Funding Glossary: The Most Important Terms Explained Simply
Anyone dealing with funding in Austria quickly encounters a variety of technical terms: AGVO, funding rate (Förderquote), De-Minimis, spin-off, and more. But what do they all mean?
Especially when submitting your first funding applications, it’s crucial to understand the language of funding agencies. That’s why we’ve compiled the most important terms around grants, loans, and funding logic – explained clearly and accessibly.
Affiliated Companies (Verbundene Unternehmen)
Companies that are economically or legally linked.
📌 Caution: This can change your SME classification and affect funding eligibility.AGVO (Allgemeine Gruppenfreistellungsverordnung)
EU regulation allowing certain funding measures without prior EU Commission approval.
📌 Important for startups: Many funding programs can therefore be processed faster and more easily.
De-Minimis Aid (De-Minimis-Beihilfe)
EU rule allowing smaller state subsidies (up to €300,000 over 3 years) without notification.
📌 In practice: Many grants for startups fall under this rule.
Double Funding (Doppelförderung)
Prohibited multiple funding of the same costs through different programs.
📌 Tip: Different cost types or project phases can, however, be combined and funded separately.
Funding Rate (Förderquote)
The share of project costs covered by funding.
📌 Example: With a 40% funding rate, you must cover 60% yourself (e.g., via equity or revenue).
Guarantee (Bürgschaft)
A state-backed security, for example via aws, where a third party guarantees repayment if you default.
📌 Benefit: Enables you to get loans even without collateral.
Grant (Zuschuss)
Non-repayable financial support for a project.
📌 Advantage: No repayment, no equity dilution – ideal for early-stage startups.
Liability (Haftung)
Your legal responsibility in contracts, loans, or guarantees.
📌 Important for founders: Clarify liability risks, especially with personal guarantees or loans.
Loan (Darlehen)
A repayable credit, often offered at favorable interest rates by a funding institution.
📌 Check carefully: Term, repayment schedule, interest, and fees.
Overhead Costs (Gemeinkosten)
Indirect costs not attributable to a single project, e.g., rent, administration, IT.
📌 Note: Many programs allow flat-rate overheads (e.g., 20%).
Present Value (Barwert)
The current value of a future payment, calculated using a discount factor.
📌 Example: A grant is often calculated at 100% present value, since it is available immediately and does not need to be repaid.
Silent Partnership (Stille Beteiligung)
A financing form where investors provide capital without operational influence.
📌 Benefit: Receive capital without giving up shares or control.
SMEs (KMU – Small and Medium-Sized Enterprises)
The official EU classification, crucial for eligibility.
| Company size | Employees (FTE) | Annual turnover OR Balance sheet total |
|---|---|---|
| Small enterprise | < 50 | < €10 million |
| Medium enterprise | < 250 | < €50 million turnover or < €43 million balance sheet total |
📌 Tip: Check whether affiliated companies (see below) affect your SME classification.
Spin-off
A new company emerging from a research institution or existing company.
📌 Example: A university project developed into a commercial venture – often highly fundable.
Third-Party Costs (Drittkosten)
Expenses for external services such as consulting, development, or research.
📌 Funding tip: Document carefully – they usually need to be proven.
Conclusion
The world of funding is complex – but understanding the basics gives you a clear advantage. With this glossary, you’re better prepared to submit applications, communicate with funding agencies, and choose the right financing strategy for your startup.
