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Once a startup has found its perfect recipe for growth, they often turn to venture capital to buy the fuel that will really get the rocket ship to take off.

Venture capital (VC) is a type of financing that is provided to high-potential startups aiming for rapid growth and significant returns on investment. VC funds are typically raised from private and institutional investors such as pension funds, fund of funds, family offices, and wealthy individuals which allows them to invest significant sums.

The Danish startup ecosystem has seen several new VC funds over the last few years. In addition, more international venture capital funds are looking to Denmark and the Nordic region for deals. This led to 110 venture investments into Danish companies in 2022 – amounting to €1bn invested.

One of the key features of venture capital is that it is high-risk, high-reward financing. This means that investors expect a high rate of return on their investment, but they are also willing to take on the risk of investing in startups that may not succeed. This high-risk, high-reward approach is what makes venture capital a critical source of funding for startups.

Seeding for the venture

Pre-seed and seed capital is typically the first funding that a startup receives. This is the capital that is required to get a company off the ground and launch its initial products or services. Pre-seed and seed capital is often provided by angel investors, family and friends, venture-building studios, or early-stage venture funds specialized in priming the startup for the venture journey.

Venture capital is typically provided to startups that are looking to scale their businesses quickly. Investment rounds after the initial seed are usually used to fund the growth of the business.

VC firms typically invest in companies that have a solid business plan, a talented management team, and a unique product or service that has the potential to disrupt the market. They provide funding in exchange for an ownership stake in the company, which allows them to share the success of the company as it grows.

In addition to providing funding, venture capital investors often provide strategic guidance and support to the startups in which they invest. They may provide access to a network of contacts, assist with hiring key personnel, and provide guidance on strategic decisions.

However, venture capital also comes with an expectation of rapid growth. This can put pressure on startups to focus on short-term results rather than building for long-term value and sustainable growth. For that reason, it might be a great idea for startups to seek advice from professionals before raising their first investment.

Despite these challenges, venture capital remains an important source of funding for startups. It provides startups with access to the capital, expertise, and networks they need to grow and succeed.

Rounds in venture capital:

  • Pre-seed: Typically less than €250.000, and often provided by friends and family, angel investors, or early-stage venture capital firms.
  • Seed: Typically between €250.000 and €2,5 million, and provided by angel investors or seed-stage venture capital firms.
  • Series A: Typically between €2,5 million and €10 million, and provided by venture capital firms that specialize in early-stage investments.
  • Series B: Typically between €10 million and €30 million, and provided by venture capital firms that focus on growth-stage investments.
  • Series C: Typically between €30 million and €50 million, and provided by venture capital firms that specialize in later-stage investments.
  • Series D and beyond: Typically €50 million or more, and provided by venture capital firms 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 widely based on a number of factors, including the industry, the location of the startup, the stage of the business, and the current economic climate. Additionally, some startups may skip certain rounds or raise larger or smaller amounts depending on their unique circumstances.

The article is part of the magazine “The Guide – A comprehensive overview of the Danish startup ecosystem”, published by Heyfunding and

Read the full magazine here: