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Fast, agile, innovative? Check. But what about the financing?

Startups. Brimming with enthusiasm, creativity, entrepreneurship and impatience to get underway. And if the banks won't touch them, they might just get the financial and practical support they need from an accelerator program or incubator.

07 Mar. 2016
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In Germany, young entrepreneurs could easily drown in offers of grants and development support. So how do they go about finding support that fits their ideas and team? Well, the country has numerous programs available at federal and state level, including the EXIST Business Start-up Grant and the KfW startup loan . And now it is also seeing a rise in private-sector providers interested in fostering good ideas and innovative business models not just with money, but with know-how and mentoring as well.

These are the accelerator and incubator programs. Aimed primarily at early-stage entrepreneurs, they are a win-win model designed to benefit both startup and provider. They offer intensive mentoring and support over a fixed period, by the end of which the fledgling business idea should ideally be market ready.

Bosch Car Multimedia: startups wanted

It is with this aim in mind that Bosch Car Multimedia has set up an incubator subsidiary, BeYond GmbH, to prospect for strategic partnerships with startups. CEO Arif Hatip explains: "Short-term acceleration periods of six to twelve weeks are of no use to us. The purpose of our incubator program is to enable entrepreneurs with sound, promising ideas to achieve long-term success. That is why our model comprises three milestones and can run for up to three years or even longer." BeYond is about forging relationships between startups and established corporations - by means of partnership with Bosch Car Multimedia or its customers from the automotive industry, for instance. "Very few startups are aware of the extreme quality and performance hoops their solutions have to jump through before auto makers will consider implementing them in their cars," Hatip says. "In the case of startups and early-stage companies based on site at Bosch Car Multimedia, we also work closely with the Lower Saxony state government – via its development bank Nbank – and our local district government here in Hildesheim."

For BeYond, the primary consideration in selecting startups is to achieve the right thematic fit. In-vehicle infotainment has changed dramatically over the years. It is an area in which Bosch Car Multimedia wants to position itself as a driver of innovation, which is why it targets young innovators specializing in infotainment and instrumentation, smart mobility, human-machine interaction, data analytics and cloud-based services. "We're not venture capitalists in the conventional sense," Hatip explains. "We offer an integrated program comprising technical advice, close collaboration, capital and infrastructure. We give promising entrepreneurs the opportunity to refine their ideas in partnership with us so that they can successfully launch them on the market." BeYond plans to start working with its first intake of startups before the end of the year.

Digital business models for Deutsche Bahn

German rail operator Deutsche Bahn's mindbox program has a different approach. It is more of an accelerator than an incubator. "The objective of our program is to combine the agility and innovative vigor of young startups with the expertise and experience of Deutsche Bahn and so create something new," explains Deutsche Bahn's Director of Infrastructure Strategy and Programs, Onno Szillis. "Deutsche Bahn needs to become more digital" – an objective the company intends to achieve via its accelerator program, an open-data initiative, and close partnership with developers and creatives. The first accelerator was set up in June last year, and in January this year, the first startups moved into the mindbox - a 700-square-meter office in the historic Jannowitzbrücke railway station in central Berlin.

"In the initial phase we offer an external coach, a Deutsche Bahn mentor, startup finance - and, of course, a great location in the heart of Berlin," Szillis explains. "After three months, we then pick the best ideas and continue to work with them with a view to market launch. In phase three, we look at options for taking a stake in them. That can be anything, from making them a supplier, to joint product development, right the way through to a joint venture." Each startup is judged on its merits.

Winning investors with tried and tested solutions

The Deutsche Bahn accelerator program had initially focused on startups with innovative ideas to do with infrastructure. But as of the start of this year, it is also looking for startups in the areas of mobility and logistics in the broadest sense. The unique benefit of Deutsche Bahn's accelerator program is that startups get to test out their solutions in real-world settings. That way, by the time they go forward to the next round of financing, they already have a major customer they can point to as testimony to the effectiveness of their solution.

Deutsche Bahn will have a presence at Stand F37 at SCALE11 , the showcase for startups in Hall 11 at this year’s CeBIT. SCALE11 features a variety of events, including "speed dating" sessions and a Captain's Dinner, where startups can forge valuable contacts with businesses. They will also be able to present their business plans at the Startup Pitch event.