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Understanding German Grants: Which funding options are right for your project?

Writer's picture: Arise InnovationsArise Innovations
A scale compares academic books with a money bag on the left and a money bag with the label 'Grants' on the right. The image symbolizes the different types of grants.
Stock Image Canva Pro: Understanding Grants: Which funding options are right for your project?

Introduction:

In today's increasingly innovation-driven business world, there is a wide range of funding opportunities specifically designed to support companies at different stages of development and with a variety of objectives. From the start-up phase to scaling and international expansion, the right funding can make all the difference in reaching the next level of growth or developing groundbreaking technologies.


But how do you choose the right funding program? What requirements must be met in order to be eligible for funding? After working with over 90 startups and SMEs, we realized that finding your way through the funding jungle is a huge challenge!


This article provides an in-depth analysis of the main types of funding, from academic grants for startups to technology-focused grants to application-based programs.


Using practical examples and expert knowledge, you will learn how to specifically identify funding opportunities, how to avoid the most common pitfalls and which steps are necessary to successfully finance your project with funding. The focus is not only on pure theory, but also on practical tips that will help you implement your project strategically and sustainably.


In this article:

  1. Funding for start-ups

  2. Funding after start-up: Innovation, research and development, digital transformation, innovation vouchers

  3. Requirements for respective funding + expert tips

  4. Bonus material: Access to the free eligibility check + exclusive consulting offer + visual roadmap for successful grant application.



Grants for start-ups pre-incorporation

a) Academic funding

For founders from research and academia, special funding programs offer essential start-up support for turning scientific ideas into marketable products. Such funding not only focuses on financing, but often also on consulting and network support in order to accelerate knowledge transfer and optimally scale innovative projects. They are aimed specifically at academics who want to commercially exploit their research results outside the university walls, but often do not have the necessary entrepreneurial knowledge or financial resources.


Arise-Insights: A key advantage of academic funding programs is not just the money, but the structure they offer. Programs such as the eXIST start-up grant or GO-Bio combine financial support with targeted coaching and mentoring offers that help to strategically develop scientific ideas and turn them into marketable products. Experts recommend identifying potential applications early in the research process and focusing on commercial viability.

At the same time, these funding initiatives also have their downsides. We have already reported on this in detail in this article .


Examples: eXIST research transfer, GO-Bio


Minimum requirements / eligibility:

  • Academic involvement: A university or research institution must be involved, which often happens through cooperation with chairs or research groups. This ensures access to expert knowledge and resources.

  • Innovative business idea: The project must be based on a clear degree of scientific innovation. This requires not only technical know-how, but also proof that the idea can solve a relevant problem and is marketable.

  • Proof of feasibility and scalability: A detailed concept for technical implementation and economic scaling is essential. Funding bodies want to be sure that the innovation is not only theoretically interesting, but also practically feasible and economically viable. Experts therefore recommend paying attention to a clear market strategy right from the conception phase.


Many of these programs also offer access to networks of potential investors, partners and industry experts. It is therefore advisable not only to prepare the application itself perfectly, but also to actively use the networks that these grants offer. In the long term, this can represent a decisive competitive advantage in establishing the idea on the market. Early involvement of relevant stakeholders can significantly increase the chances of success. Get started today and gain access to our network of investors, industry partners, IP/patent strategists, regulatory experts (life sciences), IT security/cybersecurity, and scaleup specialists - book a free initial consultation .


b) Non-university funding

There are also a wide range of funding opportunities for founders who do not come from an academic environment or whose business ideas were developed independently of universities. Regional and national programs in particular offer comprehensive support for putting innovative business ideas into practice. These grants aim to strengthen entrepreneurship and Germany as a business location by offering young startups financial support and expert advice. Such programs are particularly important for founders who have a promising idea but do not yet have the necessary financial means or entrepreneurial know-how.


Arise-Insights: The success of non-university funding depends largely on the innovative strength and economic potential of the business idea. Experts emphasize that it is crucial to develop a clearly structured business plan early on that shows both the technological and market relevance of the project. Many founders underestimate the importance of a solid market analysis and strategic planning that shows funding bodies that the idea is not only creative but also marketable. Comprehensive preparation can make the difference here. Arise Innovations is happy to support you with this step!


Examples: start-up grants, start-up bonus, start-up grant from the employment agency


Minimum requirements / eligibility:

  • Start-up phase: The company or team must be in the early start-up phase. Funding programs in this area aim to support the transition from idea to market launch. There is often a clear limitation to the first 1-3 years after the start-up.

