Startup Strategy 2026: The Key Measures for Founders

A total of 3,053 new startups in six months. This figure marks a remarkable moment for Germany as a startup location.

Compared with the second half of 2025, the number of newly established young companies classified as startups based on criteria such as innovation and growth potential increased by 52 percent. According to commercial register data analysed by startupdetector, this was the strongest six-month period since the survey began in 2019.

But the more difficult task usually begins afterwards.

A company has to find customers. A research project has to become a marketable product. The team has to grow. Capital is needed for the next stage of development. Companies expanding internationally encounter new markets, regulations and competitors.

A startup does not automatically become a scaleup.

The federal government aims to narrow this gap with its new Startup and Scaleup Strategy.

152 measures designed to help startups grow

On 22 July 2026, the Federal Cabinet adopted the new Startup and Scaleup Strategy. It contains 152 measures across eight fields of action.

The federal government is pursuing three overarching objectives:

1. Make it easier to start a business

2. Accelerate growth

3. Keep more innovation in Germany

The strategy therefore extends far beyond conventional startup funding.

Its eight fields of action are:

Financing

More venture capital and growth funding for startups and scaleups.

Education, spin-offs and research transfer

Research should be converted into new companies and products more quickly.

Security and defence

For the first time, DefenceTech and dual-use technologies have their own dedicated focus.

Reducing bureaucracy

Company formation, administrative processes and approvals should become simpler and more digital.

Public procurement and competition

Startups should find it easier to win public-sector organisations as customers.

Skilled workers

Companies should be able to attract talent more easily and offer employees a long-term stake in their success.

Cooperation

Startups should work more closely with small and medium-sized businesses and industrial companies.

Internationalisation and networking

German startups should find it easier to enter new markets.

Germany already introduced a comprehensive startup strategy containing more than 120 measures in 2022. In the second progress report published in 2024, 81 percent of the measures were classified as implemented, completed or undergoing continuous implementation. Priority measures were given double weighting in this calculation. At first glance, this sounds like considerable progress.

However, a measure can be formally implemented while a university spin-off still spends months negotiating patent terms. A new financing instrument can exist while companies continue to struggle with their next growth round. Procurement rules can be changed without startups actually winning more contracts.

The success of the new strategy should therefore not be judged solely by asking: How many measures have been implemented?

The more important question is: What has actually improved for startups as a result?

Which of the 152 measures can solve my company’s next bottleneck?

The most important startup strategy measures for founders

1. Scale-up Direct: more capital for the growth phase

Scale-up Direct is intended to provide innovative growth companies with direct equity funding. KfW Capital will invest alongside private investors. According to the federal government, the instrument will have a total volume of €1 billion.

It is particularly relevant to companies that have moved beyond the early startup phase and require larger financing rounds.

This has an important consequence for founders: Financing should not be planned only as far as the next round. Companies aiming for strong growth should identify early on which investors could later provide €10 million, €20 million or more.

2. First-of-a-Kind financing for DeepTech and industry

A prototype can work while still being far removed from an industrially scalable product.

This is the gap that First-of-a-Kind financing, or FOAK, is designed to address. The federal government intends to support privately managed funds that provide loans for the first industrial implementation of new technologies, products and processes. According to the government, €300 million has been allocated for this purpose.

This could be particularly relevant to areas such as:

• ClimateTech

• energy

• industrial biotechnology

• new materials

• mechanical engineering

• hardware

For these companies, the crucial financing question often arises only after a successful prototype has been developed.

3. More private capital for venture capital

The federal government wants to mobilise more long-term private capital for startups.

This includes the further development of the WIN Initiative. Institutional investors are also expected to become more active in venture capital.

The idea is that directing more capital into VC funds could allow those funds to grow and finance more companies during later stages of expansion.

For startups, this means knowing more than the investors who could participate in the next round. The potential investors for the round after that should also be on the radar.

4. Growth Fund II and European scaleup financing

Germany also intends to strengthen Growth Fund II and European financing instruments. This addresses a familiar problem in the European startup market: Many options are now available for small and medium-sized financing rounds, while the choice becomes considerably narrower for very large rounds.

