Save Our Startups: Countries across Europe are creating, expanding emergency funding programs for startups hit by coronavirus

(Editor’s note: This post on coronavirus emergency funding programs for small businesses and startups is the second in a series. See Stephen Heiner’s post here about the French small-business effort. This post will be updated with information about new or expanded funding programs.)

As we’ve said before, startups are prone to burn through capital in the best of times. Even if they have technology crucial to fighting the COVID-19 pandemic, new companies are finding that raising early stage capital is even more difficult than before in Europe.

But most of the countries in Europe that are also startup centers such as France, the Netherlands, Germany and the United Kingdom are rolling out aggressive emergency funding programs to Save Our Startups impacted by the COVID-19 pandemic. That said, this is Europe and this effort is unnecessarily bureaucratic. But it is what it is … and most American startups outside VC financing and accelerators are just dangling in the wind, according to our network in the United States.

The irony is that U.S.-based venture funds, which have only lately ventured into Europe already are withdrawing, forcing France and other countries to hustle to replace that funding.

Of course, this is Europe, where politicians are fond of making headlines and announcements, but are slow to actually execute. In some cases, they’ve announced billions in emergency funding programs but have never quite gotten around to setting up an efficient process that allows startups to apply.

Here in our headquarters country of the Netherlands, we’ve heard first-hand accounts of requirements that investors submit letters of intent for their startups …. but there’s no way to digitally attach that document to the application, and the application is rejected.

“The big challenge for startups is to get the detailed information about the programs,” Sifted quotes Berlin Partner press representative Lukas Breitenbach as saying. “We have counteracted this issue with a hotline and town hall calls.”

Most emergency funding programs opened in March as the coronavirus set in, and most of that money is gone. But some countries are realizing that initial round was sufficient.

French officials are considering increasing their 4 billion euro emergency funding program for tech startups by more than 50 percent, according to Bloomberg. Germany is planning to establish a 10 billion euro “future fund.”

Duke University in North Carolina has created with a dashboard that allows you to search for loans, grants and other programs on a global scale, with about $1 trillion available. This database includes funding for social (non-profit) entrepreneurs as well as for-profit startups.

A few things to think about:

• Almost all emergency funding programs give out convertible loans. That means if the government agencies don’t decide to covert the debt to equity, you pay the money back with interest. That interest rate could be 8 percent or higher in some cases, and some loans must be paid back in as little as three years. Since debt is deducted from capital structure, that could be a disincentive for future investors.

• In some rescue programs, such as the U.K.’s Future Fund, the convertible note becomes the most senior class of shares in the company. That might not be something your investors will thank you for. Also, you have to treat the government the same as any other investor, requiring you to possibly make sensitive information available to them.

• Some programs – and again, the Future Fund is an example – include transfer rights. That means the government can transfer the loan – or equity stake should they convert – to an institutional investor. So you could wake up one day with a particularly aggressive and demanding new partner.

• Many of the programs include requirements that you raise matching funds from private investors. And in some cases, the startup itself can’t apply directly … only its investor group.

• Some programs are only open to startup/scale-ups that are generating revenue.

• Look out for liquidation preferences, which means even if your startup fails, you still have to pay back the government loan.

If you don’t remember anything else from this post, remember to READ TERMS CAREFULLY AND WITH YOUR CLOSE FRIEND WHO’S AN M&A ATTORNEY BY YOUR SIDE. Seriously. If you don’t have one of those, we suggest you make one right away. Also, applying for these loans is time-consuming and almost requires that teams dedicate one or more members to the application effort.


The European Union and individual countries are encouraging angel investors and venture capitalists to accelerate investments in startups. The various efforts including Horizon 2020 are extending application deadlines. But most of the immediate funding is available through local economic development efforts that are often on the provincial or even city level depending on the country.

Interesting factoid – assistance in Germany is made through KfW, which was created as part of the Marshall Plan just after World War II.

The KfW is a German state-owned development bank based in Frankfurt. Its name originally comes from Kreditanstalt für Wiederaufbau (“Credit Institute for Reconstruction”).

So in a sense, an American initiative is bailing out German startups in 2020 when U.S.-based startups don’t have any similar access to emergency capital.


France is expanding its 4 billion euro tech startup support program by more than 50 percent to compensate for an investor retreat, according to Bloomberg.

French officials are projecting demand for government-backed loans to double to 4 billion euros from 2 billion euros by the end of 2020.

Here’s the link to France’s startup rescue kit, with information, contact information and resources.


The German government set 2 billion euros aside in April to assist startups and scaleups.

The package of measures is based on two pillars:

Pillar 1 – Corona Matching Facility:

Venture capital firms will make funding available through the new Corona Matching Facility, the idea being investors will finance highly innovative and promising startups even during the Corona crisis. This is to ensure that young companies can continue on their growth path even in the current phase. The Corona Matching Facility is available through KfW Capital and the European Investment Fund.

You can get the details here.

The ERP Start-Up Loan – StartGeld can be an alternative. This loan provides a maximum of 30,000 euros for working capital – with up to 80 percent of the risk assumed by KfW.

Pillar 2 for startups and small and medium-sized companies (without access to pillar 1)

This is for startups and small and medium-sized companies that do not have access to the Corona Matching Facility.

You don’t apply for your KfW loan directly to KfW but to your own bank or a savings bank. 

That said, here’s the link to start the application process.

We also found the Berlin Partners page has great info for startups in Berlin. But as we stated, many of these efforts are local, without a central clearing house for applications.

Sifted, which has covered the financial aid for startups developments better than any other tech website, notes that in Germany, “… the biggest complaint is that, nearly two months into the coronavirus pandemic and one month after the package was first announced, it is still not exactly clear how the money will be doled out and when.”


The Netherlands has multiple loan programs that include low-interest bridge loans, with the money divvied out from the the federal government to regional development agencies including Brainport Eindhoven.

Here in Brabant where Dispatches is headquarterd, there’s 100 million euros available in bridge loans, with apparently another 100 million-plus euros coming from Den Haag. Loan amounts range from 50,000 euros to 2 million euros. Loans above 250,000 euros require shareholders and/or outside investors to match at 25 percent.

Techleap, which is part of the government startup program, states that depending on the size of the loan request, the government will turn around the applications in record time … from four working days to three weeks. Which itself is amazing. Techleap also has a portal to applying for various programs, but alas, it’s in Dutch.

Those programs include the NOW program, which is open until 31 May. Under this program, startups might be awarded funds to cover up to 90 percent of wages depending on how much revenue a startup is projected to lose.


Back in mid-April, the U.K. announced a 1.25 billion pound Future Fund support package to help tech startups survive the coronavirus pandemic. There’s even a government website with a link to apply.

Alas, the program isn’t yet up and running. But if it were, U.K. startups are eligible for loans of 125,000 pounds to 5 million pounds, with private investors matching government financing. To be eligible for a Future Fund loan, startups must have raised at least 250,000 pounds from investors during the most recent five years. Also, you must raise matching funds from private investors and/or institutional investors.

Before you do anything, read the three-page Future Fund terms explainer, which is lengthy, but clear. Things you can’t do with the money is pay off other perhaps more expensive debt or investors.

(Editor’s note: Dispatches covers technology, startups and innovation centers because that’s where our highly skilled internationals tend to work.)

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Co-CEO of Dispatches Europe. A former military reporter, I'm a serial expat who has lived in France, Turkey, Germany and the Netherlands.

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