  • Innovative business model: The degree of innovation of the business model is a key criterion. It is not enough to simply start a new company - the business idea must stand out significantly from existing solutions on the market and have the potential to open up new markets or revolutionize existing ones.

  • Detailed business plan: A well-founded business plan is a basic requirement for being eligible for funding. The plan must not only describe the innovative idea, but also show its feasibility and potential market opportunities. Funders want to ensure that founders have a clear strategy for growth, finances and sales.

  • Initial financing options: It is often necessary for founders to be able to provide evidence of initial equity or external financing to show that they are financially stable enough to use the funding sensibly. This can be done through equity, loans or initial investors.


In addition to financial support, many non-university funding programs offer access to valuable networks and mentoring programs. These not only offer practical advice, but also direct connections to potential investors, partners and market opportunities. Experts recommend actively using these additional resources to quickly put the company on a solid foundation and promote growth.

Grants post-incorporation

a) Innovation, research and development

For companies that focus on research and development (R&D) after they are founded, there are special funding programs that accelerate the innovation process and enable groundbreaking technologies to be brought to market. Such funding is particularly important for small and medium-sized enterprises (SMEs), as it reduces the risk factor in the development of new technologies through financial support and at the same time strengthens competitiveness. These programs offer not only monetary assistance, but often also technological advice and access to high-caliber networks from research and industry.


Arise-Insights: Experts recommend incorporating research and development funding into strategic corporate planning at an early stage. Funding bodies attach great importance to a clear presentation of the innovation potential and marketability of the technology developed. It is advisable to build strong partnerships with research institutes or universities during the application process in order to underpin the scientific depth of the project. In addition, funding for R&D is often a decisive lever for convincing private investors, as it can significantly reduce development costs.


Examples: ZIM (Central Innovation Programme for SMEs), KMU Innovativ


Minimum requirements / eligibility:

  • Research project with a high degree of innovation: The project must be based on clear technical progress and have the potential to be marketable. The degree of innovation here means that it must involve new or significantly improved technologies that disrupt or significantly improve existing solutions.

  • SME status: Most R&D funding programs are explicitly aimed at small and medium-sized enterprises (SMEs). It is therefore necessary that the company meets the SME criteria (usually fewer than 250 employees and an annual turnover of no more than 50 million euros).

  • Collaboration with research institutes: In many cases, collaboration with research institutes, universities or other scientific institutions is required. These partnerships help to strengthen the scientific claim of the project and ensure that the technologies developed are at the cutting edge of research. At the same time, research institutes often bring additional funding opportunities or networks.


Additional added value: Programs such as ZIM and KMU Innovativ often offer not only pure R&D funding, but also promote knowledge transfer between companies and research institutions. In addition, companies that successfully use these grants can significantly reduce their risk in the innovation process and at the same time increase their international competitiveness. Especially in high-tech sectors where development costs are high, these programs can make the decisive difference in bringing projects to market more quickly and establishing themselves as technology leaders.


b) Innovation vouchers, digital transformation

In an increasingly digitalized world, it is crucial for companies to adapt their business models to the requirements of digital transformation in order to remain competitive. Funding aimed at digital transformation helps companies digitize their processes, integrate innovative IT solutions and develop new business models. These funding programs offer financial support for the implementation of digital strategies and help small and medium-sized enterprises (SMEs) in particular to successfully master the transition to the digital age.


Arise-Insights: Experts emphasize that companies must approach the digitization process strategically instead of relying on short-term, isolated measures. Funding programs for digital transformation - such as go-digital or regional innovation vouchers - offer an excellent opportunity to invest specifically in digital technologies. However, it is recommended to use these grants not only for technological upgrades, but also to develop digital business models that ensure long-term success. The combination of funding and expert advice is particularly advantageous, as many of these programs also include services for the implementation of digital solutions.


Examples: go-digital (expiring soon), regional innovation vouchers


Minimum requirements / eligibility:

  • The company's ability to digitize: Funding for digital transformations is primarily intended for companies that want to digitize their existing structures and processes. The company must therefore be willing and able to implement appropriate measures. A clear digitization strategy is an advantage in order to prove eligibility for funding.

  • Evidence of planned digital measures: When applying, companies must provide evidence of the specific digital measures they plan to implement, such as the introduction of cloud systems, the development of IT security solutions or the digitization of business processes. A detailed plan for the implementation of these measures is essential in order to successfully apply for funding.

