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Financing life science start-up ventures in Sweden

Can funding be facilitated from British venture capital?

Written by Carl Andreasson

Paper category

Master Thesis


Business Administration>Entrepreneurship




Master Thesis: The importance and financial constraints of startups There is strong research and evidence to support the fact that startups have a significant impact on economic stability and strength. Innovation, motivation, job creation, wealth and globalization are all areas where startups make the most contributions. in e n s 2007) due to its ecological impact on the economy, startups should be encouraged to grow and make contributions to the economy to which they belong. From a broader perspective, startups are an important asset when comparing the wealth and importance of geographic regions. Öberg, Lundström and Halvarsson n s m 2007) explained that “the competitiveness of coun y o e ion lies in i s c p bi i y o innov e”. In recent years, the government has gradually realized that in order to maintain economic growth and create employment opportunities, it is necessary to promote entrepreneurship through policies. Although there are many ways to formulate policies to encourage entrepreneurship, one of the main components is the supply of venture capital to stimulate the growth of small businesses. n s 2007) Naturally, there are companies with high growth potential in all departments and locations, but there are signs that the characteristics of entrepreneurial companies with the highest growth potential are knowledge-based and technology-driven. Therefore, they are usually based on intangible assets and operate in fast-growing areas without any historical records. For such companies, early-stage venture capital requires both the necessary funding and management skills to ensure that new start-ups really take off. ns 2007) Although the importance of entrepreneurship and risk creation is widely recognized, access to funding for small and medium enterprises in Europe and elsewhere has been considered a long-standing issue. (Stokes & Wilson 2006) The availability and cost of financing are the main constraints for the formation and development of small and medium enterprises (SMEs). For technology-based, fast-growing companies, this restriction is even more serious. (Mason & Harrison 1995) Why do many of these promising companies find it difficult to find funding for their projects and development? According to Stokes and Wilson, some observers believe that the lack of large, liquid pan-European markets and focusing on the needs of small companies are the main obstacles to early capital development in Europe, which can provide these high-growth companies with equity. 1.2 The role of venture capital in the innovation system For a long time, venture capital has been regarded as a key factor in promoting innovation, economic growth and employment by supporting and developing high-growth small enterprises. In this era, researchers believe that few fast-growing high-tech companies have not received venture capital funds or attempted to obtain venture capital at a certain stage. ns 2007) However, one cannot think that venture capital is the only motivating factor for small companies, because it is only one of the many structural factors in countries where ven u e c pi is considered "success f c o ". For example, effective technology transfer conditions, incubators, foreign direct investment policies or basic research funding. In addition, governments and other non-governmental organizations may provide one-time funding for special projects or purposes. Although there are multiple ways to use initial capital, venture capital is supported by the "Way of Evidence" because the acquisition and availability of venture capital is a key factor in maintaining a low unemployment rate and promoting a culture of entrepreneurship and innovation. (Lawton 2002) In addition to providing financial services, the venture capital service industry has another interesting aspect. It is different as a provider of capabilities, not just capital or funds. en 2003) In other words, one of the main differences between banks and venture capitalists is that the latter provides non-financial and monetary support to the company. (Bains 2008) However, banks can only provide means for new enterprises in the form of loans and regulations prohibit banks from acting as venture capital investors. Start-ups interested in this research most often seek permanent capital to start, expand, develop, or innovate. Therefore, they need equity capital, the main sources of which are personal investment, venture capital institutions, public sector sources, or public equity. (Stokes & Wilson 2006) Financial providers and their corresponding investment stages can be slightly simplified, but not limited to: as shown in Figure 1: Capital Relay Race. In this research, venture capital is regarded as the main investor and equity provider in the young and growing stages of enterprise development. 1.3 Financing requirements for life science start-ups Financing a high-tech start-up is a tedious task even for savvy entrepreneurs. In many cases, external financing of start-ups is crucial for the take-off and development of start-ups. Business. Read Less