‘Landing a start-up job is about contacts’

In this week's My German Career, founder of Berlin's Startupbootcamp Alex Farcet explains why he moved to the German capital from Denmark and how to succeed in the city's start-up scene.

'Landing a start-up job is about contacts'
Founder of Startupbootcamp Alex Farcet explains how he made it in Berlin. Photo: Submitted

Where are you located and what do you do?

My family and I live in Prenzlauer Berg and my office space is near Checkpoint Charlie. I co-founded Startupbootcamp in Copenhagen in 2010 and we now have seven programs in five countries.  

Startupbootcamp is a tech start-up accelerator. We select ten start-ups from 400 applicants and work with them for 90 days through a mentorship program which concludes with an investor demo day.  

Each team gets €15,000 in micro-funding, six months of free office space and access to over 100 mentors most of whom are serial entrepreneurs.  Out of the 10 start-ups we select, eight or more are usually international, i.e. they relocate from all over the world to join the program.

What brought you to Germany and how long have you been here?

We moved middle of last year from Copenhagen to launch Startupbootcamp here. Berlin had become such of hub of entrepreneurship in Europe that we simply had to have a program here.

When it comes to start-ups there's a real talent migration happening right now. The city is international, young, creative and inexpensive which are all ingredients of a great start-up ecosystem and it seems every other person I meet moved here within the last 12 months and is working on some kind of start-up. 

How did you land your job and do you have tips for anyone seeking similar work?

I didn't have to land any job since I launched the company but I did have to raise money to run the program which was more challenging than I initially anticipated.  

The Berlin start-up ecosystem is booming but there is still not nearly as much venture capital as in London which is the real capital of venture in Europe.  

As for landing a job at a start-up, that's even more relationship-based than a regular corporate job. The best tip is simply to get out of the house and join one of the myriad events going on each week, from hackathons to Start-up Weekend, and show what you can do.

Is it important for you to be able to speak German in your position?

Not at all. Our program is entirely in English (we have over 15 nationalities at a time) and the start-up language is English by default. I'm fortunate that my Danish wife is fluent in German which has certainly helped with institutions and government issues but in general I've found that starting with a polite apology and a smile opens up people and I've not had too many run-ins with grumpy Berliners.

What are the best and worst parts about working in Germany?

We moved to Berlin for a very specific reason, the strength of the start-up ecosystem which would support a new Startupbootcamp program.  

Berlinhappens to be in Germany but, from a professional perspective, it's incredibly international and it sometimes feels like everyone who doesn't fit in the rest of Germany, moves here. In general I love the creativity, youth and energy of the city. From an infrastructure point of view it has a way to go to catch up to other European capitals but it will get there.

Do you plan on staying?

Not forever, since our children are clamouring to move back to Copenhagen to catch up with their friends. If it was up to me we would certainly stay a long time since it is such an amazing city both at and away from work, I love it here.

Would you like to feature in My German Career? Email [email protected]

READ MORE: Ten points in defence of Berlin's start-up scene

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7 tips for how to survive as a freelancer in Germany

Taking the decision to go it alone and freelance in Germany can be a daunting prospect. But, if you do it right, it can be an exciting and liberating path. Here are some of our top tips on how to survive.

7 tips for how to survive as a freelancer in Germany

1. Get a tax advisor

The German tax system is complicated, even for Germans. All the associated paperwork uses the Amtsprache (authority language) which is more like legalese than ‘normal’ German, and mistakes when filling out tax forms can cause you, at best, a massive headache and, at worst, a costly fine. So it’s best that you employ someone who knows what they’re doing to help you out.

That person is called a Steuerberater (tax advisor) in Germany. They will help you register with the tax office, correspond with them and submit your tax declarations.

Be aware that, in Germany, different deadlines apply for tax returns depending on whether you employ an official tax advisor or not. If you are doing the tax return on your own, the deadline for submitting your annual tax return is earlier than if you use a tax advisor’s services. 

READ ALSO: What NOT to do when you’re freelancing in Germany

When looking for a tax advisor, a top tip is to use your network to get recommendations. Ideally, you want someone who will do more than just fill in the forms for you, but who will actually advise you on how best to manage your business finances so that you can make tax savings.

2. Keep your accounting in order

The better you keep your own accounts in order, the easier it will be for your tax advisor to compile your tax declarations and therefore the cheaper their services will be.

As a freelancer, there are a lot of costs you can deduct from your taxes – from train tickets, working materials, to meals out – so it’s best to keep hold of all your receipts and to keep them in good order.

