“FRANKFURT. Not all entrepreneurs need a huge amount of start-up capital. Often, a few thousand euros are enough to become self-employed. This is the result of the Start-up Monitor, compiled annually by the development bank KfW, which was presented in Frankfurt on Tuesday.
According to the report, in 2024, three-quarters of founders financed their business start-up solely from their own resources. This is the highest proportion measured since 2008. More than half of the founders, namely 56 percent, managed with less than 5,000 euros. Almost a third needed between 5,000 and 50,000 euros. More than 50,000 euros in start-up capital was required by only 12 percent of founders.
The results can also be explained by the fact that the KfW Monitor offers a very comprehensive overview of start-up activity. It also includes people who become self-employed as freelancers or part-time entrepreneurs. This definition goes beyond commercial start-ups as the sole source of income. It also includes investments in and acquisitions of existing companies are included as well as new businesses. The source is 50,000 telephone interviews and an additional 10,000 online interviews.
Overall, the number of new businesses started rose by three percent to 585,000 in 2024. According to KfW, the slowdown in the labor market contributed to this slight increase. "It would be a bad sign if we saw a decline in start-ups during an economic downturn," said KfW Chief Economist Dirk Schumacher. The relatively weak desire to start a business in Germany in recent years was due to the very robust labor market.
The better the earning opportunities for employees, the less attractive it is to start a business yourself.
According to Schumacher, start-ups also contribute to a kind of healing process for the economy. They ensure that new ideas are implemented and the competitive pressure on existing companies increases. They also create jobs. Last year, new businesses created 485,000 full-time equivalent jobs. This figure summarizes part-time jobs are combined with full-time jobs. Two half-time jobs therefore equal one full-time equivalent.
Where do founders get their start-up capital? Promotional loans, such as those offered by the public-sector KfW (KfW), are not always necessary. "Many founders were employees and were therefore able to save some money," says KfW economist Georg Metzger. Of course, capital requirements differ depending on whether you start your own business with a very traditional business like a hair salon or nail studio or whether you introduce a new business model based on a new technology. Professional investors therefore play an important role for innovative startups.
The record-high share of 75 percent of self-funded startups should not obscure the fact that, according to KfW, startups are becoming more capital-intensive.
For example, the share of founders who only needed small amounts of less than €5,000 was still high in 2024, at 56 percent.
In the past, however, it was significantly higher, ranging between 60 and 70 percent in the years up to 2021. This trend is expected to continue after According to KfW's assessment, this may be related to general price increases. Starting a business has also become more expensive.
The KfW Monitor also addresses the megatrend of an aging society. Statistically, the proportion of young founders in particular is higher than ever since the survey began. While founders were on average 37 to 38 years old at the beginning of the millennium, the average age is now just 34. According to KfW, however, this is due to an above-average decline in the proportion of older founders. "Silver entrepreneurs," i.e., founders between 50 and 65 years of age, are at their lowest level ever, while the proportion of particularly young founders between 18 and 29 years of age has risen to a record high. At the same time, according to KfW Chief Economist Schumacher, fewer and fewer entrepreneurs willing to hand over their business are finding successors.
There are even founders who have turned the surplus of successor seekers into a business model. For example, the Tradineo platform, founded by Tobias Zimmer, connects people who want to take on responsibility with entrepreneurs who want to hand over their business. Tradineo also finances the Succession. Founder Zimmer is certain that the topic of succession will become an even bigger trend, as he recently stated in an interview with the Frankfurter Allgemeine Zeitung.
According to Chief Economist Schumacher, demographics are like a shifting glacier, moving relatively slowly but unstoppable. In this situation, it is all the more important to remove administrative hurdles for founders. The biggest obstacle is, that founders are faced with the omnipresent bureaucracy. Even if perception and reality sometimes diverge, one thing is clear: "Something has to change here," said Schumacher. While in most cases it is not bureaucracy that forces founders to give up, it is primarily financial bottlenecks. However, the new government would do well to remove hurdles and simplify contact with authorities for founders, as is also provided for in many places in the coalition agreement.
After all, 60 percent of newly founded businesses are still in existence five years after their founding.
So the success rate is not that low. Nevertheless, it takes a lot of courage to build one's own business. "Starting a business is a risk," says Schumacher.” [1]
1. Mit nur 5000 Euro wird man zum eigenen Chef: Laut einer KfW-Studie machen sich viele Gründer mit eigenem Geld selbständig. Wie lange halten sie durch? Frankfurter Allgemeine Zeitung; Frankfurt. 04 June 2025: 22.
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