Consultation, Support Services & Premises Rental Services
While both the EU and Germany offer financing options for startups which range from loan guarantees to equity investment, neither seems to directly fund consultation, support services, or premises rental service companies. Rather, both partner with organizations that offer these services and Germany offers subsidies to startups at the district level to enable them to take advantage of consultancy services. Below is an explanation of why the project criteria may be based on a false premise as well as our research strategy.
Germany Useful Findings
- In the German startup ecosystem, the government offers generous subsidies (up to 90%) for startup consultancy services "via the GCD scheme."
- We were unable to locate an English-language list of approved consultancy firms at the national level, as applications for consulting subsidies are submitted at the district level through either "the local IHK (Chamber of Commerce) or Handwerkskammer (Chamber of Trade)."
- Reviews of startup consulting firms like the NextGen Business Council and Berlin Thinking do not find any who bring up their ability to receive government subsidies as a selling point.
- Consequently, it is our understanding that many or most startup consultancy and support firms are eligible to receive "funding" in the form of subsidies to their clients, from the German government.
With the above in mind, below are the descriptions of two consultancy firms which we believe are likely to be eligible for subsidies:
- NextGen Business Council provides consulting services which include managing the bureaucratic process of registering the company, and help at every stage of the startup:
- In the pre-foundation stage, NextGen provides a free initial consult, development of the business plan and/or evaluation of an existing plan, and coordination "of all necessary legal formalities."
- At the foundation stage, it helps obtain government approval of the company name, notary services, consultation on the business address and banking decisions, and aid with various application processes.
- After the company foundation, the firm provides accounting & bookkeeping services, hiring assistance, a payroll service, and GDPR compliance.
- Berlin Thinking likewise provides an array of consulting and educational services for new startups which fall into three broad categories:
- Startup development, which helps its clients to lay out a solid business proposal and then offers support in locating potential partner "investors, institutions, cities and corporates" [sic; we assume that "corporations" is the English term intended].
- Financial counseling, which includes consultation and support in exploiting "additional funding sources like EU grants and crowdfunding."
- Innovation integration, which partners startups with corporate partners who wish to meet "their industry challenges with high-end technology startups." (This is linked to the startup scouting service which they offer to corporations.)
EU Useful Findings
- The European Commission's Financial Transparency System does not list any divisions that seem to be directly connected to funding startup consultation and support organizations.
- While there are examples of organizations providing consultation, support services, or premises rental services to startups in conjunction with one or more EU startup financing programs, but none in which funding directly to the consulting organizations.
- For example, a partnership between Technoport and BIL (Banque Internationale à Luxembourg) was created in 2017 to create "an ecosystem favorable to the emergence of innovative companies in Luxembourg" by supplying financing tools "including loans eligible for the European Investment Fund’s InnovFin guarantee." However, there is no mention of either organization receiving direct funding.
As this request has two major parts, it required two separate approaches.
In our first attempt to locate consultation, support services, or premises rental service for startups funded by the EU, we went to the source, the European Commission's Financial Transparency System, which provides a complete list of all EC investments across its dozens of departments. An initial search using no filters found over 32,000 results for 2018 alone. A quick scan of the top results found that the titles and organizations involved were not intuitively indicative of the purpose of the organization receiving the grant. For example, a 2017 grant to Cambridge for Development and Consultations turned out to be for a human rights program, not for consultations to a startup. The available filters did not allow us to narrow the field of recipients by industry or sector.
Digging deeper into the European Commission's resources, we discovered programs and resources which were not reported by the Financial Transparency System, such as the COSME SME program, which provides funding via a combination of loan guarantees and equity funding, or InnovFin, which provides financing directly to "innovative companies." We were not able to locate a list of organizations that had received financing and so cannot be certain whether any fit the criteria for this project.
Due to the opaqueness of the EC's official sites and their search engines, we went outside and conducted broad searches that attempted to pair the names of the various programs discovered in our earlier investigation with key phrases from our criteria. The partnerships uncovered by this process did not fully match the criteria. For example, we found an announcement for a partnership between Technoport and BIL (Banque Internationale à Luxembourg) to create "an ecosystem favorable to the emergence of innovative companies in Luxembourg" by supplying financing tools "including loans eligible for the European Investment Fund’s InnovFin guarantee." However, we did not find any evidence that the EU was directly funding the organizations providing consultation, support services, or premises rental service in these cases.
Having exhausted the possible avenues of research for the EU, we turned our attention to the German question. An initial sweep of English-language and translated articles on the German startup ecosystem quickly revealed that the criteria are likely based on a false premise, as explained in our useful findings above.