Financing and funding

Securing the right funding is one of the biggest challenges for startups. Whether it’s equity, loans, grants, or investors – there are numerous ways to finance a business. But which funding option is the best fit for your startup? In this course, we provide a comprehensive overview of the most important financing opportunities for founders.

You will learn how to prepare for bank meetings, what funding programs are available, and what requirements you need to meet for startup grants. We talk to experts such as Dr. Ulrich Link (ISB) about venture capital, business angels, and public funding programs. Additionally, we will show you how to successfully utilize financing models such as bootstrapping, crowdfunding, or private equity.

Course Topics:

📌Insights into Startup Financing and Venture Capital with ISB Rhineland-Palatinate
Startup Funding Video Course by Lawyer Philip Gafron
📌Y Combinator: Inside the World’s Most Influential Startup Accelerator
📌Financial support from the incubator
📌How do i prepare for a bank interview with Prof. Dr. Matthias Vogelgesang
📌Financing: A general overview
📌High-Tech Gründerfonds #Foundersclass

Through practical examples, interviews with financing professionals, and interactive content, you will gain valuable insights to find the right funding for your startup. This course will prepare you for your next funding round and help you successfully build your business!

Videos: Investment and structure bank rhineland-palatinate

Investitions- und Strukturbank Rheinland Pfalz in general

In this video, we talk with Dr. Ulrich Link, Executive Board Member of the Investment and Structural Bank of Rhineland-Palatinate (ISB), about the ISB’s role in startup financing and economic development in Rhineland-Palatinate.

We explore the core tasks of the ISB, its unique selling points, and how it supports founders – from funding and networking to industry promotion and the incentives for setting up a business in RLP. Additionally, we discuss how the ISB integrates small and medium-sized enterprises (SMEs) into the startup scene and Dr. Link’s vision for the future of the Rhineland-Palatinate startup ecosystem.

🔹 Chapter Overview:
📌 00:00 – Intro and Introduction
📌 02:08 – What are the ISB’s key responsibilities?
📌 03:55 – What makes cooperation with the ISB unique?
📌 07:34 – Money, know-how & networks – How does the ISB help?
📌 09:23 – Which industries are particularly strong in RLP? Any focus areas?
📌 10:56 – What incentives exist for founding a company in RLP?
📌 12:36 – How does the ISB integrate SMEs into the startup scene?
📌 14:58 – Future outlook: What does the ISB wish for the startup ecosystem?

An exciting insight for anyone interested in startups, financing, and economic development in Rhineland-Palatinate! 🚀

An interview with Sven Gilsdorf (ISB) about venture capital

In this interview, we talk to Sven Gilsdorf, an expert in Venture Capital and Investments at the Investment and Structural Bank of Rhineland-Palatinate (ISB).

We discuss what venture capital is, the benefits for startups, and when it makes sense to consider venture capital funding. We also explore the transition from startup grants like EXIST to venture capital, how to contact ISB, the required documents for an application, the investment process, and how startups are assessed.

Sven Gilsdorf also explains how long it takes to receive the funds, what influence ISB has on a startup’s operations, the exit strategy, and what happens if financial projections are not met. Finally, he shares valuable advice for founders.

🔹 Chapter Overview:
📌 00:00 – Intro and Introduction
📌 00:59 – What is Venture Capital?
📌 01:44 – When and how can Venture Capital be used?
📌 03:42 – Transition from EXIST to Venture Capital funding
📌 04:45 – How to contact ISB?
📌 05:38 – Important documents for application
📌 06:02 – What does ISB focus on?
📌 07:44 – How does the review process work?
📌 09:00 – How does ISB assess a business idea’s potential?
📌 09:28 – Initial contract negotiations – what is discussed?
📌 10:45 – Due diligence – what should startups expect?
📌 12:13 – What types of investments are possible?
📌 12:50 – How long does it take for funds to be transferred?
📌 13:49 – What influence does ISB have on startup operations?
📌 14:52 – What is ISB’s exit strategy?
📌 16:09 – What happens if financial projections are not met?
📌 17:22 – Essential tips for founders

About the cooperation between baukobox and the ISB

In this interview, we talk with Tim Schreck from the Venture Capital department of ISB about the collaboration with the Kaiserslautern-based startup baukobox. Additionally, one of the founders, Christian Wolf, shares valuable insights into the financing, development, and challenges of their company.

We learn how baukobox first connected with ISB, what advantages the partnership offers, and how the EXIST startup grant helped develop their business idea. The discussion also covers the importance of networking, proof of concept, and business model adjustments.

Tim Schreck explains how ISB evaluates financing requests, which financial figures are most relevant for assessment, and what happens after the initial financing approval. Finally, we hear valuable advice for founders, as well as lessons learned from mistakes (fuckups) along the way to securing funding.

