Christian Lindner makes concessions to German start-ups.
Berlin, Dusseldorf Federal Finance Minister Christian Lindner (FDP) has responded to the appeal of more than a dozen of Germany’s best-known start-up entrepreneurs to the federal government. The letter from Lindner is available to the Handelsblatt.
“I share your assessment that German start-ups play a key role in making our country internationally competitive and driving innovation and digitization,” writes Lindner. And further: “Only through innovation and digitization can we successfully shape the future of Germany.”
Lindner promises to follow words with deeds. Among other things, he promises a rapid reform of employee share ownership.
The Handelsblatt reported on the start-up fire letter on Monday. In it, the founders criticize that the traffic light coalition only protects established industries in Germany instead of “making policy for the economy and future growth”.
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The founders therefore called on the federal government, among other things, to relax the rules for employee participation. Lindner is now taking this up. The government wants to tackle the problem of the tax burden on participations without an immediate cash flow. “We will present key points in the near future. Your comments are therefore very welcome,” writes the minister.
>> Read about this: Founders sound the alarm – and want more money for growth and innovation
Employee participation has been a point of contention between politicians and the start-up industry for many years. Before the IPO or the sale of a start-up, employees of start-ups are not allowed to sell their shares in Germany. They are wealthy on paper but cannot turn their wealth into cash.
Employees may also have to pay taxes for their shares in the company if there is no exit at all – for example when changing jobs or after twelve years at the latest.
Relief is also viewed critically within the federal government. In the SPD in particular, there are fears that start-ups want to use this lever to lower wages.
In addition to looser rules for employee participation, the entrepreneurs also called for faster visa procedures for foreign skilled workers, more growth capital and a reform of pension schemes. But above all: more commitment from the federal government to growth companies.
Like the rest of the economy, founders are struggling at the moment. The German Start-up Monitor 2022 shows that almost 70 percent of young companies have external capital requirements.
Estimates by the analysis service Pitchbooks show that investors are becoming increasingly cautious: in 2021, deals worth more than 105 billion euros were closed in Europe, this year it was only around 54 billion euros. At the same time, the start-ups also lack workers. Every second company has difficulties in filling vacancies.
Pension reform
Another lever to strengthen the industry is venture capital. The policy should make it easier for insurers and pension funds to invest in such funds, the founders wrote in their letter. This is also in the start-up strategy, but details and an implementation period are still missing.
Lindner confirms: “As you wrote correctly, the mobilization of capital is extremely important for innovative companies. I share your view that the planned formation of a capital stock in the statutory pension scheme can also contribute to this.”
Lindner also refers to the start-up strategy. Simply presenting a plan “of course does not achieve anything”. Many points would be implemented with the announced Future Financing Act. This not only creates “facilitation of financial market law”, but also improves the “tax law framework”. In addition to the new rules on employee participation, the Future Financing Act will also include easier access to the capital market, especially for start-ups, growth companies and small and medium-sized companies.
More: Traffic light’s new start-up strategy – Less concrete than hoped