VENTURE CUP ALUMNI REPORT 2014/2015

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VENTURE CUP ALUMNI REPORT 2014/2015Published May 2015Produced and financed in collaboration withDanish Foundation for Entrepreneurship - Young Enterprise

Venture Cup DenmarkPorcelænshaven 72000 Frederiksberg

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In its 15 years of existence, Venture Cup has grown to represent all the Danish universities, hosting competitions for more than 1,500 students each year and offering an array of supporting activities for entrepreneurial students. With more than 6,000 students having participated in Venture Cup competitions to date, there is an opportunity to gain insight into the development of budding entrepreneurs over the course of several years. This report aims to shed light on this development and also to showcase the impact and development of Venture Cup.

The findings of the report show that Venture Cup’s efforts to engage and support students in entrepreneurship has had, and continues to have, a great impact.

It is clear that Venture Cup alumni share several positive tendencies. They continue to be highly active as entrepreneurs, starting new businesses, creating large numbers of jobs and generating impressive revenues through their companies.

The survey reveals that 49% of alumni continue are owners or co- owners of companies. Not only do they continue

to develop the businesses that they submitted to Venture Cup, 34% have gone on to CVR register new companies. On average, alumni companies have an annual revenue of more than DKK 1.7 mio which translates into an estimated total revenue in alumni companies of more than DKK 2.7 bn annually. It is further estimated that alumni companies have created close to 7,000 job positions in the past five years.

It is also evident that the students who participate in Venture Cup competitions are increasingly international, both when looking at their citizenship and also in their approach to establishing and internationalizing businesses.

Through graphs, analysis and case articles this report will demonstrate how students who participate in the Venture Cup competitions develop as entrepreneurs and develop their businesses.

EXECUTIVE SUMMARY

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Words from the CEO 2

Introduction 3

2015 alumni survey - method, analysis and findings 5

Key findings 5

Brief methodology 5

Analysis and results 6

Strongly driven entrepreneurs 6

Company establishment 8

Increase in commercial success 9

Job creation 11

Investment and funding 13

Born globals and internationalization 14

Entrepreneurship in university courses 16

Findings and conclusions 17

Full methodology 18

About Venture Cup 20

Who are the participants 23

Case articles 25

INDEX

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Venture Cup’s goal is to support and enable university student entrepreneurs in realizing their dreams, helping them to turn bright ideas into real projects and making them grow. Even though the creation of companies in this process is very important to us, so is the learning path of the students in trying to reach their dreams.

It is a key goal for us that as many students as possible develop their entrepreneurialcompetency for the benefit of society in general.

With this alumni report, we aim to gain a better understanding of our alumni and how they and their businesses develop. As the numbers and figures in this report show, Venture Cup alumni are very successful in establishing companies, attracting capital and developing their businesses. We are proud to see our alumni develop companies that contribute to economic growth and job creation in Denmark. Together with our partners, we are working hard to develop new initiatives that support and accelerate this process. At the same time, we are fully aware that there remains a great deal to achieve in order to unleash the full potential of students participating in Venture Cup.

It is important to mention that the positive development of alumni cannot be solely credited to Venture Cup. We work in harness with the great and growing efforts of all the Danish universities, as well as the contribution of partner organizations in the entrepreneurship eco system and endless voluntary contributions from professionals and businesses.

Human Shojaee

WORDS FROM THE CEO

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For the past 15 years, Venture Cup has worked tirelessly to provide access to knowledge, networks, partnerships, capital and more for students at Denmark’s universities. Through competitions, workshops, development programs and other initiatives, the organization has provided entrepreneurs with the skills, tools and experience to succeed in realizing their business ideas.

The purpose of this report is to:• Examine the development and

outcome of student entrepreneurs• Gain insight into the progress

of students who engage in entrepreneurship

• Shed light on the impact of support and development programs

• Provide greater understanding of the societal impact of supporting entrepreneurs

• Showcase the development paths and successes of alumni companies

In order to enable analysis of these fields, Venture Cup has undertaken a large survey round, in which teams who participated in Venture Cup in the period 2001-2014 were asked to fill out a questionnaire. These data have been combined with data from Venture Cup’s own database, as well as personal interviews, tto ensure an in-depth understanding of the fields of interest.

Understanding the role of students in the entrepreneurial environment

As a group, students are a massive source of entrepreneurial potential for Denmark. In 2012, the Danish government formulated an ambitious strategy for Denmark to become a hub for innovation, building on the distinctive Danish flair for innovation. This strategy entails Denmark’s becoming a country of solution-providers that engages with global challenges, such as a lack of clean water and the need to create

sustainable energy; this effort will also kick-start enterprise creation, job creation, and sustainable growth. The higher education sector is an important player in accelerating this change; the 250,000 students in Denmark constitute a unique potential resource of innovation. Venture Cup hopes to help realize this potential by introducing students to entrepreneurship and assisting them in the early stages of starting a business.