🔹 Chapter Overview:
📌 00:00 – Intro
📌 00:49 – Introduction of Christian Wolf from baukobox
📌 02:39 – First impressions and financing preparation
📌 04:40 – EXIST startup grant & idea development
📌 07:38 – Why baukobox chose ISB as a partner
📌 10:28 – ISB’s network, proof of concept & business model adaptation
📌 14:45 – ISB’s initial financing evaluation
📌 20:26 – Key financial metrics for assessment
📌 23:18 – Where would baukobox be today without ISB?
📌 24:02 – Fuckups & essential tips for founders

Videos: "How do I finance a startup?" by Gafron lawyers

Philip Gafron is a lawyer based in Berlin. His consulting focuses on corporate law, especially on implementing business transactions and equity investments. He also continuously advises his clients on all aspects of commercial and corporate law. On YouTube, he has published a video series that provides startup founders with essential information on the topic of funding. We’ve linked this course here for you – more information can be found on YouTube and on the website of the law firm Gafron in Berlin.

1. Basics of Venture Capital Investment

2. Using Convertible Loans Properly

3. Understanding Company Valuations

4. Cap Table and Dilution

5. Employee Participation (ESOP)

6. Term Sheet and Key Clauses for Working with Venture Capital

7. Milestone Investments

8. Liquidation Preferences and Waterfall

9. Anti-Dilution Protection (Down Round Protection)

10. Vesting for Founders

11. Exit (Secondary, Trade Sale, IPO) and Exit Clauses

12. Fundraising and Due Diligence

13. Deal Documentation and Implementation

14. Holding Companies

Videos: Y-Combinator about fundig a startup

What is Y-Combinator?

Y Combinator (YC) is one of the most well-known and influential startup accelerators in the world. It was founded in 2005 in the USA (originally in Mountain View, California, now based in San Francisco) by Paul Graham, Jessica Livingston, Trevor Blackwell, and Robert Tappan Morris. YC has played a pivotal role in supporting early-stage technology startups, many of which have grown into industry giants.

How Does Y Combinator Work?

Twice a year (Winter & Summer), Y Combinator runs a three-month intensive program for selected startups. During this period, founders receive:

Funding: YC typically invests $500,000 in each startup—$125,000 in exchange for 7% equity and an additional $375,000 as a SAFE (Simple Agreement for Future Equity).
Mentorship & Network: Access to a world-class network of experienced entrepreneurs, investors, and industry experts.
Workshops & Coaching: Weekly meetings with YC partners to refine business models, growth strategies, and scaling tactics.
Demo Day: At the end of the program, startups pitch their businesses to a group of elite investors, often securing millions in funding.

Famous Startups from Y Combinator

YC has funded over 4,000 startups, including some of the world’s most successful tech companies:

Airbnb (W10)
Dropbox (S07)
Stripe (S10)
Reddit (S05)
Coinbase (S12)
DoorDash (S13)
Rappi (W16)
Ginkgo Bioworks (S14)

Why Is Y Combinator So Important?

High Success Rate: YC startups have collectively reached a market capitalization of over $600 billion.
Strong Community: YC alumni gain access to exclusive networks and resources.
Global Impact: YC has inspired accelerator programs worldwide and has shaped modern startup financing.

Conclusion

Y Combinator is more than just an accelerator—it has revolutionized the way early-stage startups are funded and scaled. It remains one of the most influential institutions in the global startup ecosystem.

How Startup Fundraising Works | Startup School

Brad Flora, Partner at YC Group, has experienced startup fundraising from all perspectives: as a founder, as one of the most successful angel investors in Silicon Valley, and now as a YC Group partner. Brad has advised hundreds of companies on raising capital. In this talk, he shares stories and insights on how modern startup fundraising works.

Source: Y Combinator (2023): How Startup Fundraising Works | Startup School. Published on Youtube.com. Retrieved from: https://www.youtube.com/watch?v=zBUhQPPS9AY

How to Get Meetings with Investors and Raise Money by Aaron Harris

YC Partner Aaron Harris provides invaluable advice on how to meet with investors in the most effective and strategic way.

Source: Y Combinator (2018): How to Get Meetings with Investors and Raise Money by Aaron Harris. Published on Youtube.com. Retrieved from: https://www.youtube.com/watch?v=Jzz4AEIddzY&t=6s

Videos: Hightech-Gründerfond: #Foundersclass

What is the High-Tech Gründerfonds (HTGF)?

High-Tech Gründerfonds (HTGF) is Germany’s leading seed investor for early-stage tech and high-tech startups. It offers initial funding of up to €1 million, with potential follow-on investments of up to €3 million.

