Participatory capital refers to equity which is provided by venture capital companies or private investors. The usual securities are not needed here.
The participation can be “silent” or “open.” In a silent participation, the investors do not get to be coowners of the company nor do they get any voting or management rights. In an open (direct) participation, the investor can exert influence on the management as a co-owner of the company.
Venture capital companies provide capital in return for an annual remuneration consisting of a fixed and profit-based share, and the participation is based on the nominal repayment of the invested capital.
For the companies, the advantages of the participatory programs are primarily found in strengthening the equity base while at the same time conserving collateral and increasing the financial latitude.
Here is a summary of the public participatory programs:
|Participatory program||Amount of participation|
|MBG - Mittelständisches Beteiligungsprogramm|
min € 50.000
max € 1 million (in exceptional cases max € 2 million)
|SBG - Beteiligungsprogramm|
max € 1 million
in exceptional cases max € 2,8 million
|Technologiegründerfonds Sachsen (TGFS)|
min € 200.000
max € 4 million
|Wachstumsfonds Mittelstand Sachsen (WMS)|
min € 500.000
max € 2,5 million
|ERP-Startfonds der KfW Bankengruppe||up to € 2,5 million per 12-month period|
up to € 5 million in all
initial financing of up to € 500,000
further € 1,5 million for follow-on financing