Programme line aws Preseed | Seedfinancing - Deep Tech "Module Seedfinancing - Deep Tech"

The maximum funding amount was increased to EUR 889,000, and up to EUR 1,000,000 if the gender bonus is applied.
The gender bonus has been made available for a more diverse constellation of ownership structures and funding amounts. Under certain circumstances, an additional EUR 500 per month can be claimed as personnel costs for the care of children of full-time shareholders.
The highest funding intensity ("funding rate") is now 80% and up to 90% if the gender bonus is applied.
To apply for the Seedfinancing - Deep Tech module, a company must be founded.
Other significant changes relate to the clarification of the repayment conditions.

What is the objective of the Seedfinancing - Deep Tech module? 
The aim is to enable young, innovative tech companies with outstanding product ideas and economically highly scalable business models to achieve sustainable growth based on a significant technological leap in innovation by international standards.The funding is thematically open to all technology areas such as life sciences (biotech, pharmaceuticals, medical devices), Green technologies (Green Tech and Tech for Green) as well as information and communication technologies and engineering/physical sciences. Typically, funded start-up teams are characterised by outstanding STEM (science, technology, engineering, mathematics) skills and entrepreneurial talent. 

Gender Bonus:
The new gender bonus affects both the amount of funding and the funding intensity ("funding rate"):

• The gender bonus can be claimed by founding teams with more than 25% of their shares held by female employees. The share can also be represented by several shares held by female employees. Details can be found in the programme document.
• If the gender bonus applies, the funding intensity is a maximum of 90%, without the gender bonus a maximum of 80%.

This is accompanied by the equity requirement: for the gender bonus, this is at least 5% of the eligible costs in cash, otherwise 10% in cash. The remaining equity can be provided from cash flow or other monetary sources. Other public national or EU subsidies, services such as working hours or salary waivers as well as short-term loans are not recognised as own funds.
 

What is a deep tech start-up as defined in the Seed Financing - Deep Tech module?
 The business models of deep tech or high-tech start-ups are based on substantial advances in scientific knowledge and time-consuming in-house high-tech development work, which are associated with significant technological risks and exceptionally high investment requirements. The company must be in a position to sustainably expand and secure its competitive position on the basis of its outstanding international technological lead, secured by patents, licences and/or other protection options. There is no restriction in terms of technology areas. Typically, funded start-up teams are characterised by outstanding STEM (science, technology, engineering, mathematics) skills and entrepreneurial talent. 
 

What legal form can an aws Seedfinancing - Deep Tech company take?
Any appropriate Austrian legal form (OGG, KG, GmbH, FlexKap, AG) is possible. An annual financial statement in accordance with the Austrian Commercial Code (UGB) is required from the year of the first funding disbursement at the latest. The beneficiary must be an independent small company. This means that there must be no decisive influence (in terms of form or content) from other companies. The condition of a small company within the meaning of the SME definition must be met. This is checked by Austria Wirtschaftsservice GmbH (aws) on a case-by-case basis.
 

I have been running a company for years, can I still apply for Seedfinancing - DeepTech in principle or in which constellations?
 Entrepreneurial experience is generally desirable. As Seedfinancing - Deep Tech funding is aimed at young companies (not older than 5 years when the funding agreement is concluded), it is necessary to assess the respective situation. If, for example, a sole proprietorship has been incorporated into a GmbH/FlexKap/AG, the date of foundation of the sole proprietorship is decisive. Similarly, the founding of a new subsidiary or sister company of an existing company by the same shareholders is not sufficient to have the status of a "new company" under EU state aid law.
 

How are companies with the same shareholders or otherwise interlinked companies abroad taken into account?
 Basically analogue to companies in Austria.
 

Is it possible to receive seed financing - deep tech funding if you are bringing an internationally established business model or technology to Austria/Europe for the first time?
 No, a significant technological innovation leap is no longer possible in an international comparison.

How can I apply for aws Seedfinancing Deep Tech?
The page for submitting applications can be found at aws fördermanager. It is an electronic submission. If you require technical support, please use the contact number +43 1 50175-110.
 

