EXIST (support for graduates, scientists, students in preparing technology- and knowledge-based start-ups)

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The EXIST Business Startup Grant is a support program run by the German Federal Ministry for Economic Affairs and Energy that is designed to fund early-stage start-ups emerging from universities and research institutes.
What are the main aims and objectives?

The primary aim of the EXIST Start-Up program is to foster an innovative and entrepreneurial environment within universities and research institutes in Germany. The program seeks to support early-stage startups in the fields of science and technology by providing critical resources such as funding, coaching, and child benefit. Specific objectives include: 

  1. Establish a culture of entrepreneurship in university teaching, research and management for the long term. 

  1. Consistently translate the findings of academic research into economic value – also for the purpose of the technology transfer mandate for universities as set forth in Section 2 Para. 7 of the German Higher Education Framework Act (HRG). 

  1. Promote the huge potential for business ideas and entrepreneurs at universities and research institutions in a targeted manner. 

  1. Significantly increase the number of innovative business start-ups and create secure new jobs in the process  

Ultimately, the program aims to bridge the gap between academic research and the commercial market, fostering cooperation, exchange, and the development of a robust technological business landscape. 

How does the program work?

The EXIST program works through a process of application, selection, and funding. Potential candidates with innovative ideas and a strong unique selling proposition are encouraged to apply for the program. The applicants must meet the program's criteria, as their ideas are evaluated for feasibility and potential for success. 

Once selected, startups receive support in the form of funding, which can be up to €30,000 for material expenses. This financial aid is part of the program's aim to foster an innovative and entrepreneurial environment within universities and research institutes. 

In addition to financial support, startups also receive mentoring, education/training, and networking opportunities to help them grow and gain market traction. These resources provided by the EXIST program help bridge the gap between academic research and the commercial market, ultimately leading to the creation of successful, technology-oriented startups. 

The EXIST programme comprises three schemes: 

EXIST Culture of Entrepreneurship supports universities in formulating and implementing a comprehensive and sustained university-wide strategy for increasing entrepreneurial culture and spirit. A bustling culture of entrepreneurship at the university is not only characterised by entrepreneurial and realistic range of courses and consulting services or detailed entrepreneurial research. 

EXIST Business Start-up Grant supports students, graduates and scientists from universities and research institutes who want to turn their business idea into a business plan. The start-up projects should be innovative technology or knowledge-based projects with significant unique features and good commercial prospects of success. 

EXIST Transfer of Research funds both the resource development necessary to prove the technical feasibility of start-up ideas based on research and the preparation necessary to launch a business. EXIST Transfer of Research supports outstanding research-oriented projects that involve expensive and high-risk resource development. 

What is the overall cost?
The EXIST program is funded by the German Federal Ministry for Economic Affairs and Energy (BMWi). It's also co-financed by funds from the European Social. It received €137.3 million from 2007 to the end of 2016. 
How was it implemented?

The EXIST program was launched in 1998 and is run by German Federal Ministry for Economic Affairs and Energy (BMWi). The fact that EXIST exists for quite a long time now proves that it is a successful programme. Nevertheless, EXIST can be referred to as a "learning programme", as there have been a lot of changes in the programme since its start in 1998, always adapting it to new circumstances.  

The concept of EXIST was based on the BioRegio competition which was launched in 1995. This provided for the strengthening of regional infrastructure for companies in the biotechnical industry. The BioRegio competition became a model for subsequent policies, the majority of which were ended after a few years. By contrast the German funding system has no other program like EXIST which has the longest duration of any funding scheme for startups.  

When EXIST was launched, the priority was to encourage a culture of communication and cooperation within a region and to structurally link universities and research institutions with their regional environment (forming networks to support start-ups, including universities as members of the regional system of innovation). 

The EXIST funding approach is based around six elements that integrate elements of technological, company and regional funding, and networks which promote innovation. 

  1. Promoting networking: stronger networks between universities and institutions in the region 

  1. Promoting integration: participation of institutions that represent large sections of the value chain 

  1. Promoting a favourable climate: emphasising that an environment which promotes innovation is crucial in order to achieve success 

  1. Promoting motivation: increasing the motivation of students and academic employees to become entrepreneurs  

  1. Promoting skills training and qualifications: consolidating the qualifications gained in higher education and promoting further training 

  1. Promoting consultation: creating services for support and advice where both are provided for people launching startups and are tailored to the specific requirements of spin-offs from universities and research institutions.   

What impact has been measured?

A review of the EXIST found that from a representative sample of 1,163 funded projects between 2007-2014: 

  • 871 new companies had been founded at a rate of 74.9% of all projects 

  • The start-up rate increases continuously with the amount of funding: Of the 90 projects with a funding amount of less than €50,000, 70.0% led to a start-up, of the 111 projects with more than 100,000 € it is 82.0%. Most projects (689) were supported with 75,000 to under €100,000. 

  • Of the 871 new companies formed, 645 had survived (a rate of 74.1%) 

  • This equates to 55.5% of the original 1,163 funded projects 

What lessons can be learned?

One of the specific characteristics of EXIST is the emphasis the program places on implementing its measures before the moment the entrepreneur starts the process of founding the company. The first step – before any plans are supported – is to raise awareness amongst students and university staff in order to motivate and prepare them with the skills they need. Additionally, a wide range of advice, coaching and access to equipment is available at this stage.  

A report in 2013 emphasised that the impact of the program can only be judged after a very long period of time as it is geared towards developing a culture of entrepreneurship in teaching, researching and administration that will ultimately produce a more stimulating entrepreneurial environment within universities. Consequently it is difficult for short-term metrics to pick up this type of impact.  

The sustainability of EXIST funding reportedly proved difficult in the beginning stages of the program but since then a study by Fraunhofer ISI found that, in all of the 117 universities receiving EXIST funding since 1998, significant progress has been made on the path toward achieving a culture of entrepreneurship in teaching, research and administration in the various departments. 

CURATED BY

Sonja Alt

Project Management
KfW Stiftung
Germany