German bureaucracy and funding biggest hurdles for start-ups

The economic situation of German start-ups continues to vary greatly. According to a recent survey of 152 tech founders commissioned by the IT industry association Bitkom, the economic situation has improved for more than a third (37%) over the past two years—an increase compared to the previous year, when 31% said the same. At the same time, however, 31% reported a deterioration, which is a significant increase compared to 24% in the previous year. The proportion of start-ups reporting a stable situation with no major changes fell from 41% to 28%.

While many founders still assess their situation as slightly positive despite the challenges, they are more critical of the general economic situation for start-ups overall: Only 21 percent see an improvement, while 47 percent see a deterioration. It is particularly alarming that more than one in seven start-ups (15%) fear that they will become insolvent in the next twelve months—a figure that has risen significantly compared to the previous year (11%).

It is also, but not only, the bureaucracy

The biggest challenges from the perspective of start-ups are bureaucracy (63%), sales and customer acquisition (61%), as well as financing and capital procurement (52%). Almost two in five founders also see access to public contracts as a major obstacle. Just as many (39%) cite their future growth and the scaling of their business model as a hurdle. Legal uncertainties regarding regulatory requirements such as data protection or the AI Act bind a third of young companies, followed by product development (21%), a shortage of skilled workers (19%), technological challenges (16%), a lack of demand (13%), and competitive pressure (11%).

Bitkom President Dr. Ralf Wintergerst emphasizes the importance of consistently reducing bureaucracy and modernizing the state to make the location more attractive for start-ups. He also calls for public contracts to be awarded more easily to young companies, which would not only benefit them but also the state as an innovative client.

The survey was conducted between calendar weeks 12 and 21 in 2025 and is not representative. However, Bitkom emphasizes that it would reflect a meaningful picture of the mood in the German startup scene. Details on the methodology and results can be found here. But even with slightly different figures, the data shows that start-ups in Germany find themselves in a challenging environment in which growth and difficulties are closely balanced.

(fo)