aws Preseed - Deep Tech

The maximum funding amount was increased to EUR 267,000, and up to EUR 300,000 if the gender bonus is applied.
The gender bonus has been made available for a more diverse constellation of ownership structures and funding levels. Under certain circumstances, an additional EUR 500 per month can be claimed as personnel costs for the care of children of full-time employees.
The highest funding intensity ("funding rate") is now 80% in general and up to 90% if the gender bonus is applied.
When applying to aws Preseed Deep Tech, a company may have been founded up to 6 months previously.

What is the objective of the aws Preseed Deep Tech programme? 
The aim is to enable young, innovative deep tech projects with outstanding product ideas and highly scalable business models to prepare, implement and validate the proof of concept from a technical and economic perspective. As the companies financed with Preseed Deep Tech are usually in global competition, the international market is also the benchmark for evaluating the innovation.
The funding is thematically open to all technology areas, such as life sciences (biotechnology, pharmaceuticals, medical devices). Green technologies (Green and Tech for Green) as well as information and communication technologies and engineering/physical sciences.
Typically, funded start-up teams are characterised by outstanding STEM (science, technology, engineering, mathematics) skills and entrepreneurial talent.

Gender bonus: 
The new gender bonus affects both the amount of funding and the funding intensity ("funding rate"):

• The gender bonus can be claimed by founding teams with more than 25% of their shares held by female employees. The share can also be represented by several shares held by female employees. Details can be found in the programme document.
• If the gender bonus applies, the funding intensity is a maximum of 90%, without the gender bonus a maximum of 80%.

This is accompanied by the equity requirement: for the gender bonus, this is at least 5% of the eligible costs in cash, otherwise 10% in cash. The remaining equity can be provided from cash flow or other monetary sources.
Other public national or EU subsidies, in-kind benefits such as working hours or salary sacrifice, as well as short-term loans, are not recognised as own resources.

What is deep tech within the meaning of the aws Preseed Deep Tech programme?
 The start-up project must be in a position to sustainably expand and secure its competitive position on the basis of its outstanding international technological lead, secured by patents, licences and/or other protection options. For this reason, start-up projects with already known technology that is already highly visible on the market, for example, no longer fit into the Preseed Deep Tech programme. There is no restriction in terms of technology areas.

Typically, funded start-up teams are characterised by outstanding STEM (science, technology, engineering, mathematics) skills and entrepreneurial talent.

I already have a company - can I also apply for Preseed Deep Tech for a new company? 
The company to be founded must be independent within the meaning of the EU definition of an SME. Previously founded companies can be supported under special circumstances, especially if they have only served to prepare the Preseed Deep Tech company.

 Is it possible to receive aws Preseed Deep Tech funding if you are bringing an internationally established business model or technology to Austria/Europe for the first time?
 No, it is generally no longer possible to demonstrate a technological advantage here.

Can I have already founded a company in order to apply for aws Preseed Deep Tech?
 As Preseed Deep Tech funding is aimed at projects in the pre-foundation phase, the company must not have been registered in the commercial register for more than 6 months prior to submitting the application. Sole proprietorships or partnerships (e.g. OGG) may already have been founded, but they must not have any significant turnover or business activities.

How can I apply for aws Preseed Deep Tech funding?
The application website can be found on the aws Funding Manager. It is an electronic submission. If you require technical support, please call the contact number +43 1 501 75 - 110.

How detailed does the application form need to be?
You will be guided through the fields required for the application. A complete application contains the application form, as well as a detailed business concept/business plan including financial planning (see corresponding presentation below) and integral planning, proof of identity of the founders as well as detailed CVs of the founders and key persons in the (planned) company.  The information in the application form itself can be kept brief; the initial information must contain qualitative conclusions about the technology, differentiation from the state of the art and the targeted market.

All attachments must be submitted to the Funding Manager before the application is sent. Only complete applications will be processed.

After the initial assessment, the due diligence process begins, in which the available documents are reviewed in consultation with the applicant or team in accordance with the programme criteria. This is usually an iterative process in close dialogue with the applicant or team.

