Public Funding: Kickstart Your Early-Stage Start-up with Federal Funding

Starting a company is always a leap into the unknown. Especially in the early stages, when a technology is still being developed and its market potential is uncertain, raising private capital can be difficult. This is where public funding plays a crucial role. According to the Deutscher Startup Monitor 2025, more than half of all start-ups in Germany consider federal funding an important financing option, and almost half already use it. In fact, state funding is currently the most important external financing source for start-ups in the country.

For research-based start-up projects with complex, high-risk development work

One of the most powerful boosters for science-based ventures is the funding program “exist – From Science to Business” (https://exist.de/), supported by the Federal Ministry for Economic Affairs and Energy and the European Union. Through various initiatives such as “exist Research Transfer”, “exist Women”, and “exist Start-up Grant”, it supports projects emerging from universities and non-university research institutions.

The program is designed as a launch aid to promote technology transfer from research to the market. Importantly, the funding (first funding phase) is awarded to the research institution itself, not directly to the future start-up. This means founders initially apply with their idea while still employed at their institute. The institution then provides the infrastructure—such as office space or laboratories—while the funding covers personnel, consumables, and other project-related costs.

The exist Research Transfer is particularly attractive for deep-tech projects with complex and risky development work. It consists of two funding phases: In the first phase, teams can receive funding for up to four employees for at least 18 months to develop their technology and move closer to market readiness. There are typically three application rounds per year, with around 60–80 submissions and about 20 projects ultimately funded. In the second funding phase, the focus is on further development work, the launch of business activities, and preparations for external corporate financing—to help establish the start-up structure, such as a GmbH or a similar legal entity.

For academics interested in starting a business.

For smaller or earlier-stage ideas, the exist Start-up Grant offers a different entry point. It supports founders through stipends rather than employment contracts and is often used for projects that are already closer to market application.

Making the Most of Public Funding

Beyond exist, a wide range of public funding opportunities exists—from programs like GO‑Bio Inital, or Go-Bio Next (https://www.go-bio.de/gobio/de/home/home_node.html) to regional initiatives and innovation grants. Competitions and regional start-up grants also provide financial support and valuable visibility. These programs are particularly important because many deep-tech projects are still too risky for investors in their earliest stages. Non-repayable public funding from federal, state, or local governments therefore often becomes the most accessible and cost-effective way to continue developing an idea.

However, securing such funding requires careful preparation. Applications typically include a detailed project plan, an idea paper describing the current state of research and future goals, and precise financial and project data submitted through online platforms. Experience in structuring these proposals can significantly increase the chances of success. Early alignment with institute leadership is also essential, since the institution itself acts as the official applicant.

The Start-up and Portfolio Manager from Max Planck Innovation, Sebastian Mayer-Borchert, concludes: “Public funding programs like exist provide founders with something that is hard to obtain elsewhere in the earliest phase: time, resources, and the freedom to transform promising research into a viable start-up.”

Learning Summary: Public funding programs such as exist give science-based founders the financial runway and institutional support needed to transform early-stage research into market-ready start-ups.