or falls with the idea paper. Without a meaningful and self-explanatory idea paper that presents your start-up idea convincingly and plausibly, the chances of being recommended for funding are low.
But what should be included in the content of a good concept paper? In general, it can be understood as a business plan based on the current status of the project. Therefore, it is necessary to provide the appropriate content. This includes above all the business idea itself, but also the background to the project. In particular, how the founding team came together and how the innovative idea was developed. In addition to a current project plan, the idea paper should also include a description of the current status, the USP and a complete market analysis. Furthermore, the actual status of business planning should also be described in such a way that a healthy financial plan, a start-up plan in line with requirements and also realistic and informed statements on opportunities and risks are presented in a comprehensible manner.
An Application is Worth the Effort
Even though the application process is labor-intensive, you should not be afraid of the effort. In the end, at least precious feedback is available, which gives hints on blind spots, challenges, and possibilities for improvement of the start-up idea. In the event of a successful application, extensive funds are available for
the further development of your start-up project.
If you are not sure how to apply or what you need for an application there are different universities and institutions that are supporting you along the entire process. As one of them, we are happy to help you with all your applications, your idea paper, and the applications itself. Feel free to contact us via the form below. We are looking forward to supporting your start-up idea!