The Danish Startup Ecosystem Guide 2024 - Magazine - Page 55
Venture capitalists support
lift-off with high-risk
investments
Startups turn to venture capital funds when the perfect recipe for growth has been
established, and all that’s missing is the capital to accelerate growth.
enture capital (VC) is a form of
funding provided to high-potential startups aiming for
rapid growth and a signi昀椀cant
return on investment. VC funds are typically raised from private and institutional investors such as pension funds,
endowments, family of昀椀ces and wealthy
individuals who have the ability to invest
signi昀椀cant sums.
The Danish startup ecosystem has seen
several new VC funds in recent years. In
addition, several international venture
capital funds are looking towards Denmark and the Nordics to make deals.
One key characteristic of venture
capital is that it is high-risk 昀椀nancing.
This means that investors expect a high
return on their investment, but they are
also willing to take on the risk of investing in startups that may not succeed.
However, the expectation of rapid growth also puts pressure on startups to focus
on short-term results instead of building
long-term value and sustainable grow-
V
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th. Therefore, it can be a good idea for
startups to seek advice from professionals
before raising their 昀椀rst investment.
In addition to providing funding, venture
capitalists often provide strategic guidance
and support to the startups they invest in.
They may provide access to a network of
contacts, help hire key personnel and provide guidance on strategic decisions.
This high-risk, high-return approach is
what makes venture capital an important source of funding for startups.
Rounds in venture capital:
Pre-seed: Typically less than $1.5 million and
often provided by friends and family, angel
investors or early-stage venture capital 昀椀rms.
Seed: Typically between 1.5 and 15 million
kroner. Provided by angel investors or venture
capital 昀椀rms.
Series A: Typically between DKK 15 million
and DKK 75 million, made available by venture
capital 昀椀rms.
Series B: Typically between DKK 75 million
and DKK 200 million. Provided by venture
capital 昀椀rms.
Series D and beyond: Typically DKK 400
million or more, raised by venture capital
昀椀rms that focus on large-scale expansion and
preparation for an IPO.
It‘s worth noting that the actual amounts raised
in each round can vary greatly depending on
a number of factors, including the industry,
location of the startup, stage of the company
and the current economic climate. Furthermore,
some startups may skip certain rounds or raise
larger or smaller amounts depending on their
unique circumstances.
Series C: Typically between DKK 200 and
400 million. Provided by venture capital 昀椀rms
specializing in later-stage investments.
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