More than just capital, HTGF provides access to an extensive network of industry partners, experienced co-investors, and startup-savvy experts. Founders benefit from hands-on support, strategic guidance, and real connections to scale their ideas.

HTGF focuses on digital tech, industrial tech, life sciences, and new materials – making it a strong partner for ambitious, science-driven startups ready to make an impact.

What is the High-Tech Gründerfonds #Foundersclass?

The #Foundersclass of High-Tech Gründerfonds (HTGF) is an initiative aimed at connecting founders and encouraging exchange within the startup community. Through regular events and formats, the #Foundersclass offers a platform for founders to share their experiences, learn from each other, and grow together.

This network helps overcome challenges and paves the way to success. Some of these events were recorded on video – we’re sharing them here with you. These videos are produced and published by HTGF on YouTube. We’re simply linking to them here.

Phase 1: Orientation and Preparation

How to get funding from High-Tech Gründerfonds:

English version:

Startup Financing – First Steps

Top 10 Mistakes Before the First Funding Round

How Startups Use KPIs Effectively

Dos and Don’ts – From Founding to Pitching to Investors

Phase 2: Fundraising & Contract Negotiations

Term Sheet – The Foundation of a Successful Negotiation

Investment Agreements – What’s Defined and How It Affects Founders

Due Diligence – The Final Hurdle in Fundraising

Phase 3: After the Investment – Structure & Reporting

Shareholder Meetings and Proper Housekeeping in Startups

Reporting – Ongoing Communication with Investors: KPIs, Updates & Transparency

Startups and Corporates – Partnerships at Eye Level?

Phase 4: Exit & Future

How to Exit – Sale, IPO or Buyback: What Exit Options Exist?

Further Informations

Downloads

Hier findest du folgende Ratgeber zum Download:

📍Gründerzeiten 06: Existenzgründungsfinanzierung

📍Förderprogramme: Darauf sollten Sie achten!

📍Checkliste Investitions- und Finanzplan

📍 So können Sie sich auf das Rating vorbereiten

📍Übersicht: Fördermöglichkeiten in DE

Download: https://seafile.rlp.net/d/8663f92e6bfb43c3aaee/

FAQ - Frequently asked questions

Further Informations about the ISB you’ll find here: FAQ Investitions- und Strukturbank Rheinland-Pfalz

Glossary

Basic Terms

Venture Capital (VC)
Definition: Risk capital provided by specialized funds that invest in young, high-growth companies.
Benefit: Enables rapid growth but in exchange for equity.
Example: VC investment in an EXIST startup for international scaling.

Business Angel
Definition: A wealthy individual who provides early-stage startups with capital and know-how.
Benefit: Combines money, experience, and networks.
Example: A former founder invests in an AI startup.

Capital Fund
Definition: Investment fund that pools capital from multiple investors and invests it in startups.
Benefit: Provides larger sums and professional management.
Example: European Deep-Tech Fund.

Due Diligence
Definition: Careful examination of a company before investment (finances, team, market, technology).
Benefit: Minimizes risk for investors.
Example: VC evaluates patents and the business model.

Term Sheet
Definition: Preliminary agreement outlining the key conditions of an investment.
Benefit: Clarifies main points before signing the final contract.
Example: Investment amount, investor rights.

Valuation
Definition: Estimation of a company’s worth, forming the basis for equity participation.
Benefit: Determines how much equity must be given up for an investment.
Example: €2 million valuation, €500,000 investment → 20% equity.

Types of Participation

Direct Equity Participation
Definition: Investors directly acquire shares in the company.
Benefit: Clear ownership structure.
Example: VC acquires 25% of equity.

Indirect Equity Participation
Definition: Investment through intermediary entities or funds.
Benefit: Provides flexibility and risk diversification.

Silent Partnership
Definition: Capital contribution without voting rights; the investor remains in the background.
Benefit: Founders retain control.
Example: Private investor contributes €50,000 silently.

Profit-Participation Loan
Definition: Loan in which repayment or interest depends on the company’s success.
Benefit: More flexible and less risky than traditional bank loans.

Employee Participation (ESOP/VSOP)
Definition: Programs granting employees company shares or virtual options.
Benefit: Increases motivation, loyalty, and alignment with company success.
Example: Development team receives virtual shares payable at exit.

Employee Shares / Profit Participation Rights
Definition: Equity-like participation models granting employees voting rights or profit shares.
Benefit: Enhances identification and long-term retention.

Financing Forms

Bootstrapping
Definition: Financing a startup through founders’ own resources and revenues, without outside investors.
Benefit: Founders retain full control and avoid dilution.
Example: Startup grows solely through early customer revenues.

