What's a good IP strategy when the budget for patent is limited?

1. There is a special public sponsorship program (WIPANO) which might be helpful for you (http://bmwi.de/DE/Themen/Technologie/Rahmenbedingungen/patente,did=774168.html).
2. You may file a kind of a provisional patent application as was suggested by Steven Weinrieb with the German Patent and Trademark Office, e.g. a patent application which establishes a date of priority. Within one year after the date of priority further regular patent applications may be filed claiming the priority of the earlier application and having the effective application date of the earlier application. Such a provisional application may be filed in any language with the German Patent and Trademarks without paying any official fee. Although the application will be deemed to be withdrawn unless you pay official fees you will get a date of priority.
3. It may be helpful to receive an examination report within the first twelve months after the date of priority in order to gain a valuable basis for deciding on further filings and for finding an outside investor. In this case it is advisable to file a regular application, i.e. with payment of official fees. The official filing fee is 40 EUR for online filing (incl. 10 claims) or 60 EUR for paper filing (incl. 10 claims), the examination fee is 350 EUR (if no search request has been filed). A search request (300 EUR) may be filed independently from filing an examination request. For first filings (i.e. filings which do not claim a priority) the German Patent and Trademark Office in most cases issues a search or examination report within 9 months after the application date when the search fee or the examination fee is paid at the filing date. This also applies for applications filed in English without the necessity of filing a German translation before the issuance of the search or examination report (nevertheless, a German translation has to be filed within 12 months after the date of priority in this case). Accordingly, filing a German patent application with a search request will give you a valuable basis for deciding on further filings at comparably low official fees (340 EUR for online filing incl. 10 claims).
4. Independent from whether the application is a “provisional” or regular application, it is advisable to entrust a patent attorney with the preparation of the application documents. Once an application has been filed, no further matter may be added to this application. When a subsequent application is filed within the first twelve months after the date of priority, further matter may be added to this subsequent application, but this may involve several risks. A patent attorney has much experience in how to appropriately draft a patent application and find the optimum strategy of how to protect your inventions.