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INVEST is a funding program that brings together start-ups and private investors who believe in bold ideas. The INVEST program mobilizes more private venture capital from business angels and helps start-ups find investors more easily to get funding.
The realization of new ideas that you have as a young company, is associated with costs – probably the biggest hurdle that must be overcome in the initial phase of a foundation.
For Wavy, for example, these are costs for developers, customer acquisition, human resources – for several products.
Start-ups often fail in the initial phase because they lack the necessary capital.
For this purpose, the INVEST promotion program was launched: This is a purchase subsidy with which Business Angels receive a tax-free refund of 20 percent of their investment. All they have to do is invest at least 10,000 euros of venture capital in the start-up.
In addition, there is an exit grant with which taxes on profits from the investments are repaid.
Since 2013, over 513 million euros have been invested with the help of INVEST. There have been around 6,380 investments and an average of 81,000 euros of venture capital has been invested. 65 percent of the supported companies come from the information and communication technology sector.
Business angels or private investors can receive the subsidy if they acquire shares of young, innovative companies and hold these shares for at least three years.
The acquisition subsidy amounts to 20 percent of the investment sum for the acquisition of shares. The payment can be linked to the company reaching certain milestones – each individual payment must then amount to at least 10,000 euros. Investors can receive grants of up to EUR 500,000 for each milestone.
In addition, the tax payable on a capital gain can be offset by the exit grant. The investor benefits from a flat-rate tax compensation amounting to 25 per cent of the profit on the sale of the shares he has earned with the acquisition subsidy. The grant is reserved for natural persons.
A company can receive shares from several investors and a total of up to 3 million euros in acquisition subsidies per calendar year. This is free of income taxes and thus improves the incentive to mobilise private venture capital.
If you would like to find out more about INVEST’s funding requirements and the application procedure, click here.