The need for pre-seed funding and Business Angel Network has never been bigger in Norway, as it has become harder for early stage companies to mobilize private investors. The Norwegian Government has now accepted to use public capital to trigger private investment for early stage innovation – by establishing pre-seed funding and Business Angels Network.
The Business Association of Norwegian knowledge and technology based enterprises (Abelia) has for several years argued that the Norwegian Government should establish a new pre-seed scheme to mobilize private capital for early stage innovation. This argument has been supported by the Association for innovation companies in Norway; FIN – and they have together presented a proposal for the Ministry of Trade. The Government has now accepted the proposal – and explain this with the ambition to ensure that entrepreneurial businesses grow faster and succeed internationally at a time when the Norwegian economy need it.
The Ministry of Trade is interested in strengthening the incentives for moving private capital earlier along the startup chain, without generating more bureaucracy. For this reason the organizing of the pre-seed funding is done without establishing new organizations or structures – but by using the public agencies of TTO and incubators (NOK 50 millioner) and (NOK 48 millioner) to private investment fund to start up Business Angel Funding in Norway.
The Business Associations are very happy with this solution and see this as a strategy to make sure the incentives ultimately benefits the targeted groups of startups. They see activation of private capital as a good thing and that this is the most effective path to get more value out of the significant investments already made in public research and development.
The problem for the startups in the NPA region – is that little of the pre-seed funding goes to Northern Norway, and nothing of the Business Angel funding. This is what we call an Mattheus-effect: They who already has capital funding- would get more, and they without would get nothing (or small amounts).
Is this a policy framework issue – that is similar in the NPA regions – and something that should be highlighted by the GREBE-Project?