High-Tech Start-up Fund conditions for financing
The HTGF sets some conditions for financing . These are at a glance:
- In the first round of financing, you as the founder can receive up to one million euros .
- The HTGF will set aside a maximum of a further 2 million euros for follow-up financing. This is the standard model, but if required there can also be higher individual financing with other investors after consultation .
- The financing takes the form of a subordinated shareholder loan at an interest rate of six percent. However, this interest rate is deferred for the first four years. The aim of this is that you can conserve your liquidity .
- With the successful financing, the HTGF will acquire a stake of 3% in your company for every EUR 100,000 investment . The actual equity participation is at nominal value, so your company does not need to be valued. The remaining capital is allocated to the company as a convertible loan. The HTGF can invest a maximum of 500,000 euros for 15% in the company plus convertible loan within a seeding round.
- Another prerequisite is that the founder and, in some cases, a side investor also contribute a minimum participation of 20% (10%) to the investment volume. Half of this has to come from the company founder.
- The HTGF only invests in corporations without exceptions . This means that liability is based purely on your company assets. As a founder, you do not have to be personally liable .
- The HTGF expressly welcomes the fact that other investors are also participating in your startup. You can also do a combination with funding.
According to WHICHEVERHEALTH, you can calculate the share quota of the HTGF, as this as well as the founder shares or side investor shares of the seeding are fixed. This can be explained more clearly in the following calculation example.
Seed shares of the HTGF = (seed share of founder + sea share of side investor) / (1 – share of HTGF) x share of HTGF per seeding round
For example, if the founder contributes 100,000 euros in equity and the HTGF’s seed stake is 500,000 euros, then the number of seed stakes and the corresponding equity stake in the HTGF amounts to a nominal value of 1 euros:
Seed shares of the HTFG = 100,000 / 85% x 15% = 17,647 euros
The remaining 482,353 euros are convertible loans to the company.
Advantages of the HTGF
Of course, the HTGF has a number of advantages to offer. The largest result from the equity available in the seed phase . In addition, you benefit from experienced contacts who are at your side during the early-stage financing. As part of this, you will receive competent support – from the beginning to the possible exit and access to a huge network of partners and programs to finance your project.
Advantages of equity in the financing phase
- Despite the risk, you can effectively close possible funding gaps in the seed phase.
- You don’t have to worry less or even no thought about loans and installment payments. So you do not have to reckon with monthly burdens that would result from a repayment.
- This means that there is less risk of insolvency, even if the great success is still a little off.
- In short: as an entrepreneur you are more independent and can decide more freely about the development of your company.
High-tech start-up fund experience
Many successful founders have had very positive experiences with the HTGF in the past. This not only includes successful financing, but also positive experiences, for example with events.
High-Tech Start-up Fund Family Day
In the past few years, Family Day has become an eminently important and respected network event in the startup and venture capital scene. Family Day is a two-day event with more than 1,000 participants. These are international private investors, representatives from the venture capital fund sector and other public investors. They all make it possible for you to get exclusive access to the HTGF Family.
Criticism of the high-tech start-up fund
In the past few years there had been criticism of the HTGF, especially for Funds I and II, not only for the performance but also for the financing conditions . Above all, the age, i.e. the length of time a startup was allowed to exist, and the amount of the first tranche were criticized. This criticism was successfully countered with the launch of the third fund. This means that more startups will be promoted and easier access to capital will be created.
Alternatives to the HTGF
There are of course alternatives to the HTGF . These are especially interesting for you if your capital requirements are very high in the seed phase. The most important alternatives are briefly presented here for you at a glance.
The Coparion Fund has existed since 2016 and is financed by KfW-Förderbank and BWMi . It is especially suitable for you if your capital requirements are significantly higher. In the first round of financing, there are up to 3 million euros for your innovative company. It is important for you that Coparion always only acts as a co-investor. For you, this means that you should already have an investor.
KfW start-up loan
Startups and young small businesses are also supported in their establishment by the KfW start-up loan . Programs to be mentioned in particular are in the foreground here. The main advantage here are the favorable conditions.
So-called business angels are another alternative for you . Experienced entrepreneurs are referred to as such who will help you with your start-up.
Of course, it is also possible for you to find investors for your business idea and your startup yourself . You don’t have to appear at “Den of the Lions”, you can also look for a private investor.
For young, innovative companies, especially in the field of technology, the equity available in the so-called seed phase of founding is often an obstacle. But that’s exactly what High-Tech Start-up Fund Management GmbH , or HTGF for short, is made for . Under certain conditions, venture capital will be made available to you for your startup financing . The HTGF is financed by KfW, the BMWi and around 28 private companies.