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Why the Nordics are an entrepreneurial gold mine

Why the Nordics are an entrepreneurial gold mine

Spotify, Klarna, Unity… It’s no secret that the Nordic ecosystem is an entrepreneurial stronghold, but… why?

Come with me in taking a look under the hood of the Nordic ecosystem; we’ll explore three key factors in the entrepreneurial success of the region – and what makes us excited as a seed investor active in the Nordics.

The Nordics: Sweden, Finland, Denmark, Norway, and Iceland

1. High Trust

Trust is a fundamental element of social capital. That is to say, it is one of the key factors in creating social well-being and comes with economic advantages.

The Nordic countries have the highest level of trust in the world, measured by the aptly named ‘World Trust Index’. Norway, Sweden, and Denmark (closely followed by The Netherlands) have the highest levels of trust from the 60 nations measured in the research paper analyzed, and Finland and Iceland rank in the top ten, not far behind.

Source: https://www.econstor.eu/bitstream/10419/44134/1/394929810.pdf

Why does trust matter?

You may be asking: what does trust and well-being have to do with entrepreneurship? Good question. There is a strong connection between a high-trust culture and business success. The connection is so strong that it can reasonably be argued that founders, who care deeply about the financial wellbeing of their business, should make building a high-trust culture a top priority.

In particular, high-trust has been shown to relate to three main business success outcomes. Companies with trust-based cultures typically enjoy:

  1. Stock market returns approximately two to three times greater than the market average
  2. Turnover rates that are approximately 50 percent lower than industry competitors
  3. Increased levels of innovation, customer satisfaction, employee engagement and organizational agility.
Source: https://s3.amazonaws.com/media.greatplacetowork.com/pdfs/Business+Case+for+a+High-Trust+Culture_081816.pdf

Here I am citing research by the Great Place to Work, an authority on global workplace culture, having lead research in this field since 1992.

With high-trust baked into the Nordic culture, founders have a solid foundation for success moving forward. And that’s not all… In fourth place, the Netherlands is also a leader in social trust. With our Dutch roots at Peak Capital, we feel strong chemistry between us and our northern neighbours – a crucial factor in creating founder-investor fit in the seed stage.

2. Flat-hierarchy and willingness to delegate

In business – and especially early-stage businesses – speed and agility are key. How can teams be fast and agile? Next to trust, flat hierarchy, and willingness to delegate help teams make (good) decisions quickly.

“No one does it well the first time. No one is naturally good at letting go of something they care deeply about. So, I think you just have to give yourself permission to screw it up for a while. You can internalize that it’s important to delegate and give people authority, but you won’t do it well the first few times. Just continually try to get better at it.” – Sam Altman (High Growth Handbook)

The Nordic countries are yet again leaders when it comes to these key factors. Below you can see how Sweden, Norway, Finland, Denmark, and Iceland rank on the willingness to delegate compared to the world median:

Willingness to delegate authority

added UK for comparison. Source: http://reports.weforum.org/global-competitiveness-report-2018/

3. Strong, stable economies and angels with exit experience

The Nordic region includes some of the world’s most advanced technology nations that together make up the eleventh largest economy in the world.

With strong and stable economies, the five countries together make the Nordics the eleventh largest economy in the world. The Nordic region includes some of the world’s most advanced technology nations and can rightfully claim to be one big high-tech cluster.

A unicorn powerhouse and an ecosystem that gives back.

The Nordics have created some of Europe’s most valuable companies like Spotify, Klarna, Kahoot, Skype, iZettle, Unity, Zendesk, and the list goes on. There are still a lot of unicorns in the pipeline, too.

Source: Dealroom 2018 – some changes happened since then

These past, present, and future successes are good news. The founders and early employees of these companies – as well as the investors that backed them – have capital from high profile exits to reinvest. The result? More angel investors in the scene to back founders in the pre-seed and seed stage. In short: success breeds opportunity.

Conclusion… we’re headed north!

Seed investor in the Benelux, DACH, and now… the Nordics.

As explored above, the Nordics sets themselves apart by:

  1. A High-trust culture (similar to the Netherlands where we have our HQ)
  2. Flat-hierarchy and high willingness to delegate
  3. Strong and stable economies with successful entrepreneurs committed to giving back to the ecosystem

The 3 reasons are but the tip of the iceberg of what makes the Nordic region an entrepreneurial gold mine… and why we are excited to focus more of our seed investment in this region. After 13 years of experience as a seed investor in the Benelux and then the DACH region, we are setting our sights up north.

As entrepreneurs ourselves, we understand what it takes to run tech companies. We are hands-on to help founders run their business more successfully. We value the importance of founder-investor fit, and feel that close collaboration is created by the high levels of trust and communication style.


About Calin

As a disclaimer, I lived in Norway most of my professional life (6 years) and worked closely with Swedes and Danes and fell in love with the country, values, and culture so I might have some bias. Yes, it was because of a girl, and yes, I know how to cross country ski. 😀

For the past 6 years, I have been around the start-up ecosystem in Norway and the Netherlands: first as founder, then as the expansion manager for No Isolation, and later on as a fundraising adviser for start-ups and mature companies. At Peak Capital, I focus on our sourcing and network in the Nordic region.

You can find me playing tennis, competing in triathlons, and enjoying a Finnish Sauna.

Nordic founder? Connect with me at [email protected], on Linkedin, and, of course, Twitter.


Curious about the seed investment scene up north? Check out our guide to seed investors in the Nordics here.