Success factors of subsidized startups in Germany

The German government has established two subsidies to stimulate the transition from unemployment to self-employment, the Existenzgruendungszuschuss and the Ueberbrueckungsgeld program. This stimulated more than 350.000 subsidized start-ups in 2004 alone. The cost for subsidies add up to about € 3.0 billion annually. The government recently announced plans to eliminate one of the programs. This research study summarizes the results from previous research and presents the results of a survey of 197 subsidized entrepreneurs. The findings suggest that the subsidies are stimulating the creation of start-ups and generating sustainable employment not only for the founders.