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Super Angels

The combination of low barriers to entry and lower capital requirements needed to launch web2.0 services and products is also changing the way (mainly consumer) Internet startups are being financed. The crowing trend of companies making earlier and smaller exits with less funding has led to rise of new type of investors, super angels, i.e. angel investors raising external funds, thereby taking the role of a traditional venture capitalist. Some liked to turn this into a war between angel investors and venture capitalists, such as Michael Arrington, and some just say it like it is, such as Fred Destin.

I’m glad Fred didn’t keep his promise to himself to stay out of the super angels versus VC debate. He makes a clear case by pointing out, how instead of putting name tags on things, one should focus on what really matters, i.e. the social contract between the entrepreneur and the investor, of any kind, when tying the knots of a “financial marriage” (More on the social proof and social contract by Fred Destin).

Although Fred now has left the European soil for Boston, before boarding the plane he gave a shout out for European angels by listing the European angel investor scene, and there sure is nothing to cry about!

Nordic Perspective

I promised Fred to fill in his list from the Nordic perspective, so here’s how the scene in the Nordics looks in general, and in Sweden in particular. (I’ve excluded Norway angel investor scene, simply because I would have to Google it myself. We would all love to know who the change makers in Norway are. Please, enlighten us!)

Sweden

No, we don’t have any super angels, yet. And as correctly pointed out on the update, plenty of US angels are connected and fast, European angels are (generally) hard to find and slow. So be the case even in the Nordics. The current tax regulations on angel investments are unfortunately still not in favour of an entrepreneur wishing to share her or his success by investing in another startup company.

The Swedish state and venture capital funding in Swedish seed and startup stage companies in 2009 accounted for approx. $245M, of which approx. only 10% was invested in seed stage companies. Sad. The amount for seed investments done by venture capital firms was devastatingly low. There are no statistics on angel investments made in Sweden, but research among angel investors imply both high activity and willingness for angel investments, if only the tax and divestment climate were more favourable (Source).

When the venture capital door stays closed, and the angels well hidden:

Vinnova
The Swedish Governmental Agency for Innovation Systems is a state authority promoting growth in Sweden for innovations linked to research and development. The latest funding round of SEK70 Million ($9,5 Million) was shared by 64 companies, of which $0,5 Million was granted to the very exciting new predictive analysis tool startup Recorded Future.

STING                                                                                                                           Stockholm Innovation and Growth is a business incubator working together with STING Business Angels and STING Capital. Companies like Videoplaza and MoSync have been incubated by STING.

Firm Factory Network                                                                                                                   A group of entrepreneurs and experts founded in 2005, investing in early stage startups. It has one of my favourites Booli, the Swedish real-estate search engine, in the portfolio.

iQube (Update 200810: Apparently no new investments, thanks Joakim Jardenberg.)

Centre for entrepreneurship and early stage growth companies, founded in 2004 by serial entrepreneur Johan Staël von Holstein, and has since the launch incubated over 90 companies. Companies such as MoMail and Squace are found on the alumni list.

Wyatt Media Group

Investment company with advertising network, focusing on Internet startups suitable to target young Internet audience. One of its eight portfolio companies is my favourite Bloglovin.

Southern Sweden is experiencing an entrepreneurial growth much thanks to initiatives by Øresund Entrepreneurship Academy, who also hosted the Mini Seedcamp Helsingborg last year. Over the last three years the number of students doing entrepreneurship courses in the Øresund Region has nearly doubled. There’s also Minc offering both incubator program (costs €150/month per person), workspace and meetings. Minc is currently incubating 27 companies, such as Ambadoo (Address book sync), Skyforge (Budget planner) and Saplo (Semantic technologies).

Denmark

Besides from the already listed Rainmaking and StartupBootcamp, who just announced the interesting list of ten teams, there’re serial entrepreneurs Thomas Madsen-Mygdal with companies like 23 – the visual sharing company, and Morten Wulffwho keeps investing into startups such as Wordy, one of the Mini Seedcamp Berlin winning teams.

Finland

The already listed Lifeline Ventures is one of the six accelerators of the state funded Vigo Startup Accelerator programme providing €45 Million high growth incubation fund. The other five accelerators by sector are Cleantech invest, Food Process Innovations, KoppiCatch, (Digital media-, internet- and mobile software businesses and services) Lots (Media technology) and Veturi Venture Accelerator (Innovation-based B2B ICT).

