Start Up Successfully: Important Tips On Corporate Financing
The best business idea is useless if you can't finance your business. Attorney Dr Georg Schröder is familiar with this problem. Among other things, he advises start-ups on legal issues. In this interview, he talks about possible sources of financing and reveals how start-ups can get through bank interviews.
Financing Options For Every Situation
exali: Assuming I want to set up a company: What options do I have to finance this project?
Dr Georg Schröder:
There are various ways to approach the financing of a business start-up. The classic way is via equity, i.e. funds that you already own. Loans from banks or subsidies, for example from government programmes, also play a major role. Another option is investors who become involved in the company through equity investments. Crowdfunding platforms now also offer an opportunity to finance projects through many small contributions. The choice of suitable financing depends heavily on your project and individual requirements.
Convincing With Structure and Clarity
exali: How can I convince potential investors about my business idea?
Dr Georg Schröder:
It is important that you can present your idea in a clear and structured way. Investors and banks want to know why your project will be successful. You should therefore be able to present a well thought-out business model and a market analysis. Make it clear how your product or service stands out from others and what problem it solves. A realistic financial plan is also essential to gain the trust of investors. Show that you are aware of the risks and have strategies in place to minimise them.
Confident In Discussions With Financial Institutions
exali: A meeting with a bank certainly makes many people nervous - what do I have to consider and how do I behave correctly?
Dr Georg Schröder:
That's quite normal! Preparation is key. You should know your concept inside out and be able to present it convincingly. The bank is primarily interested in the economic viability of your idea, so focus on facts and figures. Be open and honest, including about possible challenges. But also show how you intend to overcome them. Appearing confident, but not arrogant, and responding to questions in a targeted manner creates trust. Practise the interview in advance to appear more assured.
Realism and Flexibility In Financial Planning
exali: Starting a business is always a challenge, especially when it comes to financial resources. What mistakes do you repeatedly observe when founders tackle the financing of their project?
Dr Georg Schröder:
A common mistake is to be too optimistic about the financial requirements. Many founders underestimate the initial costs or the period until the company is profitable. A tight financial plan often leads to liquidity problems. Another point is the lack of diversification in financing. Putting all funds on one source increases risks. Neglecting alternatives can be problematic if the original financing fails.
Finances are an unpleasant but important topic for many freelancers and the selfemployed. You can find useful tips in our article Accounting For Self-Employed: How To Get Your Finances In Order.
exali: What developments do you see in the area of start-up financing? For example, do founders use other sources of capital than they did a few years ago?
Dr Georg Schröder:
Yes, definitely! In addition to traditional banks, alternative forms of financing are playing an increasingly important role. Venture capital and business angels are still popular, but crowdfunding and crowdinvesting have become increasingly important. There is also a trend towards using funding more efficiently, for example through specialised advisory services. We are also observing that founders are thinking more and more internationally and combining capital from different sources to be able to react more flexibly and quickly to market changes.
Professional Support For Founders
exali: Recht 24/7 is a legal tech company that supports people in Germany in setting up their own business. How do you specifically help people who want to found a company?
Dr Georg Schröder:
Our aim is to make the legal aspect of a start-up as simple as possible. We not only offer legal advice, but also tools that help those wishing to set up a company to draw up contracts, complete the necessary formalities and recognise legal risks at an early stage. Our platform enables founders to handle legal matters quickly, transparently and cost-effectively so that they can concentrate on the essentials: the successful realisation of their business idea. Our team is always available to answer individual questions.
Thank you for the interview!
Dr Georg Schröder, LL.M. is a lawyer from Munich. He has been advising start-ups on all legal issues for over 22 years. He specialises in data protection law and has established a reputation as the author of important standard works.
His clients include renowned banks, media companies and aspiring start-ups from the IT and software sector. He has also worked as a lecturer at the Ravensburg University and the Lomonossov University in Moscow.
Vivien Gebhardt is an online editor at exali. She creates content on topics that are of interest to self-employed people, freelancers and entrepreneurs. Her specialties are risks in e-commerce, legal topics and claims that have happened to exali insured freelancers.
She has been a freelance copywriter herself since 2021 and therefore knows from experience what the target group is concerned about.
