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Paving the way for Swedish startup entrepreneurs

Sweden needs more bold entrepreneurs who dare to start new businesses. Unfortunately, Sweden comes out at the bottom in the Global Entrepreneurship Monitor that measures entrepreneurial activity. On the other hand, Sweden comes out on top in the EU study “European Innovation Scoreboard 2008” for having the best innovation performance in the EU. The background to this paradox is an economy with a regulatory framework adapted for salaried employees in large companies. Taxation is unfavorable for owners/entrepreneurs and the cultural attitudes are still somewhat negative outside the hi-tech sector.

Sweden: leading in EU Innovation Performance (ref: EIS 2008)

Sweden: leading in EU Innovation Performance (ref: EIS 2008)

I believe that one of the major obstacles for entrepreneurship in Sweden has been the absence of role models in Swedes’ social networks. People who have succeeded as entrepreneurs can inspire others, disseminate their experiences, and provide mentoring and coaching for their community.

However, if one wants to start a company in Sweden, more and more organizations and support structures are being put in place to pave the way for you. Science based startups have the best support structures but startups in the rest of the economy are also getting more support. Venture Capital is usually the first that comes to mind but VC is only relevant for some types of startups. The importance of VC is often exaggerated. Most startups generate their own capital internally and manage to launch without formal VC funding.

Here is a quick overview of some actors in the Swedish Innovation System for startups, mostly based in the Stockholm region.

  • Venture Cup, founded in 1998 is a competition to develop the best business plan. Participants get coaching and support from experienced entrepreneurs in four regional chapters and the twelve best teams get selected for the national final.
  • Connect Sweden, founded in 1998 with support from IVA (Royal Swedish Academy of Engineering Sciences). Connect is a matchmaking and networking organization. They have networks of angel investors, of mentors, and of potential board members. They offer business plan coaching and put entrepreneurs in contact with members of their network. Partners are Tillväxtverket, EU, Industrifonden, and Vinnova. Not just for startups and not just for high-tech firms. Connect is part of the global Connect network that initially was founded in 1985 at The University of California, San Diego.
  • STING (Stockholm Innovation & Growth), founded in 2002 and based in Kista is an incubator for hi-tech startups. The main partners are Innovationsbron and KTH.
  • Startup, a hands-on course in entrepreneurship that offers coaching and support. Managed by KTH Innovation and STING and aimed at technology based startups.
  • SSES (Stockholm School of Entrepreneurship) founded in 1999 by the five major universities in Stockholm. Offers university courses in entrepreneurship from undergraduate to doctoral level.
  • KTH Innovation (one of the eight Innovation Offices). KTH Innovation is the first single point of contact for KTH faculty and students and offers advice about patenting and business coaching.
  • “The eight Innovation Offices”. Starting in 2010 the Swedish government will spend around 5 million Euros/year on eight innovation offices located at the major Swedish university campuses. The aim of the offices is to facilitate commercialization of scientific discoveries by offering support with patenting and hands-on entrepreneurship coaching.
  • Innovationsbron, a government agency founded in 2005 for the commercialization of hi-tech innovations. They co-finance 21 regional incubators connected to universities and provide loans and angel financing.
  • IQube, founded in 2004 is a private incubator.
  • Verification, a program for verification of science based innovations run by Innovationsbron and Vinnova (see my previous blog post).
  • Vinnova (The Swedish Governmental Agency for Innovation Systems), the giant, though not much funding is directly targeted for startups (see my previous blog post). One of their reports provides an overview of all available government funding for SMEs, mostly R&D and funding for corporate growth.
  • Almi företagspartner, the only government agency that directly offers loans for startups outside the hi-tech sector.
  • Tillväxtverket, (Swedish Agency for Economic and Regional Growth). Offers free one day seminars about starting your own company, they also offer free phone support at 020-351010.
  • Verksamt, is a new web service managed by Tillväxtverket in cooperation with Bolagsverket (Swedish Companies Registration Office) and Skatteverket (Swedish Tax Agency). It contains general information about starting, running, and closing down a business firm.
  • YEOS (Young Entrepreneurs of Sweden), founded in 2008 is a support and networking organization for young entrepreneurs in all sectors of the economy.
  • Drivhuset, founded in 1993 is a support organization for university students that want to become entrepreneurs with ten regional chapters.
  • SVCA (Swedish Private Equity & Venture Capital Association), the industry organization for the VC industry. They have a catalogue of all their members on their website.
  • SiSP (Swedish Incubators and Science Parks), the industry organization for Swedish incubators. They have a catalogue of all their members on their website.

It remains to be seen if these support programs are enough to overcome the historical disadvantages of low entrepreneurial activity.

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