Migrant founders often experience discrimination during the founding process, a new survey shows.
(Photo: IMAGO/Wavebreak Media Ltd)
Berlin The majority of migrant company founders feel disadvantaged when founding a start-up in Germany. This is shown by new figures from the “Migration Founders Monitor”, which the German start-up association evaluated separately.
According to this, 57 percent of the founders who came to Germany after their birth experience particular obstacles on the way to their own start-up. The problems are evidently manifold: the respondents cited complicated administrative procedures, a lack of funding and networks as obstacles.
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At the same time, hardly any people come to Germany specifically to start a business here. Only eight percent of those surveyed stated that they had emigrated to Germany specifically to set up their own company.
The survey is based on an evaluation by the “German Startup Monitor”, which the start-up association publishes every year. Among the more than 1970 participants in the survey are 380 start-ups whose founders have a migration background. Of these, 57 percent were born abroad themselves, 42 percent are descended from parents who immigrated to Germany. The evaluations of the “Migrant Founders Monitor” relate primarily to migrants of the so-called “first generation” who came to Germany after their birth.
Bureaucracy makes founding difficult
One of them is Chunchun Qiu, co-founder and CEO of Cyclio. She came to Germany from China when she was eight years old. Her start-up deals with women’s health in the workplace and offers companies, consulting and software. When she founded the company together with a colleague in February 2022, she faced many challenges. Communicating with the authorities was difficult, Qiu recalls: “In the first few months, I was overwhelmed.”
Chunchun Qiu is co-founder and CEO of Cyclio.
(Photo: cyclio)
According to the study, first-generation immigrants often feel at a disadvantage when dealing with banks and authorities. Language barriers made it difficult for the founders. Many of the applications are only in German, the bureaucracy is often inscrutable.
A lack of networks is also a problem, says Chunchun Qiu. “I totally underestimated how important that is,” the founder recalls. It was only after several months that she was able to properly build up her network through online events. This is also confirmed by the Migrant Founders Monitor: 23 percent of those surveyed see themselves at a disadvantage when building a network with important contacts.
This in turn has an impact on financing: “Unfortunately, it is still often only the obvious founders who receive capital – from certain business schools with privileged backgrounds. Those with a migration background, on the other hand, often have no access to relevant networks and funding,” says technology investor Gülsah Wilke. The granddaughter of Turkish guest workers, together with three other co-founders, launched a network called “2hearts” to make it easier for young people with a migration background to access networks and capital.
Such networks are particularly important for founders like Chunchun Qiu. “This community has helped me a lot,” she says, and would like politicians to provide more targeted support for people with a migration background who want to start a business.
Migrants start up more often
Raji Sarhi is also a founder and has a migration background: His parents immigrated to Germany from the Gaza Strip before he was born. The 26-year-old founded Lemontaps, which offers companies digital business cards. Raji Sarhi explains that his migration background influenced him when he founded the company: “I got involved financially at an early age – when I was 13 I started working alongside school,” he says. Sarhi founded the company for the first time when he was 17, when his plan failed.
Raji Sarhi is co-founder of the start-up Lemontaps.
(Photo: Lemontaps)
In fact, people like Raji Sarhi are considered good entrepreneurs. Studies confirm that they are more willing to take risks – and therefore often break new ground economically. What this can lead to in the best-case scenario can be seen in the USA: more than half of the start-ups valued at over one billion dollars there in 2018 were founded by people with a migration background.
The most common explanation for the disruptive entrepreneurial potential of immigrant children: They are driven by a particular thirst for advancement. For them, there are no easy paths in life that are predetermined by their parents.
In order to make it easier for founders with a migration background, there should already be appropriate support for young people at school, Raji Sarhi demands. The founder not only sees his migration background negatively: “I think I was very open right from the start and bring a certain social sensitivity with me.” His 15-strong team consists of employees from many different backgrounds.
The survey also confirms that teams of founders with a migration background are more international. First-generation migrant founders set up more international teams. Around 51 percent of their employees come from abroad.
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