According to a report from FFE-YE from2014, the number of students who take entrepreneurship classes has increased from 7.8% in 2009/2010 to 13% in 2013/2014. This report also shows that a total of 302 entrepreneurship classes were offered at the eight Danish universities in academic year 2013/20141. Compared to the previous year, the number of courses offered has risen by 28, which represents an increase of almost 10%. This goes hand-in-hand with policymakers’ increasing demand for higher education institutions to undertake a broader role in society2.

INTRODUCTION

1 ”Effektmåling af entreprenørskabsundervisning i Danmark 2013” 02/2014 FFE-YE2 ”Danmark - Løsningernes Land” Pg. 3, 2013 Teknologisk Institut

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The main aim is for graduates to develop an eye for opportunities, be proactive, creative and self-directed, and to learn to thrive and innovate in an environment increasingly associated with uncertainty and complexity3.

The increasing interest in entrepreneurship in recent times has also been noted by Venture Cup, where numbers participating in competitions and programs have increased, along with the quality of plans submitted. This development is supported by figures showing that Denmark is the fourth most conductive environment in the world in which to start a business, according to denoffentlige.dk4. The factors that contribute to this development are the highly educated workforce, the ease with which a citizen can start a company and the country’s overall ability to adapt and proliferate to new technologies.

Students have traditionally been very well represented and far advanced in the fields of cleantech and environment as well as in services, but recent years have also shown a clear tendency of startups to focus on mobile and medtech solutions. Finally, there has been a clearly developing interest in social entrepreneurship, which has materialized through increasing numbers of participants in relevant competition categories and events.

Overall, there is great demand to increase the focus on entrepreneurship at university level, on the part of government, universities and students. Venture Cup aims to facilitate this effort and provide the universities with a platform on which the students can test their skills and receive support to develop their business ideas. In this way, Venture Cup is striving to facilitate the development of competent students and new companies.

3 ”Danmark - Løsningernes Land” Pg. 16, 2013 Teknologisk Institut4 “Danmark er det 4. bedste iværksætterland i verden” 20/11/14 http://www.denoffentlige.dk/

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KEY FINDINGS

2015 ALUMNI SURVEY - METHOD, ANALYSYS & FINDINGS

BRIEF METHODOLOGYA starting point for this alumni report has been to reconsider our perception of alumni. This year, the definition of “alumni” has been expanded to include every participant and team that has been a part of the competition, whether they made it to the final or not. We strongly believe that considering only previous finalists does not fully represent the influence Venture Cup has had on its participants. As a consequence, 5,620 members of our alumni group were invited to partake in the survey, with 369 individuals completing the online questionnaire.

The purpose of the survey is to present a picture of the development and successes of our previous participants.

However, presenting this overview is not without its methodological issues. Among other things, a rather small proportion of our previous participants completed the survey consequently, inferences, estimations and claims of causal relationships have been avoided. Rather, statistics descriptive of the current status of previous participants and teams are presented in the form of graphs, tables and charts. A more in- depth methodology can be found in the last section of this report.

VENTURE CUP ALUMNI TEAMS HAVE CREATED 2,149 FULL-TIME JOBS WITHIN THE LAST 5 YEARS.

MORE THAN 15% HAVE RECEIVED PUBLIC FUNDING.

24.4% ARE DOING BUSINESS INTERNATIONALLY AND 10% HAVE OFFICES ABROAD.

49%ARE OWNERS OR CO-OWNERS OF COMPANIES.

34%OF ALL VENTURE CUP ALUMNI HAVE REGISTERED A CVR BUSINESS.

31%REMAIN COMMITTED TO THE BUSINESS THAT THEY PARTICIPATED IN VENTURE CUP WITH.

30%OF THE ALUMNI OF 2009/2010 HAVE STARTED NEW COMPANIES.

IN 2015 THE ESTIMATED TOTAL REVENUE OF ALUMNI COMPANIES IS DKK 2,7 BN.

AVERAGE REVENUE IN ALUMNI COMPANIES HAS MORE THAN DOUBLED SINCE 2007.

NEA

RLY

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STRONGLY DRIVEN ENTREPRENEURS The data shows a strong entrepreneurial drive among the participants. 49% of the respondents stated that they are either self-employed or are co-founders of a company. The remaining 51% stated that they are no longer involved in company ownership. These statistics reveal a high degree of entrepreneurial drive among the participants. It is important to stress that the vast majority of the respondents participated in Venture Cup competitions between the years 2009 and 2014.

