AWS Risikokapitalprämie: “Kick-Back” for Early Stage Investors

02 January 2017,   By   

2017 starts with very good news for national and international Start-up Investors. As of January 1st the Austrian Wirtschaftsservice (AWS – Austria’s federal promotion bank) provides a new risk capital initiative (Risikokapitalprämie) or „kick-back“ for investors, who invest in Austrian Startups.

Investors may receive up to 20% “kick-back” (immediate cash) from their investment of up to a maximum of EUR 250.000 per year, thus receiving a maximum “kick-back” of EUR 50.000 per year. This incentive is open for private investors, their private holding companies or family offices, but not for funds (which might be difficult to discern in some cases) as long as they are not publically listed. In terms of income and capital gains tax, this kick-back will most likely be considered tax neutral, similarly to other grant schemes – however, we do advise you to consult your tax advisor for specifics and validation for your specific case.

 

A lean 3 steps application process for AWS Risikokapitalprämie

First step: Investors will need to apply for the investment grant on the AWS web page directly – at the so-called AWS Fördermanager – before an investor is about to finalize an investment. You may have been signing a term sheet, but have not signed the final shareholder agreement nor closed the deal before this application.

Note: The AWS Fördermanager is only available in German but we are hello( replace these parenthesis by @ )venionaire.com.

 

Second step: Unless the startup has already been certified and possesses an identification number, a startup will have to undertake a so-called “Selbsttest”, a specific quick check on the AWS Fördermanager immediately, after an investor’s application. The startup should thus be prepared to hand in certain documents. This could be

  • a business plan with proof of the market innovation (ie. providing pending patent applications),
  • gained traction such as received risk capital in the past, a growing number of employees or a significant revenue growth projected,
  • in addition/alternatively, a startup may refer to other grants of AWS or FFG received before this application.

 

[UPDATE 05.02.2019. The AWS page concerning the Risikokapitalprämie is not reachable anymore]

Third step: After the positive evaluation by the AWS, certified startups receive an identification number. The investor submits this ID together with a signed participation agreement and a transfer voucher of the amount invested. We have as of yet, how AWS will deal with investments other than cash (e.g. work for equity, media for equity, provided materials or any other kind of resources). We assume, that those will be treated similarly to other AWS programs – such as “double equity”, which have been considering those non-cash (at least a few types) investments in the past.

Several investors, within specific financing round, may apply for this “AWS Risikokapitalprämie” program. Trustors or other types of syndication vehicles should be also eligible for the grant if the participation chain is disclosed to the AWS. We would advise in this special case to consult AWS directly for clarification.

Good news for Austrian as a startup hub

Looking at comparable programs in neighbouring countries, we expect this new initiative (AWS Risikokapitalprämie) to attract more international investors to invest in Austrian Start-ups. We are looking forward to promoting a higher number of syndicated pan-European investments through the European Super Angels Club, where Business Angels, Family Offices, and (U)HNWIs will profit from this initiative in Austria.