GreenUpInvest: Better financing terms for green start-ups in Germany

Green Start-Up Investment Alliance

Financial service providers believe that start-ups always constitute a risk. But why do green start-ups often find it more difficult to raise funds? What sort of funding does sustainable entrepreneurship need? How can financing terms be improved? And how can environmental and climate protection be facilitated by supporting start-up entrepreneurs? This practice oriented project addressed these questions.

Developing and bringing sustainable, radical innovations to market takes time and for many investors it simply takes too long. Their short-term profit expectations are not in sync with what can sometimes be the very long-term benefits of green products and services to society as a whole. But green start-ups also face other problems on the road to securing funds.

The GreenUpInvest project therefore first analyzed the obstacles and identified the potentials of early-stage financing for green start-ups as well as green start-up funding.

Following on from this, a wide range of practice-oriented networking activities were initiated with the relevant partners – the Bundesverband Deutsche Startups (German Startups Association), Business Angels Network Germany and the Forum Nachhaltige Geldanlagen (Sustainable Investment Forum) – to facilitate the coming together of investors and green startups in practice.

Results from GreenUpInvest:

To improve networking and exchange among green startups, the Green Startups Network platform was created in the German Startups Association. This was filled with life through recurring formats including Green Startups Breakfast and Green Startups Camp.
The Manual for the sustainability assessment of start-ups: A practical tool for start-up teams, investors and funding organizations was developed with the Forum Nachhaltige Geldanlagen and established in practice with relevant network partners. It provides investors with an extended basis for financing decisions, in which not only monetary but also sustainable (environmental, social and good corporate governance) consequences of the start-up activity can be evaluated. It also provides startups with a tool for self-evaluating their sustainability potential.
A high-quality matching format that is in high demand – high-level matching – was developed and established with the Business Angels Netzwerk Deutschland. During the two meetings planned in the project, 242 investors, founders and multipliers took part.
In order to make the financing market for green start-ups somewhat more transparent than it was at the beginning of the project, online offerings on StartGreen were developed and the corresponding content continuously expanded. This also includes results from other activities in the project. Among other things, the following content can be found here: Green Deals done in Germany and abroad, profile extensions on financing issues for both startups and investors, and best practices in financing for green startups.
As a further orientation for green start-ups, a market overview in the form of the brochure Financing Opportunities for Green Start-ups was published as a condensed practical introduction.
As the capital requirements for many green start-ups can be very high at an early stage, the project published a Best Practice Guide on Syndication for interested investors. By syndicating and pooling early-stage green economy investments, investors can pool their resources and reduce their own risk.
In order to map and compare funding trends and developments over time, the Green Start-up Investment Monitor was developed. This contributes to more transparency in a relatively non-transparent environment. Current figures can be found in the special evaluation of the Green Economy Start-up Monitor 2017 as well as on the financing pages of StartGreen. A continuation of these monitoring activities will take place as part of the Green Startup Monitor from 2019.
The final report for GreenUpInvest presents the activities in the project in a concise manner and includes research findings, recommendations to policy makers as well as an overview of the continuation of the network activities beyond the duration of the project.

The German Council for Sustainable Development has awarded the project the “Werkstatt N” (“Studio N”) quality seal. This is awarded for trend-setting ideas and projects that bring sustainable thinking and action to life.