As Venture Cup’s competitions typically involve working in the conception stage of a startup, some participants may be testing out the role of entrepreneur, to see how it suits them. Therefore, it is natural that a portion of the participants do not go on to become professional entrepreneurs. A key goal for Venture Cup is to enable the students to gain skills and insights into entrepreneurship, which can be used whether or not they continue to operate in the startup environment. Intrapreneurship, and the ability to apply entrepreneurial thinking within larger organizations, is therefore a focus area. Unfortunately, the scope of this report does not allow for further research into this field.

To support entrepreneurship it is important to retain the participants in the startup environment, either through supporting their startup development process, or inspiring them to start up a new business

and using a previous, unsuccessful startup attempt as valuable experience, which will make the participants stronger future entrepreneurs.

While almost 50% remain active as owners or co-owners in a startup, as many as 31% of the respondents are still involved in the business with which they participated in Venture Cup.

Of the respondents, 18% are self- employed or co-founders of a new business that has not participated in Venture Cup. The graph below represents how these responses are divided when focusing upon the last five years.

ANALYSIS AND RESULTS

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The graph shows that the survival rate of businesses that have been a part of Venture Cup declines over time. This could be considered a natural process, owing to some of these entries into Venture Cup competitions being at the conception stage.

There does, however, seem to be a very strong entrepreneurial drive among Venture Cup participants. The graph shows that 26% of the respondents who participated in 2009/2010 have started

a new business; this rises to 29% of those who participated in 2010/2011. This indicates that the participants are able to capitalize upon the learning process they have gone through, and bring that knowledge into their future entrepreneurial pursuits.

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COMPANY ESTABLISHMENT With almost 50% of alumni indicating that they are currently self-employed or co-founders in a company, it is interesting to look at the degree to which the alumni companies have been officially registered. Investigating the CVR registration is also an important factor when assessing the success of the participants who indicate that they are still self-employed or co-founders. The responses show that 69% have registered their company with the Danish Business Authority. This number indicates that currently around one-third of all alumni go on to CVR register a company.

A reason for some of the teams to fail to register for a CVR number is that some of the ideas submitted to Venture Cup’s competition are heavily based upon research and prototype testing. This can entail several years of development and testing in a laboratory before the team is ready to present a product to the market. Before a product is ready to be launched, acquiring a CVR registration might not seem beneficial; on the contrary, it can seem to be a source of unnecessary administrative work. Nonetheless, these companies can still prove to be the most successful businesses in the future.

Venture Cup works mainly in the early stages of business development, in which participants might perceive themselves to be self-employed or co- founders, while they are still working on their business idea, but have not yet launched their product. But the

supporting programs launched by Venture Cup have shown that, given the right tools and support, the teams can be accelerated towards CVR registration within a short time-frame. Almost 70% of Venture Cup Booster Pack teams are able to register their companies within a year.

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INCREASE IN COMMERCIAL SUCCESS An increasing number of Venture Cup alumni companies are experiencing great commercial success. Based on the survey responses, it is estimated that the alumni companies generate a combined total yearly revenue in excess of DKK 2.7 bn.

The survey reveals that 6.4% of the alumni companies expect to have a revenue exceeding DKK 5 mio in 2015. On aggregate, the survey respondents, who constitute less than 10% of the Venture Cup alumni, boast impressive revenue of more than DKK 273 mio this financial year. Moreover, the companies expect a high degree of growth of 2.21 times current revenue. Compared to earlier surveys from 2007, average company revenue has more than doubled.

While the total expected revenue of the companies that have participated in the survey is DKK 273,550,900, an impressive 6.4% of the alumni teams participating in the survey stated that they expect to make more than DKK 5 mio in this financial year. One team expected to make as much as DKK 80 mio.

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The teams were also asked to estimate how much revenue they expect to generate in the following financial year. The answers show a significant projected increase in revenue for the companies, who in the current year expect to make up to DKK 9,999. The same companies now state that they expect to increase their revenue to the point of shifting revenue classes.

Year   Total  revenue   Participating  companies  

Average   revenue   pr.  company  

2006   23.275.000  DKK   44   528.977,273  DKK  

2014   273.550.900  DKK   157   1.742.362,42  DKK  

On aggregate, the alumni teams expect to generate DKK 605,238,600 in 2015, which is 2.21 times the amount expected in the current financial year.

The sharp increase in average company revenue and the emergence of larger companies indicates that the Venture Cup alumni companies have matured and expanded significantly since their founding. The alumni are succeeding in creating strong companies with impressive revenues and growth expectations.

In a similar survey, conducted in 2007, the total revenue of the participating teams added up to DKK 23,275,000. The survey in 2007 included only 44 teams, which makes the total revenue of the two surveys incomparable. However, average revenue per company may be compared. When comparing the two averages, a revenue increase of 230% per participating company between 2006 and 2014 is shown.

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JOB CREATION The survey respondents indicate that 684 job positions have been created in their startups since 2009, which translates into almost 7,000 job positions between all the alumni companies. Of these, more than 60%, or 4,000 jobs, are full-time and part-time positions.