How detailed does the application form need to be?
You will be guided through the fields required for the application. A complete application includes the application form, as well as a detailed business plan including financial planning (see corresponding presentation below) and proof of identity of managing directors and shareholders with more than 25% of the shares as well as detailed CVs of the founders and key persons in the company.

The information in the application form can be kept brief; the initial information must contain qualitative conclusions about the technology, the differentiation from the state of the art and the targeted market. All attachments must be submitted to the Funding Manager before the application is sent. Only complete applications will be processed.

After the initial assessment, the due diligence process begins, in which the available documents are reviewed in consultation with the applicant company in accordance with the programme criteria. This is usually an iterative process in close dialogue with the applicant company.ts.
 

Do I have to have already founded a company to apply for Seedfinancing - Deep Tech?
The establishment of a company is a prerequisite for the application. Irrespective of this, the relevant legal provisions apply when starting an entrepreneurial activity.
 

What are the requirements for the business plan and the budget? 
The business plan is the basis for the detailed due diligence review.

The completeness of the business plan is one of the prerequisites for the granting of funding; the order is not binding.

• Presentation of the current customer problem
• Solution to the customer's problem: Explanation of how the customer's specific problem is solved
• Product: detailed description and target specification of the product (data sheet, feature list, ...)
• Technology: comprehensive presentation of the technology, the development risk and the significant technological innovation leap in an international comparison.
• Unique selling proposition/USP: Presentation of the added value of the products or services compared to the international competition
• Business model: how will the company earn money (e.g. product sales, service sales, leasing, licensing, regular or one-off services, etc.)?
• Market: comprehensive presentation of the international market situation in the addressed market segment, backed up with figures and sources
• Competition: comprehensive presentation of the international competition (competitors, products, differentiation from the company's planned product) documented with figures and sources
• Sales strategy: through which channels and with which methods are sales planned?
• Environmental impact, sustainability and social aspects:
   The environmental impact, sustainability and social aspects of the company should be analysed. The EU's Green Deal and the UN's Sustainable Development Goals should be used as references.
• Property rights: FTO analyses, patent applications, licences, trademark rights or other property rights strategies
• Team and personnel strategy: Presentation of the team, technical-scientific and entrepreneurial competences, experience, responsibilities and the time and financial commitment of the members of the founding team as well as personnel planning must be presented. Among other things, reference should be made to the implementation of equal rights for all genders in the planned company.
• Current status and milestones and key objectives achieved to date: Explanation of the current state of development of the technology and the company
• Development plan: Presentation of further development along the time axis with technical and financial milestones
• Financial plan: Presentation of the company's overall financing and current financing partners. The budget should break down sales by sales type (e.g. product sales, services, licence revenue, etc.) and also show the key elements of the company's typical expense structure. A monthly presentation is necessary for the first 12-24 months, after which semi-annual or annual presentations can be used.
• Sources and authorship in the preparation of the business plan: Please cite sources for key content (studies, market data, graphics). Automatically generated content in the application or business plan is in any case an external source to be cited.
• The authorship of the business plan must also be disclosed.

Is the budgeted calculation for two years sufficient?
No, the budget should cover 4 - 5 years. Even if the planning uncertainties in the seed and start-up phase are great, a four to five-year plan is a working hypothesis that must be continuously honed as the company develops.

According to which Austrian and EU guidelines is the funding organised?
Subsidies in the European Union are subject to extensive legal regulations. Austria Wirtschaftsservice GmbH (aws) is bound by these rules.

The aws "Preseed | Seedfinancing Programme to promote the establishment and development of innovative companies 2024 - 2026" programme is based on point 3 of the guideline for Austria Wirtschaftsservice GmbH for the promotion of technology and innovation of 01.01.2024 ("AWS T&I Guideline")

The "Seedfinancing - Deep-Tech" programme module is based on Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty on the Functioning of the European Union, OJ L 187 of 26.06.2014, as last amended by Regulation (EU) 2023/1315 of 23 June 2023, OJ L 167 of 30.06.2023 (General Block Exemption Regulation, in short: GBER); in particular Art. 22 and Art. 28;

In addition, there are Austrian laws and regulations to which reference is made in the programme document.
 

