Without entrepreneurs, Sweden halts

Debate article in Dagens industri December 28, 2023

Sweden and the Nordic region face a challenge that demands political courage and determination. Our entrepreneurs and innovation prowess, historically and currently the core of our economy, find themselves in a situation marked by uncertainty, hesitation, and, in some cases, chaos. Many entrepreneurs wonder where the capital is in the current economy. We are in a time when banks are unwilling to support, and where incubators, accelerators, venture capital firms, family offices, and business angels need to collaborate to fill the necessary gap.

Our ecosystem of business angels and investors, crucial for our economy, innovation, and entrepreneurship, requires more from our decision-makers. It is not just about business and investments; it is about job opportunities, tax revenues, and our national GDP.

The problem is that our most successful companies often turn abroad to seek capital. This results in returns and economic growth that should stay in Sweden and the Nordic region being exported to other countries. As a leading nation in innovation and entrepreneurship, it is a loss we cannot afford to accept.

The solution is to pay attention to and strengthen our own ecosystem of business angels and investors and connect existing support structures. These angels are not just capital providers; they also serve as mentors, advisors, and domain experts with a crucial role in supporting our entrepreneurs and startups. By providing the resources and tools they need to flourish, an environment is created where more innovative ideas transform into successful businesses. This will also help counteract "brain drain" and preserve tax revenues for our nation both in the short and long term.

This effort extends beyond the business world; it lays the foundation for the core of our society's future. By supporting our business angels and entrepreneurs, we create more job opportunities, increase tax revenues, and strengthen our national GDP. It is an investment in our economic future that we cannot afford to ignore.

Therefore, policymakers should prioritize creating a favorable environment for business angels and investors. This means offering incentives for investments in startups, simplifying bureaucratic hurdles, and promoting knowledge sharing and collaboration within the ecosystem. A prominent example is the United Kingdom, which has successfully promoted investments in domestic startups through its Enterprise Investment Scheme (EIS). This is achieved by enabling a repayment of up to 50 percent of the investment value through tax relief and offering additional relief in the event of bankruptcy for the invested startup. France has also taken measures to promote startup growth, with President Emmanuel Macron clearly expressing the goal of reaching 100 "unicorns" (startups with a valuation over 1 billion dollars) by 2030. It is time for Sweden and the Nordic region to follow their example.

In the spirit of innovation and entrepreneurial support, Nordic Angels was established, offering an independent communication platform and media channel for serious business angels. Here, they can share deals, co-invest, and work closer together to build Sweden's business and society stronger. This is made possible through digital tools, media investments, physical gatherings, and exclusive and in-depth research.

To address the significant challenges for business angels and entrepreneurs, Nordic Angels, together with 波士顿谘询公司 , has prepared a report (the State of European Angels) focusing on Europe and providing a deep dive into the Nordic region and Sweden. The report includes these facts:

• Between 2017 and 2022, the number of "unicorns" in the Nordics increased fivefold, and the region now represents 14 percent of all European "unicorns."
• Early-stage investments increased in 2022, while later-stage investments decreased.
• Half of all new jobs in OECD countries are created by companies founded in the last 5 years. During the same period, the number of Nordic "unicorns" increased by 6.1 times compared to Europe's growth of 3.6 times.
• In 2022, the Nordic region attracted 12 percent of the total investment in Europe, while accounting for approximately 3.7 percent of the population and about 8 percent of GDP.

Sweden and the Nordic region have an impressive history of innovation and entrepreneurship. Now is the time to take the next step and ensure that our ecosystem of business angels and investors receives the attention and support it deserves. It is a political challenge that cannot be ignored. That said, it is not only elected officials who can influence the entrepreneurial climate. Everyone with capital or expertise should contribute through collaboration with other business angels and key players in the business sector. This is to maintain and develop Sweden's strong history of entrepreneurship, especially if we want to ensure our economic future and create a stronger and more prosperous nation for all.

Ash Pournouri Chairman, Nordic Angels

Andreas Grape CEO, Nordic Angels