The chart shows the number of employees by type of employment. The chart is based upon data collected from teams that have participated in Venture Cup, as well as from teams that have started a new business after participating in Venture Cup’s competitions. Aside from the number of full-time employees there is also a significant proportion of part-time employees, student workers and interns.

Interestingly, of the 219 full-time positions indicated in the survey, approximately half (108) of these positions are jobs created by teams that advanced to a Venture Cup final.

Based upon the survey responses, it is estimated that alumni companies have created close to 7,000 job positions since 2009. Given that few alumni from the early period of competitions in Venture Cup have participated in the survey, it has not been possible to give a valid estimate of job creation before 2009. It is, however, likely that the early participant companies have grown to create larger numbers of jobs compared to the more recently established companies, as their companies have reached more mature states of development.

The alumni companies are expanding; 65% of the teams replied that they expect to hire more staff in the year to come.

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The chart above clearly shows that the alumni companies are creating large numbers of jobs, employing professionals and students in various positions. With more than 4,000 full-time or part-time positions created within the

past five years, the alumni companies are making a noticeable contribution to the Danish job market.

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INVESTMENT AND FUNDING Alumni companies are receiving funding from a wide range of sources. Aside from personal investments and bank loans, 6.4% of entrepreneurs have managed to secure angel investments and 4.8% have received seed/venture capital. Furthermore, an impressive 15.2% have received public funding. Crowd- funding still plays only a minor role, in spite of the high degree of attention the funding platform is currently receiving.

While some companies rely on organic growth to develop and expand, many hope to find investors. An example of a Venture Cup alumni company that has secured funding, is the biotech company Orphazyme. The company has received more than EUR 35 mio in seed capital from Danish and international investors. Another example can be found in the case article about Cumulus Bio; the company, a recent participant in Venture Cup’s Startup competition, has secured DKK 30 mio in funding.

The majority of Venture Cup alumni are working on projects and in companies that are in the early stages of investment.

Among entrepreneurs, it is commonly agreed that it is very hard to find funding in the pre-seed and seed stages, an issue that leads many promising startups to close down. Traditionally entrepreneurs have countered this issue with self-financing and personal loans, bootstrapping their way to the later investment stages. Personal investment was the main source of investment for almost 80% of entrepreneurs in earlier international research1 In the graph below, however, we see that this figure is now significantly lower. Even when factoring in personal loans from friends and family fewer than 50% of entrepreneurs have invested in their own company. A main reason for this result is of course that the surveyed group consists mainly of students.

Another significant discovery, is the relatively high percentage of companies that have received public funding (e.g., micro grants). The fact that 15.2% of companies have received public funding of some sort should be compared with the equivalent number from the 2011 Venture Cup Alumni survey, in which only 8.1% had received public funding.

1. Osnabrugge, Robinson, 2000, Angel Investing

The alumni companies look to many different sources when financing their companies and many are able to secure significant investments. Rather than relying on private investment, the alumni find capital through public funding, angel investors, seed capital, venture capital, crowd funding, institutional investors and many other sources.

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A large portion of the companies currently operated by Venture Cup alumni are active internationally. This is very likely a result of the high degree of participation in the competitions by international students at Danish universities.

Among the Venture Cup alumni who have companies currently in operation, almost a one-quarter responded that they sell products or services internationally. The survey further revealed that more than 10% have offices or departments internationally. This goes to show that the young entrepreneurs that constitute the Venture Cup alumni are highly international in their scope. This notion is further supported by the fact that the respondents to this part of the survey,

participated in Venture Cup competitions between 2009 and 2014, which makes the majority of companies less than five years old. These companies have, therefore, internationalized very quickly or, they have been established as born globals.

BORN GLOBALS, INTERNATIONALIZATION AND INTERNATIONALS IN DENMARK

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This survey finding is supported by recent figures from the database showing that 44.75% of participants in the most recent Idea Competition were international students at Danish universities.

From this striking statistic, we may conclude that there is a rapidly growing interest among international students in Denmark in engaging in entrepreneurship and becoming part of the startup community. Venture Cup provides these students with an opportunity to test their ideas on a professional platform which introduces them to a nation wide network of likeminded entrepreneurs and business professionals.

With the combination of international ambition among Danish entrepreneurs and the international talent and knowhow added by the international students, there is potential for a fast-paced

internationalization of Danish startups in the early stages of development. The emergence rate of born globals and internationalized startups shows a strong international outlook among the Danish startups; with the added impressive commitment shown by international students in Denmark, there is real potential to increase the rate, pace and success of internationalization among Danish startups.

A figure that could partly explain the Venture Cup alumni’s high degree of international activity is the percentage of students with international backgrounds who participate in the competitions. Based on the survey responses the participation by international students has increased significantly in recent years from 14% in 2009/2010 to 40% in 2013/2014.