Is Seedfinancing - Deep Tech a „De-minimis“ funding?
No. Seedfinancing - Deep Tech funding consists of a monetary and an advisory component, both parts are not counted towards the "de minimis" amounts. In exceptional cases (e.g. if the company is more than three years old), the consultancy component can be granted as de minimis funding.

What is the funding intensity?
Funding intensity (also "funding rate") is the proportion (cash value) of the respective funding to the (partial) project costs. In the Seedfinancing - Deep Tech module, the maximum funding intensity is set at 80%, and up to 90% if the gender bonus is applied.
 

What is the cash value?
The cash value describes the benefit of a grant expressed in monetary terms, taking into account financial mathematical methods (discounting) and risk assessment. A grant usually has a present value of 100%, while a loan or guarantee has a significantly lower present value depending on the repayment conditions. The Seedfinancing - Deep Tech grant has a cash value of 100%. 

Can Seedfinancing - Deep Tech funding be recognised as equity in the sense of other funding campaigns?
Seedfinancing - Deep Tech is a public funding programme. Therefore, this funding contribution itself cannot be recognised as an own contribution or complementary equity financing for other funding schemes that finance, for example, 50% of the project costs. Such contributions must be financed by other, private capital (e.g. own funds, long-term shareholder loans, loans, company profits). However, proof of sufficient overall financing (in compliance with the respective funding intensities) is possible with the inclusion of Seedfinancing Deep-Tech.

Presentation of financing and costs:

The financing of a typical company supported in the Seedfinancing - Deep Tech module is made up of, for example

1. Seedfinancing project consisting of 
   a) Seedfinancing - Deep Tech funding
   b) Project-specific equity (min. 5-10%, depending on the application of the gender bonus). Usually within the framework of point 2. 
   c) Cash flow from sales (= internal financing) or other financing (e.g. long-term loans).
2. Additional equity capital (founders or business angels or VC or...)
3. Further funding project if applicable (can be differentiated from 1.)
4. Long-term financing, convertible loans, if applicable
5. Turnover
6. EIC or other EU funding

Equity contribution means funds that flow into the company in cash and qualify as equity in the balance sheet in accordance with the Austrian Commercial Code.

Equity of the founders: Here, the payment comes directly from those who usually hold the most shares and therefore have the highest profit entitlement.

This is offset by the company's costs, which are (partially) subsidised.

Eligible costs" are understood to be those costs that are directly part of the project to be financed. In this context, the term "total costs" used in the programme document also refers to "eligible costs".

Personnel costs include gross salaries as well as salary-related taxes and other mandatory costs such as municipal tax etc. ("ancillary labour costs"). For the purposes of the programme document, remuneration to partners agreed in the funding agreement in the form of withdrawals (partnerships) or fees (if there is no employment) are eligible for funding in the same way as personnel costs.

Please note: Individual cost items (receipts) may only be claimed as part of a single grant, otherwise this constitutes unauthorised double funding.
 

Can I have my own work recognised as own funds in the Seedfinancing - Deep Tech module?
No, the minimum own contribution of the founders is set at 20%, at least 10% must be contributed in cash. Up to 10% can be provided from cash flow or other private monetary sources.

When applying the gender bonus, the own contribution is at least 10%, at least 5% can be provided from cash flow or other monetary sources.

Other public national or EU subsidies, in-kind contributions such as working hours or salary waivers as well as contributions in kind and short-term loans are not recognised as own funds.
 

Can I have the working time for which I receive remuneration from the Seedfinancing - Deep Tech funding counted as my "own contribution" for other funding programmes?
No, as that would be an impermissible double grant.
 

Why is the entrepreneur or team of entrepreneurs so important?
Start-up companies, especially those in the high-tech sector, embody both immense risks and vast opportunities. Entrepreneurial success and failure is highly dependent on management. For this reason, when selecting start-up projects, great importance is attached to an experienced, competent, networked, time and financially committed start-up team that is willing to take risks.
 

Why do founders have to contribute cash to the company?
The management of the company (and thus the influence on the increase in value) is in the hands of the founders. High increases in the value of companies are possible and also likely. Adequate risk sharing is therefore essential. Depending on the composition of the founding team, at least 20% (10% if the gender bonus is applied) of the project costs applied for must be raised by the company's shareholders as their own funds. Up to 10% (5% if the gender bonus is applied) can be provided from cash flow or other monetary sources.
 

