TATEN-Bank

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Consider Grants When Raising a First Funding Round in Styria

Hannes Meixner / Startups & Investor Network at TATEN-Bank Martina Hölzl / Startups & Public Funding at TATEN-Bank

Banking

During the first few years of starting a company, founders are generally actively involved in building the business, covering roles in business and product development, sales, or technology. This doesn’t leave a lot of time for fundraising, which is an incredibly time-consuming process. When having cash in the bank can make or break a startup, as can happen during the first few years, having someone who knows what a startup’s funding options are can be invaluable. This is what Martina Hölzl and Hannes Meixner hope TATEN-Bank can be to Styrian-based startups: a financial partner for building innovative businesses, creating jobs and boosting the economic development of the region.

Martina began her career working with a Swiss investor and then with a local energy partner where she built a startup program. At TATEN-Bank, she is responsible for building up the startup ecosystem around the bank. Hannes has twenty years of experience in banking and is responsible for innovating the bank, which includes cooperating closely with startups.

Hannes explains that the private-funding landscape for early-stage startups in Austria is predominantly composed of individual angel investors as opposed to early-stage venture capitalists. This can have a large impact on how founders approach their fundraising strategy, as angel investors may have different interests and criteria for funding a company.

According to Hannes, when raising the first round of funding, founders must have a good understanding of the problem they are solving. “To me, the most important topics are the sort of problem you are solving, how much you have researched your problem and how much time you invested to understand what the problem of your customer is,” he says. The second most important question investors will have is about the team. “Do you really trust the team to come up with a solution to the problem? Will they be able to pivot if they hit a dead end?” he asks, adding that at the early stages, investors are less concerned with the solution and more with the team’s ability and track record of successfully working together.

Most important tips for startups:

Understand the problem you’re solving. Don’t start with the solution, but rather understand who faces this problem and how it impacts their lives.

Have an enthusiastic team. Your core team should be excited about what you are building, have complementary expertise and be ready to pivot if needed.

Look for financing options beyond private investors. Austria has a large number of grants available for early and growth startups, and banks can be fantastic partners for building scalable businesses.

Be radically open. Your passion for the problem you’re solving and belief in your team to deliver the solution should drive you but also keep you open to feedback from advisors, customers and the market.

About

TATEN-Bank is a wholly owned subsidiary of Raiffeisen-Landesbank Steiermark. TATEN-Bank aims to support startups from the idea stage through to international expansion. They provide startup-friendly bank accounts for companies just starting up and loans for growing businesses.

Martina explains that beyond private investors, Austria has a number of grants and subsidized loans available to startups for both product development and go-to-market initiatives on a regional and national level. Within Styria, the Economic Department of the City of Graz provides grants to create affordable office space for new startups. Additionally, they can help international startups set up offices in the city. Another provider is the Styrian Business Promotion Agency (SFG), a subsidiary of the Province of Styria, that aims to be a one-stop-shop for all businesses in the Styrian region. They provide grants of between sixty to eighty percent of a company’s product-development project cost. SFG can also invest directly in companies with the option for founders to buy back the shares in a few years’ time, which, Martina says, is something unique in Austria.

On the national level, the Austrian Research Promotion Agency (FFG) and Austria Wirtschaftsservice (aws) are the two main funding providers for grants. “It depends on the business model,” she says, “but there are lots of cost blocks that can be funded in the early stages.” At the later stages, aws also provides guaranteed loans, meaning that in the case of a company’s closure, they will cover a percentage of the loan, making it less risky for banks to provide loans.

Both Martina and Hannes agree that because of the large number of possibilities available to startups, early-stage companies in Austria should look into the grant offerings when planning to raise their first round of funding. There are a large number of consultancies and agencies that can help startups find the right grants available to them. Martina and Hannes also suggest working with a bank that has experience supporting startups, such as TATEN-Bank, which can provide loans with startup-friendly terms; for example, longer repayment timeframes and access to a network that supports companies as they grow.

[Contact] Email: taten-bank@rlbstmk.at Telephone: +43 664 85 50 012

Do you really trust the team to come up with a solution to the problem? Will they be able to pivot if they hit a dead end?

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