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ENTREPRENEURSHIP IN UNIVERSITY COURSESThe entrepreneurial eco system provides a supporting foundation, which most likely increases the possibility of success for the starting entrepreneurs. In the following visual, it has been examined how many of the Venture Cup participants have attended entrepreneurship courses. The numbers from the report “Entreprenørskab fra ABC til ph.d.” (p 66) compiled by Fonden for Entreprenørskab – Young Enterprise has been included for sake of national comparison. It is important to stress that the report issued by FFE-YE includes data from maritime educational institutions, business academies, universities, and cultural educational institutions.

The graph above shows that Venture Cup is successful in targeting students that possess a strong drive for entrepreneurship, functioning as a platform for them to develop their business acumen. However, initiatives are also taken by Venture Cup to appeal to students who traditionally do not see themselves as entrepreneurs. The latest initiative is the integration of social entrepreneurship into two branches of the organization. Entrepreneurship has been integrated into Venture Cup’s own competitions as a category. Secondly, Venture Cup in 2014, formed a collaboration with the National Centre for Social Enterprises hosting the Social Entrepreneurship Awards 2015.

This initiative is not only targeting entrepreneurs, who want to make social businesses, but is also encouraging students enrolled in socially oriented non-entrepreneurial education to become entrepreneurs.

It is clear that there is a correlation between students’ exposure to courses

in entrepreneurship at the universities and their activity in the competitions. The fact that the vast majority of alumni have undertaken entrepreneurship courses is evidence that further integration of entrepreneurship into university courses holds great potential for the development of entrepreneurs.

In a major study conducted by FFE-YE, the impact of entrepreneurship education at university level is shown to have a great impact on the student’s likelihood of starting their own businesses and of working with innovation within larger organizations. Interestingly the report also concludes that giving the students a sense of ownership and personal relation to the teaching has a significant impact on their entrepreneurial behavior1.

These findings further emphasizes the need for increased focus on entrepreneurship and relevant student involvement in university courses.

Moberg, Kåre. FFE. ”Effektmåling af entreprenørskabsundervisning I Danmark”

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FINDINGS AND CONCLUSIONS Venture Cup alumni continue to be highly involved in entrepreneurship. Almost half are currently owners or co-owners of a company. Of these, 31% remain committed to the business that they developed during participation in the Venture Cup. The alumni also continue to be the source of new innovative companies as upwards of 30% of alumni from 2009/2010 have started new companies. Of those who describe themselves as company founders, 69% have registered their companies with the Danish CVR register, meaning that 34% of all alumni go on to CVR register a company.

Not only do alumni continue to work as entrepreneurs and start new businesses, they also create jobs and companies with sizable revenues. The 10% of Venture Cup alumni who participated in the survey reported, that they expect a revenue from their respective companies of DKK 273 mio in the 2015 financial year. If this may be taken as representative of the full alumni group, we must expect the alumni companies to have a total revenue exceeding DKK 2.7 bn in 2015. In comparison with previous Venture Cup surveys, the revenue per company has increased significantly: In 2007 the average company revenue was DKK 528,977, a figure that increased to DKK 1,742,362 in 2015. In addition, the surveyed alumni also have extremely positive expectations for the year to come, with average growth expectations at 2.21 times the current level.

Based on the survey responses it is estimated that the Venture Cup alumni teams have created more than 4,000 full-time and part-time jobs within the last five years. Moreover, this number is set to expand rapidly, as 65% of respondents say they expect to hire additional staff in the year to come.

Looking at the educational backgrounds of the alumni, almost 50% have studied at masters level at the time of participation in the competition. The survey also shows that a very high percentage of alumni have taken courses in entrepreneurship at university level. While this number has been stable at 80-90%, recent numbers indicate that Venture Cup is engaging students who do not receive entrepreneurship teaching and who do not traditionally engage in entrepreneurship. A reason for this development could be the introduction of a social entrepreneurship category in the competitions.

Funding continues to be an issue for startups, but this survey shows that public funding is starting to play an important role for our alumni. 15.2% have received public funding, which is a significant increase compared to previous surveys. Crowd funding is gaining much attention, but, in reality, it constituted only 1.1% of the combined startup funding.

The results from the survey show that the entrepreneurs are highly international in their outlook. Around one-quarter are doing business internationally and 10% have offices abroad. As detailed above, this international presence is likely linked to the international background of the Venture Cup participants and alumni. The survey shows a strong growth in students with international backgrounds participating in the competitions. In the most recent competition, 44.75% of the participants were international students at Danish universities.