What are the requirements for the business concept or business plan and the budget?
The business concept/business plan is the basis for the detailed due diligenceG review.

• Presentation of the current customer problem
• Solution to the customer's problem: Explanation of how a specific customer problem is solved
• Product: detailed description and target specification of the product (data sheet, feature list, ...)
• Technology: comprehensive presentation of the technology, the development risk and the significant technological innovation leap in an international comparison.
• Unique selling proposition/USP: Presentation of the added value of the products or services compared to the international competition
• Business model: how will the company earn money (e.g. product sales, service sales, leasing, licensing, regular or one-off services, etc.)?
• Market: comprehensive presentation of the international market situation in the addressed market segment, backed up with figures and sources
• Competition: comprehensive presentation of the international competition (competitors, products, differentiation from the company's planned product) documented with figures and sources
• Sales strategy: through which channels and with which methods are sales planned?
• Environmental impact, sustainability and social aspects:

Independent of an application in the "GREEN" area, the environmental impact, sustainability and social aspects of the company should be analysed. The EU's Green Deal and the UN's Sustainable Development Goals should be used as references.

• Property rights: FTO analyses, patent applications, licences, trademark rights or other property rights strategies
• Team and personnel strategy: Presentation of the team, technical-scientific and entrepreneurial competences, experience, responsibilities and the time and financial commitment of the members of the founding team as well as personnel planning must be presented. Among other things, reference should be made to the implementation of equal rights for all genders in the planned company.
• Current status and milestones and key objectives achieved to date: Explanation of the current state of development of the technology and the company
• Development plan: Presentation of further development along the time axis with technical and financial milestones
• Financial plan: Presentation of the company's overall financing and, if applicable, current financing partners. The budget should break down sales by sales type (e.g. product sales, services, licence revenue, etc.) and also show the key elements of the company's typical expense structure. As integral planning is available as a project plan, a semi-annual or annual presentation can be used.
• Sources and authorship in the preparation of the business plan: Please cite sources for key content (studies, market data, graphics). Automatically generated content in the application or business plan is in any case an external source that must be cited. The authorship of the business concept/business plan must also be disclosed.

Is a planning calculation for two years sufficient? 
For the pre-seed deep tech phase (approx. 12 - 18 months), the planning document "Integral Planning" (downloads) must be prepared; planning beyond this for the next 2 - 3 years, which represents the further development of the company, must be submitted. Even if the planning uncertainties in the start-up phase are great, planning for approx. 4 years is a working hypothesis that must be continuously honed as the company develops.

According to which Austrian and EU guidelines is the funding organised?
Subsidies in the European Union are subject to extensive legal regulations. Austria Wirtschaftsservice GmbH (aws) is bound by these rules.

The programme "Preseed | Seedfinancing - Deep Tech Programme to promote the establishment and development of innovative companies 2024-2026" is based on point 3 of the guideline for Austria Wirtschaftsservice Gmbh for the promotion of technology and innovation of 01.01.2024 ("AWS T&I Guideline")

The "aws Preseed Deep Tech" programme is based on Commission Regulation (EU) 2023/2831 of 13 December 2023 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to De-minimis-aid, OJ L, 2023/2831, 15.12.2023 (in short: De-minimis Regulation);

Is aws Preseed Deep Tech a “De-minimis“ funding programme? 
Yes. aws Preseed Deep Tech is a "De-minimis"-subsidy, i.e. the de minimis limit of EUR 300,000 must not be exceeded within 3 years.

What is the funding intensity?
Funding intensity (also "funding ratio") is the proportion (cash value) of the respective funding to the (partial) project costs. In the Seedfinancing Deep Tech programme, the maximum funding intensity is set at 80%, and up to 90% if the gender bonus is applied.

What is the cash value? 
The cash value describes the benefit of a grant expressed in monetary terms, taking into account financial mathematical methods (discounting) and risk assessment. A grant usually has a present value of 100%, while a loan or guarantee has a significantly lower present value depending on the repayment conditions. The Preseed Deep Tech grant has a present value of 100% of the grant amount.

