Investment Profile

SEED Capital is the largest early stage venture fund in Denmark. We invest in technology companies and medtech companies at the seed or even pre-seed stage from Denmark and southern Sweden. We invest in classic venture companies meaning companies that as a minimum will provide an opportunity for a 10x return on investment. The company should have a highly innovative solution and a scalable business model for entering an attractive market with a number of identified paths to exit.

Because of our strong partnership with the government funded innovation incubator Pre-Seed Innovation A/S we are able to invest € 250-750.000 at the early stages of a company’s development, allowing them an opportunity to prove their technology and business.

Depending on capital need, SEED Capital can invest up to € 9 million in the following rounds – preferably in syndication with international investors. We take an active advisory role as an investor and will normally take the position of Chairman of the Board in the company until a skilled alternative is identified.

 

Worldwide significant trends are defining the need for Cleantech innovations. World population is growing fast from 7 billion to 9 billion in 2050. Living standards and purchasing power are improving for almost a billion people in China, India, Asia and Africa. Migration from rural areas to cities is significant.

The combined effect is a tremendous increase in the world’s use of resources, such as water, energy, food, metals, etc. With this follows lack of supply, higher prices and general scarcity. The heavy draw on resources generates negative side effects such as waste, pollution, and CO2 emission.

The challenges are immense and the need for new solutions is evident. The world must and will adapt.

Therefore, Cleantech is much more than renewable energy. Cleantech is much more than the hype. Cleantech is innovation after innovation which will help sustain a high standard of living for the world population and the need for new innovations will only increase in the years to come.

SEED Capital seeks Cleantech innovations within several categories. Innovations that can improve the effectiveness of renewable energy. Materials that are stronger, lighter or more durable. Solutions that can limit pollution or handle waste. Products or solutions for better energy effectiveness. Innovative production processes which consume less energy. In short everything and anything which will help the world make better use of our limited resources.

We look forward to meeting you and your innovation.

Cleantech portfolio         Cleantech investment team

In almost every country in the world the average age of the population is rising. Among the more developed countries average age rose from 29 in 1950 to 37.3 in 2000 and is forecasted to rise to 45.5 by 2050. Even though this trend is most significant in the developed economies, it is without a doubt only the first indicator of a trend that is apparent all over the world.

The global aging development is partly due to the achievements made within Life Sciences already as well as the sharply rising wealth of the middle class populations in mayor economies like China and India. With an increasing buying power within some of the world’s largest populations it is apparent, that the need for continued developments within Life Science will continue to be in high demand.

Denmark is a significant Life Science hotspot with top level research institutions and several major pharmaceutical companies.  It is SEED Capitals intent to seek out companies that can build upon or utilize the unique competencies within the Danish ecosystem.

We prefer company founders who can show significant cost control and who do the outmost to keep spending at a minimum in particularly the early stages. This also indicates a preference for companies with narrow product portfolios.

We look forward to meeting you and your innovation.

Medtech portfolio                Medtech Investment Team

The world is currently experiencing the rise of a 2nd industrial revolution driven by IT. The old rules of doing business no longer apply with the emergence of social media, continuous access to high-speed web connections and the ever-increasing importance of mobile phones. IT companies can be developed at a mere fraction of its former cost, virtual channels sell virtual products, the way we collaborate undergoes dramatic change and companies can grow to staggering heights in a matter of years.

Denmark has an optimal position for taking advantage of this revolution, due to our high education level, an IT-driven government and our IT-knowledgeable population. Denmark has a history of educating students with strong technical skills and a history of creating significant IT companies.

SEED Capital makes IT investments broadly within software, mobile and hardware. We acknowledge that the IT industry is currently developing much faster than anyone can grasp and that new opportunities arise from market avenues that no one could anticipate. It is often in the mix between known solutions and new technology or between known technology and new challenges that unexpected opportunities arise, and we would rather be surprised than discard solutions not within our target focus.

Our main criterion is that your venture has the opportunity to scale significantly and that you are able to document a market demand for what you provide.

We look forward to meeting you and your innovation.