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FULL METHODOLOGYDEFINING OUR ALUMNI

The basic premise for this year’s survey has been to reevaluate what we understand by the term ‘alumni’. Previous alumni surveys have concentrated solely on companies that have participated in the final stages of Venture Cup competitions and have subsequently continued to pursue the realization of their Venture Cup business plans. However, it is our belief that this definition does not fully embody the effect Venture Cup has on its participants.

In order to depict fully the achievements of our previous participants the definition of an alumni team has been broadened so that it includes not only previous finalists, but also non-finalists and new businesses founded by previous participants. In this regard, it is important to emphasize that Venture Cup does not take full credit for the establishment and success of these companies.

COLLECTING THE DATA

In this survey, information on our previous participants has been gathered through both primary and secondary data sources. The method for the gathering of primary data consisted of a questionnaire, which was distributed to 5,620 previous participants. The secondary sources of data consisted of Venture Cup’s own competition data, which is registered by the participants prior to the competitions getting underway. It is through this secondary source of data that emails and contact information on all previous participants have been obtained and used in the distribution of the questionnaire. Furthermore, data and results from previous alumni surveys have been utilized in the making of this report.

SURVEY SETUP

The setup of the survey was based on various types of questions Firstly, demographic information such as age, gender, nationality and university affiliation was gathered. The respondents were then asked to provide more competition-specific information, such as year of participation, category submission and competition success. Finally, the participants were sorted based on their current employment status, with the aim of determining which of our participants are self-employed and which milestones they have achieved as business owners.

When team-specific proportions and numbers were calculated, double entries by participants from the same team were accounted for, which resulted in two different data sets: one for individual participants and one specifically for uniquely identified teams.

The Venture Cup staff tried to improve the response rate by sending out several reminders via email and making numerous individual phone calls to previous participants to encourage their involvement in the survey.

The survey was created and distributed via the paid online survey tool, SurveyXact.

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PITFALLS

The initial purpose of the alumni survey was to obtain a general picture of previous Venture Cup participants’ entrepreneurial learning, development and results. This included investigating aspects such as the participants’ engagement with the entrepreneurial eco-system, their current employment status, and their commercial success. However, it was quickly discovered that pitfalls in relation the reliability, validity and availability of data would arise.

Firstly, the unique identities of the individual participants and their associated contact information proved, in many cases, to be invalid when the online questionnaire was distributed to 5,620 registered participants. Approximately 22% (1,259) of the online distributed questionnaires bounced due to invalid or expired email addresses, which meant that a significant proportion of our previous participants were not offered the opportunity to partake in this survey. It was noted that a significant portion of these expired or invalid emails were student emails or emails held by our earliest participants. Consequently, data gathered from our earliest participants ended up being disproportionate to the data gathered on Venture Cup’s most recent participants.

Secondly, the questionnaire response was rather low. Only 6.56% of all previous participants completed the survey. In addition, 1.6% of participants partially completed the survey. The data on partially completed entries was used when accessible. Due to the low response rate, especially from pre-2009 participants, data gathered from respondents participating between 2000 and 2008 has, in many cases, been excluded to avoid making dubious generalizations about proportion measures for these years.

Thirdly, it is unfeasible to gauge the accuracy of these estimations and the information provided by the participants, but sampling error and bias is to be expected, making statistical inferences less reliable. Moreover, the fact that the sample is non-random and non- probabilistic creates further problems when making inferences about the entire population of participants.

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15 YEARS OF ENTREPRENEURSHIP

For the past 15 years Venture Cup has been working to help student entrepreneurs and has seen a great development in both numbers and quality of participants. One of the most important tasks for Venture Cup has been to foster an entrepreneurial mindset among students. Venture Cup has incorporated the surrounding business world, the knowledge of established entrepreneurs and alumni, using the huge knowledge within the community to our advantage. A recent report from Teknologisk Institut concluded that “Getting real entrepreneurs involved as part of the learning environment can make up for the current lack of practical experience among higher education teachers” 1, and this is something Venture Cup has always strived to do.

Venture Cup Denmark is a non-profit organization started by management consultant McKinsey & Company in 2000. The purpose of the organization is to find the entrepreneurs of tomorrow and to facilitate the creation of new businesses. This is pursued through a targeted effort, which centers on the following core activities: competitions, skills training, mentoring and networking. The mission of Venture Cup Denmark is to inspire and empower university students and researchers to develop their ideas into successful companies. In this way academic knowledge is transformed into viable high-growth businesses.

Venture Cup Denmark has eight members: the eight Danish universities. This makes Venture Cup Denmark the only organization of its kind in the country. On this backdrop, Venture Cup has, hosted 15 years of successful entrepreneurship competitions.

In 2000-2011 each competition was held in the five regions in Denmark. This meant that Venture Cup hosted ten competitions each year. In 2011 the format of the competitions were changed. The five idea competitions and the five startup competitions were turned into one national idea competition, hosted each January and one startup competition, hosted each June. In this transformation of competition formats five categories were created, in which university students could submit their entries. The categories were Mobile & Web, Services, Product & Technology, Life Science & MedTech and Cleantech & Environment. In 2014, a new category was added due to a massive influx of social innovation; The Social Entrepreneurship category.