Can the aws Preseed Deep Tech grant be recognised as equity capital for the purposes of other funding campaigns? 
aws Preseed Deep Tech is a public grant. Therefore, this funding amount cannot be recognised as own contribution or complementary equity financing for other funding schemes that finance, for example, 50% of the project costs. Such contributions must be financed by other, private capital (own funds, long-term shareholder loans, loans, company profits). However, proof of sufficient overall financing (in compliance with the respective funding intensities) is possible with the inclusion of aws Preseed Deep Tech.

Presentation of financing and costs:

The financing of a typical preseed deep tech company is made up of the following:

1. Preseed project consisting of 
   a) Preseed-Deep Tech funding 
   b) Project-specific equity (min. 5-10%, depending on the application of the gender bonus). Usually within the scope of point 2. 
   c) If applicable, cash flow from sales (= internal financing) or other financing (e.g. long-term loans)
2. Additional equity capital (founders or business angels or VC or...) if necessary
3. If applicable, further funding project (can be delimited from 1.)
4. Long-term financing, convertible loans, if applicable
5. Turnover, if applicable

Equity contribution means funds that flow to the project and subsequently to the newly founded company in cash and are classified as equity in the balance sheet in accordance with the Austrian Commercial Code.

Equity of the founders: Here, the payment comes directly from those who usually hold the most shares and therefore have the highest profit entitlement.

This is offset by the company's costs, which are (partially) subsidised.

Eligible costs" are understood to be those costs that are directly part of the project to be financed. In this context, the term "total costs" used in the programme document also refers to "eligible costs".

Personnel costs include gross salaries as well as salary-related taxes and other mandatory costs such as municipal tax etc. ("ancillary labour costs"). For the purposes of the programme document, remuneration to partners agreed in the funding agreement in the form of withdrawals (partnerships) or fees (if there is no employment) are eligible for funding in the same way as personnel costs.

Please note: Individual cost items (receipts) may only be claimed as part of a single grant, otherwise this constitutes unauthorised double funding.

Can I have my own work credited to aws Preseed Deep Tech as own funds?
No, the minimum own contribution of the founders is set at 20%, at least 10% must be contributed in cash. Up to 10% can be provided from cash flow or other monetary sources. When applying the gender bonus, the own contribution is at least 10%. Up to 5% can be provided from cash flow or other monetary sources. Other public national or EU subsidies, in-kind contributions such as working hours or salary waivers as well as contributions in kind and short-term loans are not recognised as own funds.

Can I have the working time for which I receive remuneration from the aws Preseed Deep Tech grant counted as my "own contribution" for other grants?
No, that would be unauthorised double funding.

Why is the entrepreneurial team so important?
Start-up companies, especially those in the high-tech sector, carry a high level of risk as well as great opportunities. Entrepreneurial success and failure is highly dependent on management. For this reason, great importance is attached to an experienced, competent, committed and risk-taking start-up team when selecting start-up projects.

Why do founders have to contribute cash to the company?
The management of the company (and thus the influence on the increase in value) is in the hands of the founders. High increases in the value of companies are possible and also likely. Adequate risk sharing is therefore a matter of course. Depending on the composition of the founding team, at least 10% (5% if the gender bonus is applied) of the project costs applied for must be raised by the company's shareholders as their own funds. Up to 10% (5% when applying the gender bonus) can be provided from cash flow or other monetary sources.

Can the founder receive remuneration?
The remuneration is determined against the background of the economical use of Preseed Deep Tech funds. The upper limit for predominantly publicly funded Preseed Deep Tech companies is the FWF senior post-doc rate valid at the time the funding agreement is concluded (www.fwf.ac.at; personnel cost rates).

In principle, the founders' monetary interest should be orientated towards increasing the value of the company.

In the case of a Preseed Deep Tech grant, can you also be a part-time entrepreneur, i.e. can you also have another job?
As the successful development of a company requires all available resources, secondary employment is not permitted. Minor activities are excluded as long as they do not represent a conflict of interest. Minor activities must be disclosed.
In special cases, particularly if the business model requires a close connection to academic research, collaborating partners may only be available to the company part-time in exceptional cases. In this case, another team member must be available to the project full-time. Under no circumstances is it possible for all collaborating partners and know-how carriers to work part-time in the company.