FFF (Family, Friends, and Fools)
Definition: Early financing through personal contacts such as family and friends.
Benefit: Fast and simple source of capital in the founding phase.
Example: Friends support a startup with €20,000.

Crowdfunding
Definition: Many individuals jointly finance a project, often in exchange for a product or reward.
Benefit: Low entry barrier and community building.
Example: Kickstarter campaign.

Crowdinvesting
Definition: Many investors provide funding in exchange for equity or interest.
Benefit: Alternative to traditional investors.
Example: Startup raises €500,000 via Seedmatch.

Convertible Loan
Definition: Loan that can later be converted into equity.
Benefit: Bridge financing without immediate valuation.

SAFE (Simple Agreement for Future Equity)
Definition: Simple contract that grants investors future shares.
Benefit: Fast and uncomplicated early-stage financing.

Equity vs. Debt Financing
Definition: Equity = ownership shares; Debt = borrowed capital (loans).
Benefit: Clarifies the difference between equity dilution and debt obligations.

Corporate Venture Capital (CVC)
Definition: Equity investment in startups by established corporations.
Benefit: Provides capital, know-how, and market access.
Example: Automotive group invests in a mobility startup.

Grants / Public Funding
Definition: Financial support from government institutions or foundations, usually non-repayable.
Benefit: Capital without equity dilution (non-dilutive funding).
Example: EXIST Startup Grant.

Startup Grant
Definition: Subsidy from the Employment Agency for unemployed individuals starting a business.
Benefit: Provides financial security in the early phase.
Example: Grant covering living expenses and social security.

Subsidized Loans
Definition: Low-interest loans from state banks (e.g., KfW) for startup financing.
Benefit: Improved financing conditions.
Example: KfW StartGeld.

Startup Loan / Bank Credit
Definition: Traditional bank loan for entrepreneurs.
Benefit: Financing without equity dilution but with repayment obligation.
Example: Local bank loan for office equipment.

Guarantee
Definition: Loan guarantee provided by a guarantee bank.
Benefit: Increases chances of loan approval.
Example: Guarantee bank covers 80% of loan risk.

Microloan
Definition: Small loans of up to approx. €25,000 for founders.
Benefit: Simple and fast financing for smaller projects.
Example: Financing lab equipment.

Private Equity (PE)
Definition: Capital investment by professional investors, usually in later growth stages.
Benefit: Enables expansion, often with active management involvement.
Example: Acquisition financing by a PE fund.

Bridge Financing
Definition: Short-term interim financing to bridge the time until the next funding round.
Benefit: Secures liquidity.

Funding Programs

Start.in.RLP
Definition: State program from Rhineland-Palatinate supporting startups.
Benefit: Provides financial support and guidance for local founders.

Aufstiegsbonus II
Definition: Funding program supporting business creation after successful vocational training.
Benefit: Financial incentive for skilled workers to start businesses.

Innovation Program for Business Models and Pioneering Solutions (IGP)
Definition: Federal funding for innovative business models and non-technological innovations.
Benefit: Supports startups developing new solutions beyond traditional research funding.

Financing Stages

Pre-Seed
Definition: Earliest stage of financing, often supported by grants or stipends.
Example: EXIST Startup Grant.

Seed Financing
Definition: First investment round to develop products and enter the market.
Example: Business Angel invests in prototype development.

Series A/B/C
Definition: Successive investment rounds for growth, scaling, and internationalization.

Exit
Definition: Sale of equity by founders or investors.
Forms: Trade Sale (sale to another company), IPO (stock market listing).

IPO (Initial Public Offering)
Definition: First public offering of shares on the stock exchange.
Benefit: Enables large-scale capital raising.

Cap Table (Capitalization Table)
Definition: Overview of all shareholders and their ownership stakes.
Benefit: Provides transparency for founders and investors.

Liquidation Preference
Definition: Rule that determines which investors are paid back first in an exit.
Benefit: Protects investors in case of failure.

Burn Rate
Definition: Speed at which a startup spends its available capital.
Example: €50,000 per month.

Runway
Definition: Period a startup can continue operating with its available capital.
Example: 12 months at current burn rate.

Matching Funds
Definition: Programs in which government funds match private investments.
Benefit: Doubles financing effect.

Non-Dilutive Funding
Definition: Financing without giving up equity, e.g., through grants or subsidies.
Benefit: Provides capital without founder dilution.

Ein junger Mann mit rasiertem Kopf und bordeauxrotem Poloshirt steht vor einer hellgrauen Metallwand und blickt freundlich in die Kamera.

Hi, i'm Lukas

and I manage the e-learning program. Do you have any further questions? Feel free to contact me via email: theisen@gruendungsbuero.info

Financing and funding