In close collaboration with these universities and especially their entrepreneurship departments and student incubators Venture Cup works to ensure the development of promising student entrepreneurs.

ABOUT VENTURE CUP

1 ”Danmark - Løsningernes Land” Pg. 5, 2013 Teknologisk Institut

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FROM COMPETITIONS TO DEVELOPMENT

A key goal for Venture Cup is to support the promising entrepreneurs who participate in the organization’s competitions.

In 2013 Venture Cup Denmark launched the Booster Pack programme, a one year accelerator programme, where the 25 best teams in the startup competition are offered free products and services for a value of more than DKK 250,000 per package. The products and services are provided by 20 sponsoring companies. In the two years that the Booster Pack has been up and running, 50 teams have been through the programme. Of these companies, more than 65% have established CVR numbers while in the. Booster Pack. Venture Cup continues to optimize the programme and strives to provide a perfect package of services and products for the entrepreneurs.

In 2014 Venture Cup Denmark launched the National Startup Mentor Programme. The mentor programme connects university students with experienced entrepreneurs and executives. The experts have a diverse range of backgrounds, from experienced entrepreneurs to industry experts and corporate leaders. Through this network, Venture Cup is able to offer uniquely matched mentors to its startup teams. So far, this has resulted in 108 teams being matched with mentors and participating in a full-year programme. The response has been great from mentees and mentors alike, which indicates the vast potential for matching talent and experience through programmes like

this. In 2015 the National Startup Mentor Programme was accompanied by the Tutor Programme. Through peer-to-peer mentoring, Venture Cup is enforcing knowledge sharing between entrepreneurs who are just starting out and those already in business.

Finally, 2015 will be the year in which Venture Cup will plan and host the first University Startup World Cup. The most talented university startup teams from all over the world will come to Copenhagen for one week, getting acquainted with the Danish startup scene and meeting successful Danish companies, relevant to the different teams. The week will culminate in the most talented startup within each category will being chosen.

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Throughout the 15 years that Venture Cup has been in operation more than 8,500 students have participated in the main competitions. While the organization has grown to offer a wide variety of services to support and develop budding student entrepreneurs, the number of annual participants in the competition has also grown steadily and has settled at around 1,500 in recent years, as shown below.

WHO ARE THE COMPETITION PARTICIPANTS?

Venture Cup aims to engage students at all stages of their university studies and our data reveals that our participants are indeed very diverse. The graph below shows the distribution of bachelor- masters- and Ph.D.-students among the participants in the competitions. It is clear that, while bachelor students are the most plentiful at the Danish universities, the master’s students account for almost half of the participants in our competitions. This could be an indication that the master’s students have gained skills, network and academic knowledge that enables them to engage more fully with entrepreneurship.

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It has long been established that males are vastly overrepresented when it comes to entrepreneurship; in spite of efforts to counter this phenomenon, Venture Cup’s competitions are no exception. The gender distribution among the competition participants over the past six years averages 75% male participants and 25% female participants. The proportion of female participants has been decreasing slightly, as is shown in the chart below, but the introduction of the Social Entrepreneurship category, as well as special events for female entrepreneurs, is intended to ensure that the percentage of female participants increases.

The chart reveals that there are large differences between participation levels among the universities. The business-oriented students from CBS and the technically- minded students from DTU have traditionally dominated the competitions in terms of both numbers of participants and winners. Recent years have, however, shown increasing attendance and quality from SDU, AU, AAU, KU and RUC. These universities’ increased focus on entrepreneurship is a great factor in this development. The IT University has only recently become a member of Venture Cup, but the students have shown great interest and recent studies indicate that ITU students have a very high frequency of business establishment.

Venture Cup is a nationwide organization that has employees at each of the eight Danish universities. These employees work hard to enable students at their respective universities to live out their entrepreneurial dreams. This is achieved through collaboration with partnership classes, workshops and events. In the chart below we have an overview of the distribution of competition participants across the Danish universities.

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FOUNDED: EARLY 2013 EMPLOYS: 4 PARTNERS, 6 FREELANCE DEVELOPERSOPERATING IN: DENMARK

In 2013 the Lendino company won in the People and Society category in the Venture Cup Startup Competition. The company was founded in 2013, and had, therefore, only existed for six months at the time of participation.

Lendino was founded with the vision of making loans for small and medium sized companies easier, cheaper and faster to obtain - and, at the same time, create a great opportunity to invest in new companies.

Lendino is an online marketplace for loans where private and professional investors can lend money directly to creditworthy companies of their choice. In this way, any expensive intermediary is cut out, giving the investors a higher return and resulting in lower costs for the startups borrowing the money.