  • Minimum number of employees: Some programs, such as Go-Digital, are primarily aimed at SMEs with a certain number of employees. Typically, these programs are designed for companies with up to 100 employees. It is therefore important to check the specific criteria of the respective funding program.


Programs such as go-digital not only offer financial support, but also access to certified consultants who support companies in implementing their digitization measures. This ensures that digitization is based on a professional and sustainable foundation. Regional innovation vouchers, often offered by federal states or cities, are a flexible way to promote digital projects while strengthening local economic structures. Through digitization, companies not only become more efficient, but also secure long-term competitive advantages in a rapidly changing market environment.


c) Technology-based funding

Technology-based funding focuses on companies that develop specific and often groundbreaking technologies, regardless of the application area in which they are used. The focus here is on technological progress - be it in areas such as innovative materials, nanotechnology, artificial intelligence (AI) or quantum computing. These funding programs are particularly interesting for companies that work in so-called "deep tech" fields, where extensive research and development is necessary to create new technological solutions.


Arise-Insights: Experts recommend that companies seeking technology-based funding pay particular attention to ensuring that their innovation has real disruptive potential. This type of funding is less aimed at incremental improvements and more at technologies that challenge and transform existing market standards. It is also advisable to take an international perspective, as funding bodies often see the global competitiveness of the technology developed as a decisive criterion. Market access does not have to be imminent, but a clear vision for commercialization is crucial.


Examples: EIC Accelerator, SME-innovative


Minimum requirements / eligibility:

  • Technological focus: Companies must demonstrate that they are focusing on so-called deep tech or new technologies. This includes areas such as artificial intelligence, new materials, robotics or biotechnology. The projects must be at a stage of research and development where technological breakthroughs are possible (TRL: 4-6).

  • Market readiness not required: The focus of these grants is on technological innovation, not immediate market readiness. Companies do not necessarily have to have a marketable product, but can be in the prototype or pre-development phase. This offers an important opportunity for companies that are still in the experimental or conceptual phase of their technology.

  • High degree of innovation and international competitiveness: The innovation must be characterized by a high degree of innovation, i.e. it must offer significant advances or new approaches compared to existing technologies. In addition, many funding bodies attach great importance to international competitiveness - that is, the technology must have the potential to prevail in global markets and gain a technological lead there.


Programs such as the EIC Accelerator offer not only financial support but also comprehensive coaching and consulting services to prepare companies for the international market. Funding programs for biotech, quantum computing, AI and similar technologies offer companies the opportunity to advance risky but potentially revolutionary projects without having to bear the financial risk alone. At the same time, these grants often provide access to high-profile research networks, which can significantly accelerate the innovation process. Participation in such grants often elevates the company to a higher level in the eyes of investors and partners, as it shows that the technology has the potential to set international standards.


d) Application-based funding

Application-based funding is aimed at companies whose projects aim to solve specific social or economic challenges - regardless of the technology used. The focus here is on application and positive impact, be it in the areas of sustainability, energy efficiency, healthcare or the environment. This funding supports projects that not only pursue business goals but also have a direct social benefit. This makes them particularly attractive for companies that focus their innovative strength on solutions with high social relevance.


Arise-Insights: When it comes to application-based funding, experts recommend focusing strongly on the demonstrable social benefits of the project. Funders expect the project to not only be technically innovative, but also to make a measurable positive contribution to important global issues such as climate change, health or social justice. It is therefore crucial to provide detailed evidence of the ecological or social benefits and to define concrete metrics that demonstrate project success. A clear strategic plan on how these benefits will be realized is often the key to success in the application.


Examples: Horizon Europe (Green Deal), environmental innovation programmes, life sciences


Minimum requirements / eligibility:

  • Social challenge: Companies must show that their project is aimed at a specific social or environmental challenge. This could be, for example, combating climate change, promoting the circular economy or improving healthcare. Funders are looking for projects that can address and solve clearly defined social problems.

  • Positive impact: The social or ecological benefits of the project must be clearly proven and measurable. Companies must demonstrate how their innovations have a positive impact on the environment, society or economy. This includes, for example, reducing CO2 emissions, promoting resource efficiency or improving the quality of life.

  • Sustainability measures: Projects that have anchored sustainability at the core of their business model are particularly eligible for funding. Companies must demonstrate what concrete measures they are taking to promote sustainable solutions. These include, for example, the implementation of energy-saving technologies, the use of renewable energies or the introduction of environmentally friendly production processes. The long-term sustainability of the project also plays a crucial role.


