The VC-Fonds, also called “Kreativwirtschaft Berlin” is a fund that invests in startup companies. The fund creator, the bank IBB, has invested many millions of euros in various startups. It continues to grow with its portfolio companies. One of the most exciting aspects of this VC fund is how they go beyond just funding these companies by offering mentorship programs for their members. This blog post will discuss the benefits of being funded by the Kreativwirtschaft Berlin and some information on what you should do before applying for funding.
What is the VC-Fonds Kreativwirtschaft Berlin?
With the VC-Fonds Kreativwirtschaft Berlin, IBB Ventures invests in startups from various creative industries in the form of venture capital (equity capital) and thus strengthens their public equity base.
IBB Ventures is the umbrella brand for the VC activities of IBB Beteiligungsgesellschaft. Creative Industries Berlin has a fund volume of EUR 40 million, making it the capital market leader in early-stage financing in Berlin. The fund is funded by Investitionsbank Berlin (IBB) and the European Regional Development Fund (ERDF), administered by the State of Berlin. With years of experience in the industry, IBB Ventures is at the forefront of supporting innovative ideas and ambitious founders in Berlin. Since 1997, IBB Ventures has provided approximately EUR 1.43 billion to over 200 Berlin-based creative and technology companies in consortia with VC partners, of which IBB Ventures has invested EUR 200 million as lead, co-lead, or co-investor. There are currently around 70 startups in the portfolio.
How does it work, and what are the benefits?
IBB Ventures participates in the funding, with the fund Kreativwirtschaft Berlin as a minority shareholder. The Initial investments typically range between 250 TEUR and 1 million EUR. In subsequent rounds, the commitment can be increased with existing and/or new investors to a total of up to EUR 4 million, depending on capital requirements and the potential for future rounds.
The granting of participation by the VC Fonds Kreativwirtschaft Berlin is subject to the essential condition that other partners, such as venture capital companies, industrial companies, or business angels, commit at least the same amount as IBB Ventures.
The funding offers startups an excellent opportunity to convince potential institutional investors with confirmation from venture firms, like IBB ventures, as additional capital is available for growth. If additional capital is needed in the growth phase, a financially strong partner is already on board and valuable time can be saved searching for new investors. The VC funding, especially attractive for new companies with limited operating history and strong business skills, can be combined with other funding programs like the Gründungsbonus.
Who can apply for funding?
VC-Fonds Kreativwirtschaft Berlin invests in companies that meet the following investment criteria:
- innovative business models
- high scaling and value enhancement potential
- fit into the focus areas of the creative industries
- companies that have innovative, unique selling points
- founding and management teams with high personal and professional competence
- companies that are still in the early stages; growth financing is only provided in follow-up rounds
- Good medium-term exit opportunities
- The company should be majority-owned by the active shareholders, have its headquarters have its registered office in Berlin, meet the EU criteria for small and medium-sized enterprises, and managed in the legal form of a corporation. In addition, the company must not meet any criteria of the community guidelines on state aid for rescuing and restructuring firms in difficulty.
4 Tips for a successful application
Venture funds are very selective when it comes to choosing suitable startups.
1. Pitch deck
You should be able to present your company and the venture capital investment opportunity in a compelling way. What it is that makes your startup so unique (e.g., promising technology; low costs). In addition to the content and the professional design of a pitch deck – whether created with Canva or with PowerPoint – the pitch deck should be precise and unique. Templates don’t work here.
2. Proven track record
You’ll need to provide evidence of all necessary financial information for funding: income statements, balance sheets, cash flow projections, etc. If you have not filed an annual report or if this data has been audited yet – which would be recommended – then you can submit estimations based on reasonable assumptions to secure initial funding from us.
It is crucial for the success of your application that you can already prove an initial success (e.g. successful funding via Kickstarter or Smoke Test). Otherwise, IBB Ventures will most likely not invest.
3. First impression
The first impression is essential. To have successful funding, you need an initial conversation with the IBB – and this needs to be as professional as possible: dress appropriately for your meeting time; come prepared with some background information on yourself and what you are trying to achieve through VC funding. A letter of intent from a business angel or VC can be beneficial.
4. Know your numbers
VC funding requires a solid financial plan with realistic numbers and projections, and the ability for angel investors to see how they will get their investment back quickly through strong revenue growth. As the potential interviewers are banking people, a solid understanding of terms and financials is essential, along with a well-crafted business plan, to receive positive feedback.
What are the criteria for selecting investments in VC-Fonds?
Investments in VC funds are selected based on criteria such as market potential, scalability, team expertise, and alignment with the fund's focus areas. Companies with innovative solutions addressing market needs, strong growth potential, and a solid business model are more likely to be chosen for investment.
How to submit an application for funding?
Applications for funding from founders can be submitted via email or phone:
030 / 2125-3201
info@ibbventures.de
If the IBB is interested, you will receive an invitation to an initial in-depth interview.
Do you need support with your application or your startup in general? We are happy to help, book a call with us right now!
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