2017 - European Horizon 2020 program
Malte and Tobias knew that they had far too little money to realize the project. A first estimate showed that they needed about 300.000 € to achieve first successes. For angel investors in Germany this is quite a lot of money and for a venture capitalist the company was still too undeveloped. The founders were looking for better financing possibilities and became aware of the European Union's HORIZON 2020 programme to promote research and innovation. Under the programme, the European Union is allocating €80 billion to innovative companies. Part of this amount is provided in the form of bank guarantees amounting to 70% of the financing. The guarantee can be requested from any bank in the European Union.
When the founders informed themselves about the topic of loans for startups on the Internet, one thing quickly became clear: banks are reluctant to invest in early-stage startups. The chances of obtaining a loan were therefore poor. In addition, only the bank secures itself with the EU. You still bear the full credit risk. Malte and Tobias decided to try and contacted the first banks. Deutsche Bank and Unicredit categorically rejected financing on the grounds that they did not finance start-ups. The situation was different at Commerzbank, Volksbank Hamburg and HASPA, which were open to the project in initial talks.
Now it was time to prepare a comprehensive business and financial plan. Both founders had only gained experience with angel investors in the first place, but not yet had any discussions with banks. Right at the beginning they made the first mistake: They wrote the business and financial plan with the focus to show the potential of the company as it would be prepared for investors. It showed up in the subsequent discussions with the banks however that these attach almost no value to it, but consider above all the financial figures and the default risk. This is also understandable, since the banks do not profit from the success of the company, but from the interest rates, which are independent of the success. Because of this Volksbank Hamburg rejected the first version of the business plan.
Malte and Tobias were already working full time for the company and their costs kept adding up. It was absolutely uncertain whether any bank would be willing to finance the project. To increase the chances of success, Malte and Tobias worked like madmen, collecting more than 10 letters of intent from boat schools to buy the first product and writing a new 70-page business plan. This was very carefully crafted to show the minimal risk and included a 20-page financial plan with multiple scenarios. However, it was clear to them that a refusal was still very possible. In order to further minimize the risk, they therefore wrote to another 15 regional banks. Gradually the first answers came, all cancellations. After 2 months and only negative answers the first offer came from the HASPA. With over 8% interest the conditions were very bad with a base interest rate of close to 0%.
Volksbank Berlin made one of the best offers and the talks were promising. When it became clear that the company's headquarters had to be in Berlin for the financing, the founders moved to Berlin in September 2017, where they lived in their office for the first 3 months. The talks with Volksbank Berlin continued to be good, but there were further requirements and it took a lot of time to prepare the documents according to specifications. On 6 October 2017, the Volksbank Berlin's bank teller called. He started on the phone with the following sentence: "I'm sorry, <long break> we have to clarify some details but we will finance Webbee". An approval, however, did not mean, money on the bank account. From the savings of the founders were by now only 2.500 € left and the car of Tobias was already for sale. It took another 2 months until also the EU finally approved the project and the money was transferred.