Finnish startup scene received more good news as of August 16th the Veraventure service with its closed angel network is open for all startups to apply funding up to €150k, with a promise that the angel investors would not get harassed too much by the entrepreneurs.

Message To Investors

My message to investors of any kind, who by any chance might feel harassed by people pitching their ideas, preferably shouldn’t be in the investment business in the first place. By meeting lots of people and listening to their ideas is the only way to get better in recognizing great teams and great ideas, as to build your social proof towards entrepreneurs. Yes, it works both ways, and trust me, the word travels fast.

I’ve been hanging out, or participated myself, basically in every tech and hack event there is. What makes me get out of bed on a Saturday morning 9 AM with -19 degrees celcius outside, when I don’t even have to?! I just don’t want to miss the opportunity and the joy of meeting great people and build my own social proof. And people still wonder how I seem to know everybody… To be in tech, and successful in it, you actually have to be interested in people, too. Ultimately, it’s always people you work with and invest in.

It’s much like Jason Calacanis often refers to Michael Jordan as an example “Great players miss a lot of shots, but you remember the ones they hit.” It’s no luck that the greatest investors always “seem” to get the deal on the best ideas. Early. They hang around and keep their ears close to the startup scene to find the next big thing. As the saying goes, when it’s on TechCrunch, it’s too late to invest.

And speaking of Jason Calacanis, as Fred Wilson talks fondly of the London tech scene as the NYC’s cousin, it comes as no surprise, that Jason is bringing his Open Angel Forum over to London this fall. If you’re a promising European startup with a working and demonstrable product to present, mark October 6th in your calender and hit the registration page. If you’re an angel investor with four notable investments in the last 16 months, register here.

So, Nordic investors, get out there, take your shots, and earn your social proof. It will be needed.

The Only Way To Change Things Is By Doing Things

To be honest, the absence of angels, VCs, or basically any type of investors in hack and tech events has been noticeable. Until then – we’re doing it just fine ourselves!

Initiatives like Betahaus in Berlin, TechHub in London (already been shown Russian interest!), Aaltoes Summer of startups (Demo Day August 27th), and Mindtrek Launchpad in Finland, Nordic Meetup by Natasha Friis Saxberg and Petra Johansson, and ArcticEvenings by ArcticStartup are boosting up the Nordic ecosystem. Music Hack Day is soon to run its 8th event, bringing together the global music tech scene, and here in Sweden the flow of web2.0 unconferences and hacking events just keeps accelerating: 24 Hour Business CampGeek Girl Meetup (resulted in invitation to meet with the Minister of Infrastructure), Mini Geek Camp for everyone under 18, Sweden Social Web CampStockholm Startup Weekend …

And last, but not the least: Having been mentor at the past three Mini Seedcamps, I can only agree with Fred Destin, it’s a great network, and so far the best seed funding vehicle for European entrepreneurs!

Recommended reading  on entrepreneurship for the Swedish startup crowd:

– Disruptive by Christian Rudolf and Peter Sandberg is all about love for entrepreneurship, and now also having Nicolai Wadstrom, founder of BootstrapLabs, giving his insights on being an entrepreneur and business accelerator in Silicon Valley. BootstrabLabs has my favourite Prezi in its portfolio.

– Nya Affärer: Don’t miss a very good interview with Hjalmar Winbladh, co-founder of Rebtel by Mikael Zackrisson, the editor of Nya Affärer.

Thanks for reading all the way here. Now please, fill in with Nordic angels, angel networks, co-working places, incubators, and events in the comments!

Update: Now you can also find, and help to fill in!, a list of Swedish business angels at Emerging101 by Johan Söderberg.

Paula is Digital Product Advisor and Top 100 Women in Tech in Europe, focusing on Product, Go-to-market, and Internationalization strategies. Rated as one of the very best startup mentors in Europe, she has to date mentored over 150 digital technology companies on product, marketing and growth. Pick My Brain! is her fixed price service tailored to early stage startups, gender wage gap adjusted for female founders. Contact Paula for digital strategy work or book her as keynote speaker about #Startups #WomenInTech #GenderEquality #Entrepreneurship. Read more about her work and connect @Twitter, @LinkedIn. “You never learn anything when you speak, only when you listen”Roelof Botha / Douglas Leone, Sequoia Capital
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