Insights on the Nordic Business Angels

There is room for improvement in the pulsing Nordic startup and business angel environment.

The Nordic startup and business angel environment is pulsing. Still more highly remarkable Nordic startups are emerging, and there has never been more venture capital available. But just as startups and entrepreneurs have to mature and grow, great business angels must also emerge over time. 

There might only be a handful of tech startup investors in the Nordics that have been founders of tech startups, and have now thrown themselves into investing in early stage ventures. Two experienced Nordic business angels draw a picture of the Nordic startup and business angel environment that is characterised by great satisfaction, but with room for improvement.

Hampus Jakobsson is located in Malmö, Sweden, from where he has a very close connection to the Nordic startups. Personally he has invested in 35 startups — and he goes in early with a fixed amount. He is generally positive about the Nordic startup environment, but believes something should be done to improve it.

Another business angel worth getting advice from is the Finn Jaakko Salminen, who is currently involved in a dozen startups as an investor, board member, or advisor. His main occupation is Chairman of the Board of one of the most mature business angel networks in the Nordics: the Finnish Business Angels Network, or FiBAN. FiBAN is aspiring to increase the quality of investments in early-stage startups.

We need more business angels in the Nordics

While Finland is best known for its gaming startups, Salminen believes that the scene is much more diverse today, particularly with Cleantech, Life Science, and Information and Communications Technology (ICT) startups.

“It used to be more than half of the startups that they invested in were within ICT, now it is less than 20 percent. This means that the startup scene itself has become more varied, attracting a broader base of investors,” Salminen explains.

As Chairman of FiBAN, Salminen’s job is to be the face outwards. He is therefore already connected to the Nordic startup environment, but wishes to see even closer collaboration between Finland and the rest of the Nordic business angel network.

Jakobsson thinks there is room for improvement in the business angel ecosystem. 

“In the Nordics there are maybe 15 prominent angel investors and I know them all (Jesper Buch, Hjalmar Winbladh, etc.). If you spend one day in San Francisco you will meet 15 angel investors without knowing it because the ecosystem is so big,” he says, and explains what could be done to make more competent business angels in the Nordics:

“There needs to be an alignment of expectations. Make sure angels understand what startups are and the risks involved. A big problem is also business schools teaching ‘the way of the business plan’.”

Kings in Silicon Valley

If the Nordics were to compete with Silicon Valley, there also needs to be a change in the general perception of entrepreneurs. He continues:

“In Silicon Valley the entrepreneurs are the kings of the world. In the Nordics being an entrepreneur is still not being a visionary, but more of being an outcast. It has become less underground, but it is not the first choice for young people. In Berlin the artists are the kings, and in London it is the bankers,” Hampus Jakobsson says.

But it could be that this is already changing. At least Salminen already experiences a change in the perception of entrepreneurs in Finland.

“There is a rapid and major cultural change taking place in Finland, where young entrepreneurs have become rock stars within the last five years. I feel this change will have a huge impact on the entire Finnish society within the next 10 years.” 

Despite the challenges ahead in the Nordic countries, Jakobsson loves to be an angel investor that invests in Nordic startups.

“Denmark and Sweden are both in top 10 when it comes to return on investment (ROI) on startups compared to the inhabitants. So the potential is very high. Maybe smaller political initiatives like tax deduction could give rise to more business angels. People might be a bit more risk taking if investments were deductible somehow,” Jakobsson concludes.

Meet Jakobsson and Salminen and get more insights at TechBBQ in the Opera in Copenhagen May 20. Get your ticket here