Companies seeking to scale quickly should therefore build relationships with growth investors well before the capital is actually needed.

5. EXIST Startup Factories: from research team to company

For founders based at universities, the EXIST Startup Factories are among the most directly relevant measures.

They are intended to create strong startup ecosystems around universities and research institutions, while connecting research, founders, investors and companies more effectively.

Anyone starting a company from a university or research institution should therefore consider the following questions at an early stage:

Which Startup Factory operates in my region?

Which technology transfer office is responsible?

Which EXIST funding programme is suitable for the project?

Which investors understand my technology?

The right time to answer these questions is often before the company is formally established.

6. A national IP strategy to make spin-offs easier

In DeepTech, it is not only the quality of a technology that matters. Ownership is equally important.

Patents, software, licences and other intellectual property rights can quickly become obstacles for university spin-offs. The federal government therefore intends to simplify and standardise IP transfers.

For founders coming from research, this means clarifying intellectual property rights at an early stage.

Investors will want to know whether the company is genuinely permitted to use and develop the technology on which its business depends.

7. Regulatory sandboxes to enable innovation despite regulation

Many new technologies do not fit easily within existing rules. Regulatory sandboxes are intended to allow companies to test innovative applications under controlled conditions.

They may be particularly relevant to:

• artificial intelligence

• HealthTech

• energy

• mobility

• other regulated technologies

For founders operating in these markets, regulation does not belong solely in the legal department. It is part of both the product strategy and the go-to-market strategy.

8. Making it easier for the state to become a startup customer

For many startups, one of the most interesting measures may lie outside conventional funding programmes. The federal government wants to improve young companies’ access to public contracts.

This is particularly relevant to:

• GovTech

• HealthTech

• education

• energy

• mobility

• infrastructure

• security

For these companies, a public-sector contract can achieve more than a funding programme. It generates revenue, provides a real-world use case and creates a valuable reference.

Founders should therefore look beyond funding programmes. Public authorities, municipalities and publicly owned companies can form a distinct customer segment. This requires a dedicated business-to-government strategy. Data protection, IT security and procurement law then become part of the sales process.

9. Venture clienting: established companies as first major customers

Cooperation between startups, small and medium-sized businesses and industrial companies is also expected to grow.

Venture clienting is an important approach.

In this model, an established company does not necessarily invest in a startup. Instead, it becomes a customer and tests the startup’s technology within its own operations. This can be particularly valuable for B2B startups.

A strong venture client provides:

• revenue

• product feedback

• references

• industry expertise

• access to additional customers

Alongside an investor pipeline, startups should therefore maintain a second list containing potential pilot customers and major clients.

10. Dedicated financing channels for DefenceTech and dual use

For the first time, security and defence form a separate field of action within Germany’s startup strategy. Among other measures, the federal government wants to support specialised VC funds and enable direct investments in security and defence companies. This is not relevant only to traditional defence contractors.

Technologies in areas such as:

• cybersecurity

• robotics

• drones

• sensors

• communications

• artificial intelligence

can have both civilian and military applications.

This creates an additional market for founders. However, it also involves specific requirements relating to export controls, security and procurement.

11. “Starting a Business Faster” to simplify administration

Not every important measure involves billions of euros. The “Starting a Business Faster” project is intended to simplify and further digitalise the company formation process.

The benefit would be immediate. Every day between the decision to establish a company and the ability to operate costs time and often money.

12. Employee equity to help startups attract skilled workers

Startups compete with established companies when recruiting but often cannot offer the same salaries. Employee equity participation is therefore an important instrument. The federal government intends to improve the relevant conditions further.

For founders, this is not an issue that can be postponed until a distant scaleup phase. A well-designed participation model can already help with the first important hires. At the same time, it should be structured so that later financing rounds do not become unnecessarily complicated.

A development founders should continue to monitor

EU Inc. and European company law

Germany supports the creation of an additional European legal framework for innovative companies, often referred to as a 28th regime or EU Inc.

The idea is that a startup could establish and scale its business more easily across Europe without having to navigate entirely different corporate-law structures in every market.

