The German Federal Government specifically considered startups by announcing a package of measures for those businesses in the crisis to be eligible to receive economic aid measures. The EUR 2 billion packages of measures for start-ups were announced on April 17th, 2020, and enacted as of April 30th, 2020. The package of measures comprises two pillars:
(1) The first pillar is the Corona Matching Facility. Through the existing cooperation with public partners, it will be expanded to ensure that the public funds are accessible to start-ups via VC funds. Such federal partners inter alia are KfW Capital and the European Investment Fund. The VC funds are eligible to apply for this program and may match public resources in a ratio of up to 70 (public) to 30 (private). These may be VC funds in which KfW Capital and the European Investment Fund have already invested as well as new VC funds.
(2) The second pillar is aimed towards start-ups that do not have access to the Corona Matching Facility. This aim is to be achieved by establishing closer cooperation between start-ups, with the German federal states. Therefore, state companies and state development institutions shall develop more intimate collaboration with these companies to allow for VC capital and other forms of funding. The risk is split between the Federal Government and the respective state company involved and, if applicable, private investors. France's Minister of State for Digital Affairs Cédric O and public investment bank Bpifrance announced a comprehensive support plan for start-ups on March 25th, 2020. Some French start-ups are going to face revenue issues as well as funding issues in the coming months. The French government wants to bridge that gap with refinancing and liquidity measures temporarily— overall, it represents $4.3 billion ( € 4 billion).
The French government has already announced a comprehensive economic support plan. French companies that are facing revenue issues can skip tax payments as well as rent and utility bills. The French government is mobilizing $320 billion ( €300 billion) in liquidity support, which should make it much easier to get a loan as the government is backing loans. And yet, start-ups are always on the verge of bankruptcy. That's why the French government is going one step further with a startup-focused support plan with additional measures.
First, start-ups that were in the process of raising a new funding round will be able to raise a bridge round through Bpifrance's PIA (Plan d'Investissements d'Avenir). Some VC firms might retract term sheets; others might slow down their investment pace. Bpifrance is putting $86.7 million ( €80 million) on the table. Private investors will co-invest as much as $86.7 million ( € 80 million) as well.
Second, the government is detailing liquidity support measures for start-ups. Just like other companies, they can borrow money as part of the $320 billion ( €300 billion) liquidity scheme. For start-ups, they can borrow as much as two years of payroll for employees based in France or 25% of annual revenue — whichever is higher. This should account for $2.2 billion ( € 2 billion).
Third, start-ups can get tax returns more quickly, and in particular, VAT returns and tax returns on research and development investments. This represents a liquidity injection of $1.6 billion ( € 1.5 billion).
Fourth, Bpifrance is speeding up public support payments. It is going to transfer $270 million ( €250 million) ahead of schedule.
On April 17th, the Canadian federal government revealed plans to make an additional $250 million available through the existing Industrial Research Assistance Program (IRAP) program, which provides advice, connections, and funding to Canadian startups. Canadian Prime Minister Justin Trudeau said the measures are meant to address gaps left by the federal emergency loan programs and the wage subsidies. The additional capital is being committed after calls from the Canadian innovation sector lamenting that existing federal emergency programs have not been inclusive of start-ups.
The UK government announced on April 20th, 2020, that UK businesses driving innovation and development would be helped through the coronavirus outbreak with a £1.25 billion government support package. The £500 million Future Fund has been designed to ensure high-growth companies across the UK receive the investment they need to continue during the crisis. Delivered in partnership with the British Business Bank and launching in May, the fund will provide UK-based companies with between £125,000 and £5 million from the government, with private investors at least matching the government commitment. These loans will automatically convert into equity on the company's next qualifying funding round or at the end of the loan if they are not repaid. A business must be an unlisted UK registered company that has previously raised at least £250,000 in equity investment from third-party investors in the last five years to be eligible. The government is committing an initial £250 million in funding towards the scheme, which will initially be open until the end of September. The scale of the fund will be reviewed.
In a bid to strengthen its position in the global start-up ecosystem, the Indian Department for Promotion of Industry and Internal Trade (DPIIT) is working on a National Seed Fund and a credit guarantee scheme in an advanced stage for the Cabinet nod. The National Seed Fund seeks to support ideation and development of early-stage start-ups while the credit guarantee scheme will enable start-ups to raise loans easier. The schemes are said to be part of the country's broader roadmap for start-ups, and the overall vision for the sector will detail the priority areas that need support.