Vienna, 17 July 2012 FMF und Federal Ministry of Economics, Family and Youth (FMEFY) present “young entrepreneurs” scheme Two new “young entrepreneurs” funds (EUR 110 million in total) planned

At the behest of Vice-Chancellor Michael Spingelegger, Austrian Finance Minister Dr Maria Fekter Maria Fekter (together with FMEFY Minister Reinhold Mitterlehner) presented Austria’s new ‘Young Entrepreneurs” scheme today. “When young entrepreneurs are trying to get their businesses started and lack the necessary risk capital, banks are unwilling to provide sufficient credit and business networks are not yet well established, many potentially lucrative businesses will fail to get off the ground”, Austrian Finance Minister Dr Fekter stated. “We have to put better measures in place to prevent this from happening in future, because courageous people with good ideas, who have the wherewithal to implement them, are exactly what Austria needs”, Dr Fekter said. The ‘young entrepreneurs’ scheme focuses on two specific initiatives to provide early-phase financing in order to provide better support to innovative start-up companies, particularly during the initial “getting -off-the-ground” period.

The first initiative is the so-called “Founders’ Fund”. This fund, with an endowment of EUR 65 million, facilitates risk capital financing for young entrepreneurs through the acquisition of equity stakes. The “Founders’ Fund” may acquire a stake of up to 49% in new businesses through investments of from EUR 100,000 up to a maximum of EUR 1,000,000, for instance by purchasing shares in the company outright.

The second, the “Business Angel Fund”, with a EUR 22.5 million endowment, takes the existing model of the “business angel” as its point of departure. Finance Minister Dr Fekter: “The Business Angel Fund increases the supply of risk capital by doubling the investment power of business angels. The Austrian State matches each Euro invested by private investors in start-up businesses with a further Euro from the public coffers – this results in total risk capital volume of EUR 45 million. In tandem with the European Investment Fund (EIF) and private-sector business angels, we are able to achieve leverage of roughly 1:3 for Austrian public-sector subsidies”, Finance Minister Dr Fekter emphasised. “The Business Angel Fund is targeted particularly at young entrepreneurs who not only need a financial shot in the arm, but also require assistance with know-how and networking”, Dr Fekter said. The average investment under this subsidy scheme ranges from EUR 150,000 up to a maximum of 300,000 per company. “If the business is sold, the publicly funded portion is returned to the fund, thus enabling us to place further investments”, both ministers stressed.

“In terms of the levels of risk capital financing provided, Austria is ranked only 20th of 25 countries polled. Thus, we have a real need to catch up here and I am certain that our two “Young Entrepreneur” initiatives are the right way to make the necessary changes”, Dr Fekter stated in closing.