Copenhagen is bursting with innovative ideas and has startups in innovative sectors such as healthcare, biotechnology and cleantech. However, the Danish are yet to see any serious breakthroughs or exits. Danish startups lack drive and seem unwilling to work as hard as those in Silicon Valley, where entrepreneurship is in the DNA of the people living there.
Throughout the past couple of years, government bodies and organisations all over Europe, including Denmark, have launched a number of initiatives to support local entrepreneurial ecosystems, to improve growth and to encourage innovation. Despite this, the latest research shows that entrepreneurship continues to be vastly more widespread in countries which already have a rich history of entrepreneurial success.
As the below figures show, Scandinavian countries are still producing a significantly smaller number of entrepreneurs compared to other countries. With Denmark recording one of the least.
Great Britain 10,7%
India 6,6%
Poland 9,2%
Australia 13,1%
Denmark 5,6%
Mexico 19,0%
USA 13,8%
China 15,5%
Brazil 17,7%
Norway 5,7%
Sweden 6,7%
Turkey 10,0%
France 5,3%
Source: Global Entrepreneurship Monitor 2014
What Denmark needs is one startup that puts Denmark on the entrepreneurial map. A startup that makes it to the international stage and succeeds big time. A startup that gets people excited and sparks a passion for entrepreneurship in Denmark.
So what’s holding us back? We’re not lacking in ideas – in fact Denmark was recently ranked joint first (tied with the US) for product innovation in the Global Entrepreneurship and Development Index. The answer is a lack of funding. Denmark desperately needs to attract more capital to support new and existing projects. Our startups currently struggle to find the funding they need. This lack of finance is in turn, acting as a barrier for startups that could otherwise become much-needed inspirational success stories.
Denmark has now found itself in a Catch-22 position where successful new startups are in short supply because of a lack of inspiration and potential financing, and potential financiers are overlooking Denmark because it doesn’t appear to be producing a large amount of successful startups. No matter which problem gave rise to the other, we clearly need to fund more startup projects in Denmark. Sure some startups have managed to finance themselves through crowdfunding, but Danish regulations on this are still a grey area for many.
So what’s the answer? While the domestic angel market is not yet big enough to provide all of the required capital, angel capital would be a great solution to Denmark’s funding problem. Besides supplying the financing that startups need, business angels also contribute with experience, know-how and large networks, all of which can prove to be much more valuable to the startups than the financing itself. Business angels are willing to take risks that venture capitalists will not take and this may be the opening that Danish startups have been looking for. Add to this that angels in Europe’s largest and most mature angel market, London, are starting to look to other countries for investment and suddenly the future seems brighter for Danish entrepreneurs.
