How to get money for your business idea

The first University of Copenhagen (UCPH) student who struggled to receive money for his ideas was perhaps the astronomer Tycho Brahe: in the 16th century he extensively toured Europe to raise money to finance his research.

Today, things are less cumbersome for entrepreneurial-minded students and there are plenty of resources you have access to.

It’s time to take that good idea out of the closet and make it real.

How to get money: micro funding

A good starting point is Katapult, one of the University incubators. The team dispenses hot coffee and friendly advice to budding entrepreneurs and, three times a year, they also hand out up to 35,000 DKK to promising student ventures. All you need is your idea and a team.

”So far it’s been a success: 63 per cent of students who received the money created a company and 21 per cent of those hired employees besides themselves,” says Peter Ottesen, project leader at Katapult.

The money can be used for a variety of things, from a new laptop to attending a seminar.

”We got new equipment, software licenses and hired an accountant,” says Lasse Nørregaard, who started Daybuilder Solutions in 2011 with fellow Computer Science student Philip Løventoft. ”We also had access to office space and legal counselling,” he adds.

If you need prototyping, look into a Videnkupon, that grants access to labs and other facilities from a list of pre-approved institutions, while the Danish Foundation for Entrepreneurship offers a number of micro-grants (up to 50,000 DKK) for student companies at the idea or startup stage. Need an extra hand? The European scheme Erasmus for Young Entrepreneurs allows you to hire an international student as an intern for up to six months.

Check the Factbox for the complete list of opportunities from public and private institutions.

Ask the crowd

Another possibility is to bring your idea to the street and look for supporters.

”There are four different crowd funding possibilities: crowd investing, crowd lending, crowd pre-sales and crowd donations,” says Maxie Matthiessen from Ruby Cup, the CBS-born startup that last month raised more than 200,000 DKK on Indiegogo. ”We used a combination of pre-sales and donations. The obvious benefit is that you don’t have to give equity away but basically get free money.”

The key to success, according to Matthiessen, is showing commitment to the cause. To promote their product, Matthiesen ran around the streets with menstrual cups.

”The fact that I was ready to make a fool of myself convinced people that we really stand behind our cause. The crowd liked that approach and, even if we had some slow days in between, at the end they rewarded us for keeping going.”

Big money

If you want to go after the big money, you better be fit. As a rule of thumb, your product should be about ten times cheaper, faster or more efficient than its competitors. Still think you have it? Then it’s time to look for investors.

You can receive public capital from Innovationsmiljøerne (up to 3.5 million DKK) or look into private venture capitalists. This is not free money: it will typically cost you between 25 per cent and 40 per cent in company shares.

”You should remember that venture capitalists are out there to make a profit,” says Ottesen. ”It’s a good idea to bring in someone who has experience in this field to help you through the negotiations.”

Think like an entrepreneur

With all the money talk, it looks like entprepreneurship is all about chasing investors. This is not actually the case, says Ottesen.

Successful entrepreneurs, shows a recent study, are the ones who adapt to the present situation and turn it to their own advantage. They look at whatever resources they have at hand and make short-term decisions on the fly, often in a direction that costs them little or no money.

And remember: your best investor is always your customer.

”As good as your idea might be, it’s nothing unless someone is interested,” says Ottesen. ”Would anyone want your product or service? Who are they? Go out there and look for them.”

universitypost@adm.ku.dk

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