What is cross-border investments made of?

Along with Business Angels trainings, one of the Nordic Angel Program goals is foster cross-border investments across the Nordic region. In one and a half years, the NAP program engaged almost 400 investors into 12 training programs simultaneously ran in 4 countries with an average of 20% cross-border investors enrolled in syndications that sum almost €2 million.
Just before the summer break, NordicBAN hosted a session to discuss the major challenges and the future of cross-border investments in the Nordics. The session was held at EBAN Annual Congress 2019 in Helsinki, one of Europe’s largest and most international business angel events. Prior to the session, a survey was conducted with the participants and a full room of 32 business angels were gathered in the session to discuss the topic.

Cross-border session at EBAN Helsinki 2019

​From the data of 21 Business Angels that participated in the survey, 27 out of 148 investments (18%) were executed abroad. Estonian investors that participate in this survey seemed to be especially familiar with the concept of cross-border investments in their neighbor Nordic countries, and at stepping outside their home investment ecosystem.
The participants explained three main reasons for cross-border investing: a) the reach of a broader startup deal flow, b) the reach of new markets and portfolio diversification, and c) international networking. All the three reasons had the same number of votes, followed by d) to discover new startup cultures, and finally e) for potential exit. The discussion supports the interest of Business Angels for cross-border activities as mainly triggered by trust, curiosity and passion.
However, access to deal-flow was considered the least of their problems when regarding the biggest challenges in investing cross-border. Developing a network, finding potential co-investors, and further dealing with cultural differences was considered the most difficult aspects of investing abroad, followed by the technical aspects of due diligence such as legal & taxation.

---

"I think it all boils down to trust. Early stage investors invest in startup teams they trust, together with co-investors they trust. This becomes even more important for cross-border investments, as each ‘remote’ investor cannot be close enough to the relevant startup team. So unless you trust a local co-investor, and her or his relationship with the startup team, the natural reaction would be to say no to the investment.”
​
Christian Wig, a Norwegian business angel who has also participated in the Danish, Finnish and Estonia NAP programs

The vast majority of the participants (77%) see the New Nordics as very distinct investment landscape, and (92%) believe that a better connected Nordic&Baltic investor ecosystem would create better business opportunities. NAP can provide a big support for business angels looking for taking part in international syndications. With pre-organized training program and international collaboration, structured and curated deal flow, as well as all technical support from the local BANs (Business Angels Networks) and very experienced lead angels. Furthermore, the program provides a safe space to build relations, and the Nordic region is seen as a place where is easy to develop trust in the peers (62%), which is extremely important once the participant angels (70%) only co-invest with individuals or small informal groups that they personally know.

The 2019 NAP Fall programs are the last chance for you to take part in this amazing endeavor! The last NAP batch will be also dedicated to increasing cross-border investments based on the numerous learnings from the previous trainings.​The national programs are hosted by the local angel networks (Estonia), (Finland), (Denmark) and in close cooperation with the main startup events in each region.

Stay Tuned! New calls for applications are coming soon!  
Investors and Startups can apply here: nordicangelprogram.com