Well-attended seminar on government risk capital.

Can government venture capital help life sciences? The question was discussed by the government's investigators of state venture capital, private and public investors and entrepreneurs during a seminar on May 12. The answer was yes.

Nina Rawal, Jennie Ekbeck, Mårten Steen and Lars Bruzelius discussed state risk capital, chaired by Ingrid Heath.
Nina Rawal, Jennie Ekbeck, Mårten Steen and Lars Bruzelius discussed state risk capital, chaired by Ingrid Heath.

Department

In the spring of 2015, the government will conduct a review of state risk capital as the Swedish National Audit Office’s report from 2014 has shown a clear inefficiency in the current system. Life science is highlighted as one of the areas requiring active government venture capital and there are many concerns about how best to use government resources to strengthen the life science industry in Sweden.

SwedenBIO therefore organized together with PwC and Lindahl “The hunt for capital”. A seminar where both private and public life science investors, together with representatives from companies and the government’s special investigators, presented and discussed their observations and ideas.

Proposal for state funds for life sciences

Jennie Ekbäck, Umeå Biotech Incubator, opened the seminar by noting that only 2% of today’s VC investments are in small start-ups. According to Ekbäck, this is an important problem that results in start-ups having a very hard time finding capital to continue operations. Jennie Ekbäck emphasized the importance of a mix of both large and small companies to achieve a balance in the Swedish life science industry ecosystem. Furthermore, Lars Bruzelius, SWElife, presented a proposal for at least 3 state VC funds and a “pre-seed investment fund” to increase investment in start-ups and seed projects. This solution, together with ALIS presented by Umeå Biotech Incubator, could help strengthen the life science industry in Sweden, according to Bruzelius.

Entrepreneurs and state aid rules

Patrik Sundh, Cline Scientific, contributed with his company’s history and gave an insight into how the current situation can affect a small start-up company in terms of raising capital. Niklas Karnros, PwC, spoke about common mistakes that start-ups make in the search for capital. Ulrika Salomon, Advokatfirman Lindahl, provided information on what state aid is, the impact of the EU and the regulatory framework.

International capital important

A further observation was the need to attract foreign capital to Sweden. According to Nina Rawal of Industrifonden, this should be achieved by first investing outside Sweden’s borders to create international credibility. Mårten Steen, HealthCap, also stressed the need to attract more international resources to Sweden, but also said that small companies need to go more global and use the expertise available around the world. He said that it should be easier to invest in Swedish companies and that government investors should be more willing to take more risk.

Thoughts from the investigator

Hans Rydstad, the government’s investigator of state venture capital, presented that there are opportunities to streamline the state’s efforts and stated that: “You have to be able to deal with a changing reality”. According to Rydstad, it is important that the whole chain works, but parts of it can currently be improved. He stressed that the share of variable capital is not as large as many people think, but that existing ones should be reallocated to provide more support for the early stages. The final proposal from Rydstad will be published in mid-June with improvements that will hopefully lead to a strengthened ecosystem and a life science industry where Sweden is at the forefront.

Presentation by Joanna Daffy.

Presentations from the day

Jennie Ekbeck, Umeå Biotech Incubator
Proposal for sustainable funding of early stage life science companies and projects in Sweden.

Lars Bruzelius, investigator SWELife
International lessons – this is how Sweden should organize public venture capital.

Patrik Sundh, Cline Scientific
From business angels to the stock market – navigating the maze of fundraising.

Niklas Karnros, PwC
The most common mistakes companies make when raising capital.

Ulrika Salomon, Advokatfirman Lindahl
The impact of state aid rules.

Nina Rawal, Industrifonden
A government investor’s view on Swedish life science.

Mårten Steen, HealthCap
A private investor’s view on Swedish life science.