The German "Forschungszulage" program funds activities of Start- and Scale-Ups independently of size, industry or age. The "Forschungszulage" is a project-based grant program, meaning that the program funds one or multiple projects that firms pursue in the past, present or future. Firms can receive up to EUR 3.5m per year - tax-free non-dilutive cash. While the “FZul” has not been explicitly designed to fund only Start- and Scale-Ups, the criteria novelty, risk, and structure do apply to many ventures
Projects need to meet the following three criteria:
🔬 Novelty: Projects must address scientific/technical knowledge gaps
⚠️ Risk/Imponderability: Projects must exhibit outcome uncertainty
🗂️ Structure: Projects must have a detailed work plan and reproducible outcomes
Intrigued? Schedule a call now!
Full story
The German grant program "Forschungszulage" is based on the “Forschungszulagengesetz”. The “Forschungszulage” allows the reimbursement of R&D expenses for all companies subject to tax in Germany of up to EUR 3.5m per year - tax-free non-dilutive cash. The program is in place to be a catalyst for innovation and is open to companies in all sectors and locations in Germany.
Reviewing body - the “BSFZ”
The decision of whether an application qualifies for the FZul is made by the “Bescheinigungsstelle Forschungszulage” (BSFZ). This entity is funded by the German government and operationally led by a consortium composed of three project sponsors (“Projektträger”), i.e. VDI Technologiezentrum GmbH, AiF Projekt GmbH, and DLR Projektträger. The BSFZ uses internal and external experts with interdisciplinary experience from science and business to ensure rigorous evaluation against predefined criteria of every single application. It is crucial to understand these predefined criteria and set the right focus and scope in the application texts, numbers, and its annexes.
Tailor-made for Start-Ups and Scale-Ups?
While the “FZul” has not been explicitly designed to fund only Start- and Scale-Ups, the criteria novelty, risk, and structure do apply to many ventures. Details on these criteria follow.
Criteria for FZul project eligibility:
🔬 Novelty
A project is deemed novel if it aims to acquire new knowledge and addresses a scientific or technical knowledge gap. Additionally, it must demonstrate creativity, originality, and be based on non-obvious concepts and hypotheses. Since Start- and Scale-Ups often pursue new technologies and business ideas, project novelty is given in many cases.
⚠️ Risk/Imponderability
Essential to every FZul project is the presence of outcome uncertainty. The presence of technical and scientific risk in a project is imperative in order to meet eligibility for the FZul. As it is at the core of most Start- and Scale-Ups to experiment with virtual and physical products to challenge the status quo, projects at Start- and Scale-Ups often inherit risk.
🗂️ Structure
A well-defined structure is paramount for a FZul project, encompassing systematic planning and the aspiration to yield reproducible outcomes. To satisfy this criterion, applications must include a comprehensive work plan delineating requisite steps and budgets essential for successful project completion. While ventures tend to plan more spontaneously, most Start- and Scale-Ups possess detailed information about their financials and product development, usually in the form of financial models and product roadmaps/ pitch decks.