Application-based funding such as the Horizon Europe Green Deal or the Environmental Innovation Programme not only provides financial support, but also promotes international cooperation and knowledge transfer between companies and research institutions. These programmes help to scale innovative solutions on a global level and strengthen the competitiveness of companies. In addition, companies that successfully use these funding often receive increased visibility and credibility in the public eye. Commitment to socially relevant issues not only improves the company's image, but also opens up new business opportunities in high-growth sectors such as the green economy or the healthcare industry.


e) Special case: tax research allowance

The research tax allowance is a special case of funding for research and development projects. Instead of (in many cases) direct financial support, it is a tax benefit that companies can receive for their investments in research and development. This form of funding is particularly attractive because it can be applied for flexibly and independently of other funding. It offers companies the opportunity to claim their research activities for tax purposes, thereby reducing the financial burden. The research tax allowance can provide crucial relief, especially for companies that continuously invest in innovative projects.

An additional PLUS: Companies that conduct R&D have a legal right to this funding!


Arise-Insights: The research tax allowance is a flexible and easily accessible instrument that is ideal for companies that do not want to take advantage of traditional funding or are looking for additional financial relief in parallel with other funding. A major advantage is the combination with other funding programs, which means that companies can take advantage of both grants and tax benefits. However, experts recommend carefully checking which costs are actually eligible, as only projects that can be assigned to basic research, industrial research or experimental development are funded.


Minimum requirements / eligibility:

  • Research and development: The company must invest resources (personnel and external expenses) in research and development projects that meet the criteria of the Research Allowance Act. These include projects that serve new scientific or technical knowledge or aim to develop innovative products, processes or services.

  • Project definition: Companies must be able to clearly define their projects as R&D projects. It is crucial that the projects are in the areas of basic research, applied research or experimental development and have an innovative character.

  • Eligible costs: Various costs can be claimed, including personnel costs and expenses for external R&D contractors. Clear and transparent documentation of the costs incurred is essential in order to apply for the research tax allowance.


The research tax allowance is one of the most flexible funding options because it is not dependent on specific programs and is open to companies of all sizes. It offers uncomplicated access to financial support, especially for smaller companies, which often have limited resources to apply for traditional funding. In addition, the research tax allowance can be combined with other funding programs, so that companies can double-protect their research activities - both through direct grants and through tax advantages. This dual strategy can make a significant contribution to long-term competitiveness and innovation.

After successfully submitting almost 40 applications, we are the ideal partner for you to get this funding. Unlike many consultants on the market, we also specialize in combining this funding with other grants.

Get free advice now: Contact us .


Arise tips for selecting funding programs:

Expert tips for selecting funding programs

  1. Analysis of the project: The first and most important step is to analyze the project in detail and clarify what kind of support it needs. Is it a technology-based research project or a concrete application solution to societal challenges? Depending on the focus, the funding programs vary considerably in their requirements and goals. For example, technologies such as AI or nanotechnology are often funded through innovation-oriented grants, while application-based funding is aimed at sustainability or energy efficiency. A thorough analysis helps to identify the appropriate programs that are tailored precisely to the project.


  2. Long-term planning: Funding is often associated with long processing times. It can take several months from the application to the final approval, which can be a challenge, especially in dynamic industries. Strategic advance planning is therefore crucial. Companies should start preparing for the application early on by carefully structuring their projects and submitting the application documents on time. Those who integrate funding into their long-term financing planning can not only minimize risks, but also manage growth phases in a targeted manner.


  3. Working with experts: Applying for grants can be complex and time-consuming, especially for companies that are new to grants. It is therefore advisable to involve grant experts . These professionals have extensive experience and know exactly what grant providers are looking for. They can help optimize the application, better assess the requirements of the programs and maximize the chances of success. This is particularly valuable because a well-written application can make the difference between rejection and funding. Expert advice is also helpful in ensuring that projects are targeting the right funding programs and meeting all formal criteria.


Takeaway

Choosing the right funding can make all the difference to the success of your project. From the start-up phase to expansion, there are tailor-made programs for every project that support your specific needs - be it in the areas of technology, research or sustainability. With the right information and a well-thought-out strategy, you can exploit the full potential of your business idea while minimizing financial risks.


To make it easier for you to get started, we offer a free eligibility check . This will give you an initial assessment of which funding programs are suitable for your project and how you can maximize your chances of a successful application. Use this opportunity to start funding your projects in the best possible way!



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