How long does it take to receive aws Preseed Deep Tech funding?
The timeframe is comparable to a typical Austrian venture capital financing programme. An average approval time of 3 months can be expected from the time complete and meaningful documents are submitted - provided that the budget funds are available and the jury votes in favour.

What is the role of the jury?
The members of the jury have many years of entrepreneurial and/or scientific experience and at the same time knowledge of the imponderables of founding a company in the high-tech and deep-tech sector. Many of the potential bottlenecks along the company's development path can be recognised by the members of the panel. Advice or conditions in this regard are provided as part of any funding recommendation. 

Why are the tranche payouts milestone-based?
There are a number of risks in the pre-seed deep tech phase. The targeted agreement of interim targets enables a meaningful development and ongoing assessment of the start-up project.

Does Austria Wirtschaftsservice GmbH (aws) receive shares in the company as part of aws Preseed Deep Tech?
No. However, Austria Wirtschaftsservice GmbH (aws) reserves extensive rights to audit and inspect the company's activities in order to ensure that the funds are used in accordance with the funding programme.

What happens when new shareholders join the company? 
aws must be demonstrably informed of the entry of new shareholders or a change of shareholders within two weeks. If this leads to a change of control, the written consent of aws must be obtained in advance.  Proof of identity and CVs of significant new shareholders must be made available to aws.

Does the grant have to be repaid?
The aws Preseed Deep Tech grant is a non-repayable grant. However, in the event of serious breaches of contract, the grant must be repaid with interest.
Repayment must also be made if the company is sold or relocated abroad up to 12 months after the final settlement.

What happens if the company is sold or relocated abroad?
In the event of a complete or majority sale of the company or exit before the final settlement of the subsidy and up to 12 months thereafter, the subsidy must be repaid.
The same applies if the company relocates abroad.

Do the founders have to submit a personal liability declaration?
The personal liability declaration applies in the event that the company is sold without the consent of the aws before the final settlement of the grant and up to 12 months thereafter or the company is relocated abroad during this period. The existing statutory regulations apply to other cases of liability. Founders with (planned) company shares of 10% or more must join the Preseed Deep Tech contract and thus be personally liable.

Which expenses are NOT eligible for funding?
The following are not eligible for funding: Expenses that are not related to the content of a technology project (e.g. food, other expenses with a strong connection to "personal lifestyle"), expenses that have already been claimed for other grants; expenses that cannot be recognised as operating expenses within the meaning of the Income Tax Act; expenses that do not comply with the principle of economy and expediency; travel expenses that do not comply with the federal government's business travel regulations; invoices under EUR 150 net. In the case of investments, only the proportionate amortisation (depreciation) in the project period can be claimed as eligible costs.

What do I need to bear in mind when invoicing?
Funding is settled on the basis of proven project costs. There is a billing guide and a billing form ("proof of costs") for this purpose, which must be filled out accurately and correctly. It is advisable to keep this list up to date from the start of the project. Each invoice must be accompanied by proof of payment or proof of the flow of funds (e.g. bank statement). Only eligible costs may be invoiced. Funding recipients usually contact tax consultants or chartered accountants for support in this regard.

Example (without gender bonus): With eligible costs of EUR 250,000 and an 80% funding rate, the funding amounts to a maximum of EUR 200,000. Proof of costs of EUR 250,000 must be provided. Costs included in this proof of costs must not be subsidised by other grants and must not be financed by lump-sum cost coverage from other grants.  At least half of the own contribution of 20% must be covered by equity contributions and half by other contributions that are not subsidies. Ideally, 20% of the project costs should be available in the form of equity contributions.

 Further details and important information can be found in the billing guide.

Can vehicles be purchased?
The purchase of a vehicle with Preseed Deep Tech funds is not permitted. Renting or leasing is possible, provided it is economical, appropriate and authorised within the framework of the business plan.

What other financing options are available?
A distinction must be made between equity capital, debt capital and other funding. The websites aws connect and Förderpilot offer help in finding additional financing options.