At TechBBQ in Copenhagen, thousands of investors and startups gather for matchmaking – and it’s needed. In recent years, startups have found it much more difficult to attract venture capital. But some tricks recur among successful startups.
“They need to think about how much money they need, what they’re going to do with it, and why. It makes a big difference compared to those who haven’t done their homework and don’t know their numbers,” says Klementina Österberg, CEO of GU Ventures.
Industry colleague Linus Wiebe, who is a manager at FSG Fond in Skåne, points out that investors are currently looking for a clear path to profitability for companies, and which other co-investors have invested in the companies.
“An important thing that people sometimes forget to check is whether the co-investors have the same view of where the company is headed – and perhaps even more importantly, if we have the same view of when we should exit the company,” says Linus Wiebe.
It’s much harder for startups to attract capital today compared to a few years ago. That’s what Ebba Fåhraeus, CEO of Smile Venture Hub in Lund, says.
“But it’s also possible that this is normal. We’ve had a period where it’s been extremely easy to get capital, but now we have a very uncertain world. There’s war on several fronts, we have environmental problems, and we’ve had a period now with slightly higher interest rates. Then investors shy away from risk. Early-stage biotech and life science companies that we work with are high risk and it can take quite a long time before they become profitable or make that one amazing deal,” says Ebba Fåhraeus.
She adds that cell and gene therapy are attractive areas right now, attracting corporate venture funds, so-called CVCs.
“These are the pharmaceutical industry’s investment arms that invest. They are very curious about new technologies because the industry itself needs new ideas,” she says.
If you represent a small startup and want to attract capital – what are the main factors you should focus on?
“You have to choose which investors are suitable and you have to be able to explain very clearly what the path to market looks like,” says Ebba Fåhraeus.
This article is a translation from Efn written by reporter Anders Frick
