The competition for the best startups has intensified, placing new demands on investors

This post is also available in: Danish

There are never enough investment dollars for the aggressive growth journey. At least not if you ask startups.

The lack of venture capitalFuel for startups' rocket ride. Venture capital is pro investors who create pool funds to seek innovation, and to mentor. It is high risk, high reward journeys.... More was a theme in the ecosystem ten years ago, and it’s a theme today. Even though the investment volume has increased tenfold between 2013 and 2023 from approximately €150M to €1,500M, according to figures from StartupDent.

However, if you ask investors, the large influx of capital has had a major impact.

“It changes the competitive landscape compared to years ago when it was very national and local foundations and innovation environments that you went to as a founder. Now, there is some competition,” says Simon Bøttkjær, who co-founded Signal, an intelligence platform for data-driven investors, alongside Jacob Houlberg.

Denmark has been discovered abroad

Whether you’re a business angel or an international venture fundA venture fund is professional investors who scout start-ups to invest and mentor, aiming for innovation, growth, and returns. It is high risk, high reward. More, investing in startups is ultimately about finding the cases that provide the best returns.

The competition to invest in the best cases has increased as it has become easier to get information about startups and deploy capital across borders. There are simply more investors out there – especially from abroad.

“In recent years, we’ve seen more international funds looking towards the Nordics and Denmark. This challenges the local funds because the international funds typically have a more international selling point and international portfolios,” says Bøttkjær.

At the same time, funds have begun to invest earlier, while angels, through better organisation, invest larger sums in syndicates. This has changed the dynamics of who invests in a startup and when.

“In the old days, you got an angel round, then a pre-seed and then a seed roundA seed round is an early stage of fundraising in which a startup secures external capital to develop its business concept and create a minimum viable product. More. Today, angels can also participate in a seed round, and some startups skip the first early rounds entirely. So the terms have changed,” says Bøttkjær.

More outreach

The increased competition in the investment market means that investors need to do more outreach than before.

“In the past, VC funds relied heavily on inbound: companies came to them. That has changed. Today, many VC fund employees do nothing else than find and reach out to companies,” says Jacob Houlberg from Signal and continues:

“There is a self-reinforcing effect: The funds that do outbound get the best deals. Of course, this is a broad generalisation – but there is an increasing demand for funds to be proactive and early on the ball if they want to be involved. The whole process is becoming much shorter and more intensive because there is more competition in the market.”

The increased competition for promising startups is good news for Signal, which makes its living by providing information and screening early-stage startup projects for investors. But it’s also good news for startups.

“The tables are turning – from inbound to outbound – and this is beneficial for startups who can get a better deal if they have a good case. In the ideal scenario, all investors know all founders, so the best match wins. That’s the scenario we’re shooting for: there is still an information asymmetry we’re trying to bridge,” says Simon Bøttkjær.

About Signal:

Signal is an intelligence platform for data-driven investors. The platform allows investors to track people’s movements, company growth, product launches, hypes, and get tailored news in real-time to source and screen investment opportunities.

The company is founded by Simon Bøttkjær and Jacob Houlberg, who both have a background in the venture capital industry.