The Danish Startup Ecosystem Guide 2024 - Magazine - Page 35
preneurship and innovation, often with
higher goals of growth and job creation or
broader societal agendas in mind.
There are many soft funding programs
with different focus areas, but some of
the activities you can get soft funding
for include research, development, pilot
testing, acquiring new equipment and
hiring external consultants.
Free money for
promising ideas
Growth companies require capital. Soft funding can be
the right way to develop and prove the solution before
customers start generating revenue and venture
capitalists are ready to invest.
D
eveloping a startup costs time and
money, and especially innovative
early-stage startups should consider raising soft funding.
Soft funding is a form of 昀椀nancing that
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provides 昀椀nancial support to startups
without requiring ownership of the company. It is typically provided by government agencies, non-pro昀椀t organizations,
and other institutions that support entre-
A boost for the risky
Soft funding gives startups access to
funding that they may not be able to get
from traditional sources such as business angels or venture capital. This can
be especially true for early-stage startups that don’t yet have a proven business model or revenue stream, causing
investors to assess the valuation of their
business very low.
Soft funding often targets areas that
may be too risky for traditional early-stage investors - for example, complex
innovation with high risk, social and environmental impact or projects that aim
to create more diversity and inclusion in
the startup ecosystem. Other times, soft
funding can be used to leverage early-stage investors’ money.
Soft funding often aims to bene昀椀t society as a whole in some way. However,
soft funding is not altruism: startups are
expected to build a viable business, and
most soft funding programs also require
co-funding from the company in the
form of cash or work hours. In addition,
many soft funding programs offer mentoring, training and other forms of support to help startups grow and succeed.
Get help with the opportunity
There are many opportunities for soft
funding; at regional, national, Nordic
and European levels. This means that it
can be dif昀椀cult and resource-intensive
to 昀椀nd the relevant grants and programs
before preparing an application that may
not be approved.
Fortunately, there are several options
for help. For example, highly specialized
consultancies like Nordic Innovators
can help identify and subsequently
prepare applications for Danish (e.g.,
Innobooster), Nordic, and European
funding programs.
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