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New investment corporation ensures venture capital for Danish businesses

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Legal news
calendar 10. december 2019
globus Denmark

2019 is ending with good news for growing Danish small- and medium-sized enterprises. The European Investment Bank (EIB) is partnering with the Danish Growth Fund (Vækstfonden) on a new investment platform that, as a part of Investment Plan for Europe (the Juncker Plan), will secure more than DKK 2 billion to small- and medium-sized, Danish companies over the next 5 years.

The investment cooperation is creating a new co-investment platform where the EIB and the Danish Growth Fund each inject EUR 75 million and in collaboration with private investors, thereby, support the growth of Danish businesses. As investment in companies will be conditional on at least 50 pct. private co-financing, the total investment amount can potentially be more than DKK 2 billion.

In addition, the investment platform will be the first of its kind in the EU and will ensure that Danish innovative companies, who are not able to obtain venture capital in Denmark on their own, will not leave Denmark to obtain the necessary funding elsewhere. The initiative thus ensures that Danish companies can innovate and grow in Denmark.

The Danish Growth Fund

The Danish Growth Fund (Vækstfonden) is an independent fund governed by an independent legal act and an independent board of directors. The purpose of the fund is to promote growth and renewal in Danish enterprises, and since 1992 the fund has financed capital for more than 7,900 Danish companies in many different industries.

The advantage of seeking funding through the Danish Growth Fund is that the Growth Fund in many cases is more risk-averse than the Danish banks. Besides, it is often easier for a company to obtain co-financing from its bank if the Growth Fund has also provided financing commitments.

Danish companies, both start-ups and established companies, in need of funding to grow and innovate, and can create jobs, can get financial help from the Danish Growth Fund. In addition, the Danish Growth Fund can also provide financial help in succession. The Growth Fund offers various types of financing in order to ensure that companies can get a product that fits their needs.

The European Investment Bank

The European Investment Bank (EIB) finances projects both inside and outside the EU and works closely with the European Fund for Strategic Investment (EFSI). The EIB is owned by the Member States of the EU and aims to promote employment and growth as well as to promote EU policies outside of the EU and to support efforts to mitigate the effects of climate change.

IUNO’s opinion

At IUNO, we recommend that companies prior to applying for funding with the Danish Growth Fund has considered which type of financing suits the needs of the company best. In this connection it is particularly important that the documentation, and especially the corporate documents, meet the requirements of the Danish Growth Fund, which differ depending on what kind of financing the company wishes to apply for.

The investment cooperation is creating a new co-investment platform where the EIB and the Danish Growth Fund each inject EUR 75 million and in collaboration with private investors, thereby, support the growth of Danish businesses. As investment in companies will be conditional on at least 50 pct. private co-financing, the total investment amount can potentially be more than DKK 2 billion.

In addition, the investment platform will be the first of its kind in the EU and will ensure that Danish innovative companies, who are not able to obtain venture capital in Denmark on their own, will not leave Denmark to obtain the necessary funding elsewhere. The initiative thus ensures that Danish companies can innovate and grow in Denmark.

The Danish Growth Fund

The Danish Growth Fund (Vækstfonden) is an independent fund governed by an independent legal act and an independent board of directors. The purpose of the fund is to promote growth and renewal in Danish enterprises, and since 1992 the fund has financed capital for more than 7,900 Danish companies in many different industries.

The advantage of seeking funding through the Danish Growth Fund is that the Growth Fund in many cases is more risk-averse than the Danish banks. Besides, it is often easier for a company to obtain co-financing from its bank if the Growth Fund has also provided financing commitments.

Danish companies, both start-ups and established companies, in need of funding to grow and innovate, and can create jobs, can get financial help from the Danish Growth Fund. In addition, the Danish Growth Fund can also provide financial help in succession. The Growth Fund offers various types of financing in order to ensure that companies can get a product that fits their needs.

The European Investment Bank

The European Investment Bank (EIB) finances projects both inside and outside the EU and works closely with the European Fund for Strategic Investment (EFSI). The EIB is owned by the Member States of the EU and aims to promote employment and growth as well as to promote EU policies outside of the EU and to support efforts to mitigate the effects of climate change.

IUNO’s opinion

At IUNO, we recommend that companies prior to applying for funding with the Danish Growth Fund has considered which type of financing suits the needs of the company best. In this connection it is particularly important that the documentation, and especially the corporate documents, meet the requirements of the Danish Growth Fund, which differ depending on what kind of financing the company wishes to apply for.

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Aage

Krogh

Partner

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The team

Aage

Krogh

Partner

Anna

Bjørk Dahlin Irvold

Senior legal assistant

Matilde

Grønlund Jakobsen

Associate

Pernille

Skall Søby Nielsen

Legal assistant

Signe

Kræmer Pedersen

Senior legal assistant

Victoria

Valentin Olsen

Junior legal assistant