Startup financing in Germany: Traditional ways and the future with tokenized equity
As a founder in Germany or Austria, you know that raising capital is one of the biggest milestones on the way from a pitch deck to a scalable company. But which paths are open to you — and which suits you, your team and your product best?
In this article, we will show you the most common financing options for startups in the DACH region. And we'll tell you why tokenized equity For early-stage startups in particular, this is the most efficient and flexible way to raise capital.
Bootstrapping: Full control but limited speed
What is that? You finance your startup with your own funds, income, or small loans from friends and family.
advantages:
— Full control, no external pressure
— No dilution of your shares
Disadvantages:
— Limited growth resources
— High personal risk
Suitable for: Founders with lean, efficient business models or MVPs.
Public subsidies & bank loans
What is that? Programs such as EXIST, INVEST or promotional loans from KfW (Germany) or AWS (Austria).
advantages:
— Non-dilutive capital
— Government support for innovation
Disadvantages:
— Expensive in application and administration
— Payout often linked to specific milestones
Suitable for: Technologically oriented startups or R&D-driven projects.
Angel investors
What is that? Early-stage capital from experienced business angels.
advantages:
— Quick decisions
— Access to know-how and network
Disadvantages:
— Different expectations and deal terms
— Risk of an overloaded cap table
Suitable for: Startups with the first proof of concept and need less than one million euros.
Venture Capital
What is that? Equity capital from professional venture capitalists.
advantages:
— Large funding tickets
— Network, recruiting support, follow-up financing
Disadvantages:
— High growth rate expected
— Influence on strategy and governance
Suitable for: Startups with great scaling potential and an experienced team.
Crowdinvesting
What is that? Involvement of many retail investors via platforms such as Seedmatch or CONDA.
advantages:
— Community effect and public relations
— No dependency on VCs
Disadvantages:
— Legally complex with many parties involved
— High effort for campaigns
Suitable for: B2C startups with a clear target group and a good story.
Tokenized equity: The modern way to fundraise
What is that? Digital tokens that securitize economic rights (e.g. profit sharing) — legally based on German contracts, such as profit-sharing rights. Investors receive participation without a GmbH share.
advantages:
✓ Fast and digital — without a notary or shareholder resolution
✓ Clean cap table — tokens (virtual shares) instead of direct GmbH entry
✓ Investors worldwide — angels, communities, international backers
✓ Fully compliant — based on German law
✓ Perfect for early-stage startups
example: You want to collect 100,000€ — divided between 25 investors. Classically a nightmare. With Tokenize.it: One click on #InvestNow and everything runs legally securely on the blockchain.
Why we believe
We are convinced: More angel investing is crucial for a strong startup ecosystem.
That is why Tokenize.it makes it as easy as possible for founders to obtain capital from relevant investors — including the Business Angel of the Year 2022, Thomas Schmidt, who is already successfully using the platform to invest in ambitious startups.
Ready to take the next step?
Whether pre-seed or on your way to Series A — Tokenize.it helps you implement your funding quickly, flexibly and legally compliant. No paperwork. No cap table chaos. But with everything that modern founders need.
