Career & Legal Advice

Capital, loans and advice to start up your own business

There are other ways to obtain financing for your business than going to your bank. Particularly, if you are an entrepreneur with a new business that is still in the startup phase, your bank may be unwilling to give you a loan. You will have to look elsewhere for loans or entrepreneurial support to start your business.

Whether you have just started up a new business, developed a new product or need additional capital to develop a business with growth potential, your local bank is not the only source of financing. Other options include business angels, venture funds, accelerator programmes, loans via the Danish Growth Fund (Vækstfonden), various public entrepreneurial support schemes and crowdfunding.

Business angels and venture funds

A good place to get entrepreneurial support is through an investor. A good investor will not only provide financial support, but will also give advice and act as a mentor in the startup phase of your business. A business angel is an investor specialising in support for startups and entrepreneurs. The Danish Business Angels network provides financial and other entrepreneurial support for startups (including high-tech startups), and helps businesses in connection with changes of ownership, including generation transfers, and turn-arounds. In addition to providing funding, the investors will usually become actively involved in managing the business as members of the board of directors, or, in exceptional circumstances, as members of the executive board. The network currently has 150 active investors and support businesses. Business angels are often associated with a venture fund whose very purpose is to provide financing and entrepreneurial support for businesses at a very early stage.

Accelerator programmes

As an entrepreneur or a startup, you can benefit from entrepreneurial support by joining an accelerator programme. Several different players in Denmark offer accelerator programmes including a number of mentoring schemes and training and sparring sessions for entrepreneurs and startups. An accelerator programme usually ends with a pitching round where, as an entrepreneur or a startup, you will have a chance to pitch your business idea to different investors. Accelerator programmes can be private initiatives or they can be publicly financed, and they focus on a broad range of industries.

Loans for starting up a business via the Danish Growth Fund (Vækstfonden)

If you’re looking for a loan to start up your business, then the Danish Growth Fund may be the place to go. The Danish Growth Fund is a state investment fund. It is an independent fund regulated by its own Act and governed by a board of directors. The Danish Growth Fund invests equity in partnership with private investors, and the fund provides loans and guarantees in collaboration with Danish financial institutions. The target group is small and medium-sized businesses.

Read more about the services offered by the Danish Growth Fund. 

Entrepreneurial support

Public entrepreneurial support in Denmark is offered by a number of business service centres throughout the country. Your municipality can guide you on the entrepreneurial support available in your local area. Courses on entrepreneurship will often be available, and there may personal guidance from a skilled entrepreneurial consultant. Entrepreneurial support is organised in many different ways in the different municipalities, but on startvaekst.dk, there is more information (in Danish) about your municipality's entrepreneurial support schemes. Moreover, regional Business Link centres (Væksthuse) have been established throughout Denmark. They offer impartial advice on bank loans, venture capital and grants. The regional Business Link centres collaborate with the Danish Trade Council and the Danish Export Credit Fund, among others. The regional Business Link centres can also help with advice and inspiration on:

  • Sales and marketing
  • A stronger international profile
  • Lean operation
  • And many other things

Crowdfunding

Crowdfunding is a relatively new concept in Denmark, but crowdfunding has already helped many entrepreneurs and startups to a successful start. There are four overall concepts within crowdfunding:

  • Donation crowdfunding - where people donate funds to a project without getting anything in return.
  • Reward crowdfunding - where people donating funds receive something in exchange of their contribution, for example the product they have crowdfunded.
  • Equity crowdfunding - resembles reward crowdfunding, but instead of being rewarded with a product, investors obtain partial ownership of the company they crowdfund.
  • Debt crowdfunding - where people lend money directly to businesses and projects without involving a bank.

There are no special tax regulations for crowdfunding. Consequently, the general tax regulations apply. What this means for your tax payments depends on the type of crowdfunding.
Read more at SKAT (in Danish).

IDA's collaboration with Lån & Spar

IDA has a partnership with Lån & Spar Bank, called LSB Business. This is specifically aimed at people who are self-employed or who are about to start their own business.
Read more about LSB Business.