Technologies portfolio                       Technologies Investment Team

Getting our attention

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When contacting us with an investment opportunity there are no specific requirements to either style or format. We don’t necessarily require that you have a complete and elaborate business plan, a complete team or the answer to every question regarding the future of your technology, market and customers.

Your company is still early in its process and that’s ok. We like to meet and help entrepreneurs and if you are ok with hearing our sincere opinion, we’ll be happy to hear how far along you are.

The best way to tell us about your project is to send us an executive summary or an email explaining your idea. Here is an example of a general executive summary, which should get you started.

We always do our best to respond to your initial contact within 7 working days.

We made our own executive summary back in 2010. Have a look.

There are a number of topics that we would like for you to start considering before contacting us. It's ok if you don't have answers to all these questions.

Technology

  • At what stage is the technology needed for this product today?
  • What resources are required to make the product ready for market?
  • How innovative is this compared to current solutions?
  • Can the product efficiently be protected by patents or other means of protection?

Market & competitive situation:

  • What problem does your product solve?
  • Who solves this problem today and how?
  • Who (or how many) would like to have this problem solved?
  • What advantages (money or time) comes with solving this problem?

Business model & value chain:

  • How will you make money?
  • Who do you need to partner with?

Team

  • Who are the people behind this organization?
  • What additional people/competencies are needed and how will you accommodate this?

Funding and legal issues

  • What kind of funding do you need to reach which milestones?
  • Who owns the rights related to the product?
  • If the company is already established, who are the owners today and what activities have been initiated so far?

Exit

  • How and when can we, as investors, expect return on our investment?

Here is an example of a general executive summary, which should get you started.

A business plan could be many things and can be phrased in many ways. In our context the business plan is the presentation that provides an overview of how far along you are in your process. There might be a more in depth document behind this that goes into more detail.

Here is an example of a presentation, which should guide you along building your first business plan.

Investment Process

Our investment process is in seven steps, where each successful step grants access to the next. From this we narrow down 500 proposals to 15 investments.

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Project Screening

The First step in assessing an investment opportunity is to explore whether your project is (or could be) in accordance with our investment profile. This is done via a formal project screening where the investment manager evaluates parts of your project like your business model, market, team, technology, patents and financials. The investment manager also assesses whether the project is within our ethical guidelines.

First Meeting

If your project could be relevant for SEED Capital a first meeting is held with the purpose of learning more. Together, we will explore the potential for continuing the dialogue, what additional information is needed and which steps should be taken for this to be realized.

Internal Evaluation

If the first meeting is positive your project will be discussed internally to evaluate its potential and under which conditions it would be relevant for SEED Capital to participate. At this part of the evaluation, we sometimes contact our expert network to clarify and verify risks and opportunities. 

Due Dilligence

If SEED Capital believes your project has sufficient potential, we will evaluate your proposal in more detail, i.e. the factors needed for the project to become successful. The process is focused on technology, markets, activity plans and budgets, team and legal matters.
 
This part of the process is time-consuming, and it is expected that you participate in securing the needed information. Often we engage field experts to clarify how strong your value proposition is in the marketplace.

Term Sheet

If the due diligence reconfirms our assumptions SEED Capital will provide a brief proposal of the investment in a term sheet. This will include a description of:
 
  • The size of the expected investment
  • Financial and legal terms
  • Company ownership structure
  • Milestone payment tranches (technological, market-related, organizational)

Presentation & Approval

Before final commitment to an investment the project goes through our internal approval process.

Once all is approved the final details of the agreement needs to be settled and the documents needs to be prepared and signed.

We have standard documents and legal resources to finalize the process.

Investment

In most cases, the first investment is a pre-seed investment done together with and primarily by Pre-Seed Innovation A/S.

The pre-seed investment is made, in order for your project to prove that your technology will work, that the market will adopt it and that your team performs. Think of it as a live due diligence. SEED Capital takes a minor stake in the company including an option to invest more significantly at a later stage.

And then the real work starts.

Team

The SEED Capital team has significant experience with establishing, financing and developing start-up companies.

Where to meet us