Can the founder receive remuneration?
The remuneration is determined in the context of the economical use of Seedfinancing - Deep Tech funds. The upper limit for companies funded in the Seedfinancing - Deep Tech module in the initial phase is the current senior post-doc rate of the FWF (personnel cost rates). If the public sector's share of funding falls below 50%, the upper limit for withdrawals increases. In principle, the monetary interest of the founders should be orientated towards increasing the value of the company. 
 

In the case of seed financing - deep tech funding, can you also be a part-time entrepreneur, i.e. can you also have another job?
The successful development of a company requires all available resources, which is why secondary employment is not permitted. This does not apply to minor activities as long as they do not represent a conflict of interest. Minor activities must be disclosed.

How long does it take to receive aws Seedfinancing - Deep Tech funding?
The timeframe is comparable to a typical Austrian venture capital financing programme. From the time that meaningful and complete documentation is available, a due diligence phase of 3 months on average can be expected, assuming the availability of budget funds and a positive recommendation from the jury.

What is the role of the jury?
The members of the jury have many years of entrepreneurial and/or scientific experience and at the same time knowledge of the imponderables of founding a company in the deep tech and high technology sector. Many of the potential bottlenecks along the company's development path can be recognised by the members of the panel. Advice or conditions in this regard are provided as part of any funding recommendation. 

Presentation of the jury

Why are the tranche payments milestone-based?
There are many risks in the seed and start-up phase. The targeted agreement of interim targets enables a meaningful development and ongoing assessment of the start-up project.

Does Austria Wirtschaftsservice GmbH (aws) receive shares in the company in the course of Seedfinancing - Deep Tech?
No. However, Austria Wirtschaftsservice GmbH (aws) reserves extensive rights to audit and inspect the company's activities in order to ensure that the funds are used in accordance with the subsidy programme. As the interests of aws Seedfinancing - Deep-Tech are similar to those of an equity investor, major business decisions and significant changes, e.g. in the shareholder structure, must be agreed in advance with Austria Wirtschaftsservice GmbH (aws).

Can a company that is already financed by a VC (venture capitalist, institutional venture capitalist) also receive Seedfinancing - Deep Tech?
In view of the limited venture capital funds available in the early stages in Austria, companies that are already financed by institutional venture capital can also be financed by Seedfinancing - Deep Tech, provided that the VC financing paid in was less than EUR 2 million. However, seed financing - deep tech funding typically takes place before VC financing. In addition, it must be plausible that the project cannot be realised in the planned form without aws Seedfinancing - Deep Tech funding.

Why is the funding "conditionally repayable"?
 In terms of the economical and appropriate use of funds, the funding must be repaid in those cases in which the company is successful after the funding has been provided. A successful sale - for the shareholders - or sustained positive company results are a reason to repay the funding, taking into account the company's liquidity.

If at the end of the agreed funding period (project term plus five-year observation period) no "business success" has occurred or the company has not been sold, the contract ends and no further repayment is due.

What happens when new shareholders join the company or shareholders leave?
aws must be demonstrably informed within two weeks of the addition of new shareholders or a change of shareholders. If this leads to a change of control, an agreement must be reached with aws in advance. CVs and proof of identity of the new shareholders must be submitted to aws.

With regard to the criteria for the repayment of the funding, all shareholders must agree to the key points of the Seedfinancing - Deep Tech contract.

If shareholders receive money through the sale of shares, seed financing must also be repaid in the amount of this inflow of funds.

When and how must the subsidy be repaid?
Variant 1: If profit is realised: In the event of a positive net profit for the year in accordance with the Austrian Commercial Code (UGB) during the term of the contract, a repayment is due six months after the balance sheet date. It amounts to 50% of the net profit for the year in accordance with § 231 UGB. The annual financial statements must be prepared in accordance with the provisions of the UGB. This regulation also applies mutatis mutandis to partnerships and sole proprietorships as well as subsidiaries.

Variant 2: If the company is sold: If the company or shares are sold in part or in full, the funding must be repaid. As a rule of thumb: If the shareholders receive money (apart from the agreed withdrawals to cover living expenses), then the repayment of Seedfinancing - Deep Tech must also be made. Company sales must be reported to aws in good time and approved by aws.

