Quick tips for startups looking for capital
- The right business angel can be a important support during a growth journey
- Consider the competencies needed in your company
- How do the interested investors match your needs
- Do you seek capital only once or would it be better if the investor has resources to participate in more investor rounds
A powerful source of capital
Angel investing is a growing and powerful source of financing for entrepreneurs in the Nordics, and an attractive opportunity which many private bankers and businesses are eager to explore.
“Many experts see the Nordic market as the new diamond,” says Jacob Faber Andersen, Head of Startup & Growth (Denmark) at Nordea. “There is an unresolved potential in Nordic startups that will mature over the next few years. At the same time as an investor, it’s a good idea to spread your risk making startups an attractive option.”
Business angels invest in startup companies in exchange for convertible debt or ownership equity. Both parties can benefit from early investments, especially when angels bring so called “smart money” to the table. Smart money means that in addition to monetary funds, the business angel will offer skills, resources, networks, and experience— all urgently needed during the early make-or-break growth phases of a startup.
Taking on the right investor is pivotal
However, not all matches are made in heaven. If interests are misaligned or experience is lacking, a hopeful match can easily take a turn for the worst. Jacob Faber Andersen continues, “Business angels who enter a startup with a completely different agenda or an incorrect mindset, can ruin the entire business idea. An investment made without fully understanding risk or how to monitor key progress indicators can quickly turn unsustainable for the business angel. An inexperienced startup, on the other hand, might take on too many owners, a loose-loose dilution that removes the incentives to both owning and running the business.”
Matching the right startup with the right angel is therefore of paramount importance. Nordea together with Accelerace, one of Europe’s leading seed accelerators, have identified the benefits of combining the networks that both parties can tap into, and thereby support that the right connections are made.
Creating opportunities for the right match
Through the partnership, an exclusive networking place has been created where both existing and future business angels from Nordea private banking can connect with promising Nordic startups handpicked by Accelerace. Startups get access to qualified capital, and investors get the chance to support the companies and technologies of the future.
“We believe that all wealth starts in a company,” says Jacob Faber Andersen at Nordea .” Angel investors can play a pivotal role when it comes to promoting societal change and develop future economies in the Nordics. The Nordea x Accelerace matchmaking program allows us to contribute to a tighter and more sustainable co-investment ecosystem.”
The program also provides guidance to first-time angels. People and businesses from Nordea Private Banking that are interested in becoming business angels receive education and expert advice on things like what to look for in a perfect match, how to make the investment sustainable in the long-term, and even when to say no.
A win-win for all parties involved
So far, the initiative has been very popular both among angels and entrepreneurs. At one of our recent matchmaking events in Copenhagen, pitches were heard from five pioneering startups with products ranging from a savings platform for children to a 3D printer for prototyping within the R&D sector.
“We have a technically advanced product, so the potential may be hard to understand, but at this event we could feel the presence of ‘angels’ with passion, expertise, and curiosity, says Maksym Plakhotnyuk, CEO of ATLANT 3D Nanosystems, who pitched at the event. “We’re a young company, so of course we need financial backing. But we also need people around us that can offer support in other ways, since we pave the road as we walk it,” he adds.
Among the business angels in attendance that day was Nordea private banker Lars Holtug. “Of course I want a return, but I can contribute more than capital,” Lars says. “I bring considerable experience from the auditing business to the table and can help them steer clear of the largest pitfalls. They bring innovative energy and entirely new solutions to needs and problems…it’s fantastic to help create a business from this starting point.”
“For me it’s all about getting really close to the company and helping them succeed, so I must also be a good match for them,” he adds. “This is where the network is a good opportunity to meet the right people both for the investors and the startups.”
To learn more about the Nordea x Accelerace matchmaking program, visit https://www.accelerace.io/nordea-accelerace-matchmaking/.
Interested in becoming an angel? Go to https://www.nordea.se/private-banking/ for more information on how to be contacted by Nordea Private Banking.
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