2 euros and 50 cents lie on a receipt in a beer garden. Photo: picture alliance/dpa | Peter Kneffel

In Germany, you’re obliged to keep hold of receipts for two years, in case of a tax inspection, so it’s a good idea to photocopy the type of machine-printed receipts you get from restaurants so that they stay legible for a long time.

There are also a few things to be aware of when writing your own invoices. Firstly, make sure that you include your tax number. This isn’t the 11-digit Steueridentifikationsnummer that everyone gets when registering in Germany, but the 10-digit Steuernummer you get from the Finanzamt after registering yourself as a freelancer. 

Most companies won’t pay you if you don’t have this on your invoices so make sure you include it.

You should also make sure that you number your invoices properly – ideally in ascending order so that you can easily keep track of them. You are not allowed to issue two invoices with the same number and if you do so and the finance office notices, you could face an inspection of your whole accounting system.

There are numerous great accounting software programmes you can use to help you, such as Lexoffice and Sevdesk and, even if you have to pay for them, the costs will be tax deductible!

3. Find out if you’re eligible for financial support

In Germany, there are several opportunities for freelancers to gain financial support and to cut their outgoings, and its worth finding out if you’re eligible for them.

If you’re claiming unemployment benefits under ALG 1 and are thinking about becoming a freelancer, the employment office offers a special type of financial support to help you to get your freelance business off the ground.

Called the Grundungszuschuss (“foundation grant”) the payment is a six-month grant equalling your monthly entitlement under ALG 1 plus €300 towards your insurance costs can be applied for those in receipt of this unemployment benefit.

READ ALSO: Will freelancers benefit from Germany’s €300 energy allowance?

If you are engaged in some form of artistic profession in Germany – which can include journalism to pottery – you may be entitled to membership to the Kunstlersozialkasse (artists’ social insurance).

Being a member of the KSK means you only have to pay half of your health insurance and pension contributions, and the KSK will pay the rest.

4. Work out how much you think you will earn

As with starting any business, you need to have some idea of your expected earnings from the outset.

If you’re just starting out as a freelancer, or have some freelance gigs on the side of an employment position, then it might be worth considering registering yourself as a Kleinunternehmer (“small business”).

As a Kleinunternehmer, you can currently earn up to €22.000 per year without having to charge VAT and having to submit only yearly tax declarations. 

An income tax declaration form lies on a table. Photo: picture alliance/dpa/dpa-Zentralbild | Hans-Jürgen Wiedl

Be aware that if you are registered as this kind of freelancer, you must include the following sentence in your invoices: ‘Gemäß § 19 UStG wird keine Umsatzsteuer berechnet’ which means ‘In accordance with Paragrah19 of the German VAT law, no VAT has been added to this invoice.’

READ ALSO: Everything you need to know about your German tax return in 2022

If you think you will earn more than €22.000 per year, you will need to pay Umsatzsteuer (VAT) and will have to submit tax declarations in advance and more often. Depending on how much you earn, this could be every month or every quarter. 

5. Get your insurance in order

In Germany, it’s a legal requirement to have health insurance.

If you’ve just made the move from employment to being a freelancer and want to keep the same health insurer, you should get in contact with your health insurance provider straight away to tell them about your change of circumstances. They will ask you to re-register and to tell them your projected freelance earnings for the year, so they can amend your monthly fees.

If you don’t keep your health insurer provider updated, you could continue to be charged the higher rate that you had from your previous salary.

The insurance cards of the health insurance companies DAK, AOK, Barmer and Techniker-Krankenkasse TK lie with euro notes under a stethoscope. Photo: picture alliance / dpa | Daniel Karmann

It’s not just health insurance you need to think about as a freelancer. It’s also wise to think about protecting yourself from any sort of claims that could arise as a result of any working mishaps. 

If, for example, you lose your laptop which contains confidential client information, you need to be protected against claims.

That’s why it’s good to have both Betriebshaftversicherung (business liability insurance) and Rechtschutzversicherung (legal protection insurance).

6. Plan your time wisely

All of these bureaucratic obligations take time. So it’s really important that you take account of that when planning your time. For example, planning half a day a week to deal with your invoices, filing, emails to clients, and conversations with authorities can be really beneficial when scheduling your working time. 

7. Grow your network

As a freelancer, networking is absolutely crucial to success. 

Keep an up-to-date profile on websites like LinkedIn and German equivalent XING and keep in contact with anyone you’ve ever worked with, no matter how brief the contact was. 

Having a network is not only about getting more clients, but also about building a support network in your field to exchange advice, tips and generally for your own enrichment. 

Participating in workshops related to your field, going to seminars, and meet-ups, can be great ways of broadening your network.