In the event of serious breaches of contract, the subsidy must be repaid with interest.

What happens when founding shareholders leave the company?
The rule of thumb from above also applies here: If an owner receives money, Seedfinancing - Deep Tech should also be repaid accordingly.

What happens if the company is sold?
The necessary repayment of the subsidy must be taken into account in advance.

Do the founders have to submit a personal liability declaration?
The personal liability declaration applies in the event that the company or significant assets are sold without repayment of the Seedfinancing - Deep Tech grant. For other cases of liability, the existing statutory regulations apply. Founders with company shares of 10% or more must join the Seedfinancing - Deep Tech agreement and thus be personally liable for certain circumstances.

How can the Seedfinancing - Deep Tech grant be recognised in the balance sheet?
 The Seedfinancing - Deep Tech module is structured as a grant with a conditional repayment obligation.

An obligation to repay the grant arises in the event and at the time of fulfilment of one of the clawback criteria in accordance with the underlying funding guideline and the programme document. This is therefore a repayment obligation subject to a condition precedent. Please refer to AFRAC Statement No. 6, margin no. 34 for information on accounting for grants with a conditional repayment obligation:

"In the case of grants with a conditional repayment obligation, the repayment obligation arises upon fulfilment of the defined condition(s). Until the condition(s) is/are met, the grant is to be classified as non-repayable and recognised in accordance with the general explanations. If the repayment obligation arises, the repayment amount must be recognised or reclassified as a liability using the portion of the grant not yet recognised in profit or loss."

Please refer to margin no. 30 of the above-mentioned statement for general accounting of expense subsidies:

"Grants to cover expenses must be recognised in profit or loss as incurred, whereby either recognition as "miscellaneous other operating income" or an open deduction from the respective expense (in a preliminary column) is permitted. A reduction of the expense covered by the grant is not permitted due to the prohibition on offsetting in accordance with Section 196 (2) UGB."

Source: AFRAC Opinion 6 Grants in the public sector (UGB), (December 2015), margin nos. 30 and 34

The subsidised company is ultimately responsible for the individual accounting treatment. It is recommended that you consult your trusted tax advisor or auditor in this regard.

Which expenses are NOT eligible for funding?
 The following are not eligible for funding: Expenses that are not related to a technology project in terms of content (e.g. food, other expenses with a strong connection to "personal lifestyle"), expenses that have already been claimed for other grants; expenses that cannot be recognised as operating expenses within the meaning of the Income Tax Act; expenses that do not comply with the principle of economy and expediency; travel expenses that do not comply with the federal government's business travel regulations; invoices under EUR 50 excluding VAT. In the case of investments, only the pro rata amortisation (depreciation) in the project period can be claimed as eligible costs.

What do I need to bear in mind when invoicing?
 Funding is settled on the basis of proven costs. 100% of the project costs, including the necessary own contribution, must be proven.

There is a billing guide and a billing form ("proof of costs") for this purpose, which must be completed accurately and correctly. It is advisable to keep this list up to date from the start of the project. Each invoice must be accompanied by proof of payment or proof of the flow of funds (e.g. bank statement). Only eligible costs may be invoiced. Funding recipients usually contact tax consultants or chartered accountants for support in this regard.

Example (without gender bonus): With eligible costs of EUR 600,000 and an 80% funding rate, the funding would amount to a maximum of EUR 540,000. Proof of costs of EUR 600,000 would have to be provided.

In order to avoid reductions, it is therefore recommended to provide evidence of approximately 10% higher costs. Costs included in this proof of costs must not be subsidised by other grants and must not be financed by lump-sum cost coverage from other grants. At least half of the 20% own contribution must be covered by equity contributions and half by other contributions that are not subsidies. Ideally, 20% of the project costs should be available in the form of equity contributions.

Further details and important information can be found in the billing guide

Can vehicles be purchased?
 The purchase of a vehicle from Seedfinancing - Deep Tech funds is not permitted. Renting or leasing is possible, provided it is economical, appropriate and authorised within the framework of the business plan.

What other financing options are available?
A distinction must be made between equity capital, debt capital and other funding. The websites aws connect and Förderpilot offer help in finding additional financing options.