For founders, however, this is currently mainly a development to monitor. Companies expanding into France, Italy or another European market today must continue to work within the existing rules.

Where founders can take action now

A straightforward assessment of the company’s current position is a useful starting point.

Before founding the company

Review EXIST, Startup Factories, regional startup centres and university programmes. For research-based spin-offs, intellectual property and usage rights should be addressed at an early stage.

During the first financing round

Create a financing matrix covering business angels, venture capital, public funding and other potential forms of financing.

Not every programme will be relevant. Identify the instruments that match the company’s current stage.

In DeepTech

Plan beyond the prototype.

How will the pilot facility be financed?

How much will industrialisation cost?

Which investors can fund the next level of development?

FOAK financing and specialised instruments become relevant precisely at this point.

In B2B markets

Do not look only for investors.

Look for venture clients and pilot customers as well.

A strong first major customer may be more valuable for the next financing round than additional public attention.

When doing business with the state

Treat business-to-government as a separate customer segment.

Identify authorities, municipalities and publicly owned companies with a specific problem that your product can solve.

In DefenceTech and dual use

Review specialised investors and public procurement channels. Security, export and regulatory requirements should become part of the company’s strategy at an early stage.

During the growth phase

Consider Scale-up Direct, growth investors and European funds before the capital is urgently needed.

Before international expansion

Choose one market and develop clear answers to the following questions:

1. Why this country?

2. Which customers?

3. Which partners?

4. Which regulations?

Only then can accelerator, networking and soft-landing programmes provide meaningful support.

The startup boom is only the beginning

A total of 3,053 startups in six months is a strong signal.

How many of these companies will still exist in five years? How many will grow from ten employees to one hundred? How many will make the transition from the laboratory to industrial production? How many will win international customers and secure major financing rounds?

The new Startup and Scaleup Strategy addresses precisely these transitions.

Its 152 measures could become relevant to individual founders and to the country’s economic position. However, the number of measures is not in itself a measure of success.

The decisive question for the federal government will be whether these measures lead to measurable improvements.

For founders, the important question is:

Do the measures address the biggest bottlenecks my company will face over the next 24 months?

Capital? Intellectual property? Regulation? A major customer? Skilled workers? Internationalisation?

Anyone with a clear answer does not need to follow all 152 measures.

They only need to identify the few that could make a difference at precisely the right point.

Sources:

[1] German Startups Association / startupdetector (2026): Next Generation – New Startup Formations in Germany, H1 2026.

https://startupverband.de/fileadmin/startupverband/media/research/99_sonstige_studien/studien/Next_Generation_Startup-Neugruendungen_in_Deutschland_H1_2026.pdf

[2] German Federal Government / Federal Ministry for Economic Affairs and Energy (2026): Startup and Scaleup Strategy of the German Federal Government.

https://www.bundeswirtschaftsministerium.de/Redaktion/DE/Publikationen/Wirtschaft/startup-scaleup-strategie-bundesregierung.html

[3] Federal Ministry for Economic Affairs and Climate Action (2024): Second Progress Report on the Implementation of the German Federal Government’s Startup Strategy.

https://www.bundeswirtschaftsministerium.de/Redaktion/DE/Publikationen/Wirtschaft/zweiter-fortschrittsbericht-zur-umsetzung-der-start-up-strategie-der-bundesregierung.html

[4] German Federal Government (2026): Federal Government Response on the Instruments of the Germany Fund and the Financing of Startups and Scaleups. German Bundestag, Printed Paper 21/4186.

https://dserver.bundestag.de/btd/21/041/2104186.pdf

[5] Federal Ministry for Economic Affairs and Energy (2026): Annual Economic Report 2026.

https://www.bundeswirtschaftsministerium.de/Redaktion/DE/Publikationen/Wirtschaft/jahreswirtschaftsbericht-2026.pdf

[6] German Federal Government (2026): Federal Government Response to the Minor Interpellation “Implementation and Effects of New EU Regulations for Startups in Germany”. German Bundestag, Printed Paper 21/5585.

https://dserver.bundestag.de/btd/21/055/2105585.pdf

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