Lendino and the entrepreneurial eco- system in Denmark

Lendino was a part of the incubator Copenhagen School of Entrepreneurship for one year. While situated at the incubator, the Lendino team also took part in the GoGrow program, offered by CSE.

One of the founders and partners of Lendino, Asger Trier Bing, strongly believes that being a part of an incubator and an entrepreneurial environment has influenced Lendino’s success in a positive way: “The professionalism offered by an incubator helps a lot, especially the dedication with which

new ideas are met. The people that work at the incubator are serious about making your idea happen and helping you find suitable solutions to any problems preventing that from happening”.

Being a part of such a strong eco-system creates a strong and highly useful network. In fact, some of the members of Lendino’s current advisory board come from contacts at CSE and directly via the Go Grow programme.

Being a part of Venture Cup

“The honor of winning…” That was Asger Trier Bing’s answer when asked what the most valuable part of participating in Venture Cup Startup Competition, 2013 was. He finds great value in being able to tell early on that a professional and impartial jury has validated your company by choosing you as the winner of a category in the biggest university startup competition in Denmark.

Winning a category so early on in Lendino’s lifespan also functioned as a good motivator to continue to work on the company, so motivation and honor were the two most important aspects of participating in Venture Cup for Lendino.

CASE STUDY FOCUSED ON THE ENTREPRENEURIAL ECOSYSTEM:

LENDINO

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FOUNDED: 2013EMPLOYEES: 14INTERNATIONAL EMPLOYEES: 7OPERATING IN: 3 COUNTRIES WITH EMPLOYEES, 115 COUNTRIES ARE USING GENIEBELT

GenieBelt participated in both the Venture Cup Idea Competition and the Venture Cup Startup Competition in 2013 (as Quick Inspect) and won in the Mobile & Web category in both competitions. GenieBelt felt these wins worked as great motivators for their start-up.

“Doing a startup is hard. Any small win will give you confidence in being able to take something all the way.” Gari Nickson, CEO, GenieBelt.

As GenieBelt describes it, they want to bring modern technologies to construction in a simple, affordable, ‘no training required’ and ‘no nonsense’ way. GenieBelt is a collaboration platform that connects the construction site to staff working in the office. It ensures efficient project workflows and, of course, enhances collaboration.

The idea for GenieBelt was born of the frustration that the founders themselves experienced on the worksites. Among other issues, bad communication was a typical challenge, and they felt that the industry needed an updated way of resolving different daily issues.

International founders

When GenieBelt won in 2013, none of the three participants on the team, Kacper Kawecki, Gari Nickson or Francisco Fernández, was originally from Denmark. International teams are very common in Venture Cup competitions, and the GenieBelt team never really experienced any struggles not being

Danish. However, some practical issues did arise. According to Gari Nickson, there were two central challenges, which both revolved around the language barrier. The first challenge was the legal aspect, where contracts and other regulations,can, clearly, be difficult to deal with in a foregin language. The second, and even greater challenge related to language is when GenieBelt deals with customers:

“Talking to customers. Yes, Danes speak good English but not everyone in the Stone Age construction industry.”

In the Danish startup community, however, the language barrier did not pose a problem for GenieBelt as most, if not everything, is in English. Creating an entrepreneurial network is therefore just as easy for international entrepreneurs as for Danish ones, and GenieBelt still networks with jury members from Venture Cup, and of course other entrepreneurs in the startup community.

CASE STUDY FOCUSED ON INTERNATIONAL STUDENTS:

GENIEBELT

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FOUNDED: 2011 (THE BUSINESS IDEA WAS DEVELOPED IN 2009) EMPLOYEES: 35OPERATING IN: DENMARK, SWEDEN, NORWAY UK, BELGIUM, HOLLAND

The founders of Graduateland tell a classic entrepreneurial story of how their company came to exist. Initially, they worked in the corner of an old warehouse filled with ladies’ clothes, brainstorming and coding. They had professors telling them that this business idea was the worst idea ever, and there are many more stories like this. However, now, Graduateland is a successful business with 35 employees.

In 2011 Graduateland was the winner of the People’s Choice Award at the Venture Cup Idea Competition. The company has developed an online career platform that matches students and graduates with employers. They have forged a close partnership with several universities in order to facilitate ideal matching of employers and students and graduates.

International Growth

Today, Graduateland operates in six different markets, is continually expanding to new countries, and has users from every country on earth.

To Graduateland, one of the biggest reasons for expanding was benefits of doing so relative to the resources that it would be necessary to commit to such an expansion. Expansion to new markets was the natural next step in Graduateland’s

growth strategy as Denmark steadily became more successful and they could see how well it worked in this country. The first countries they targeted for expansion were Sweden and Norway, since the market conditions and many cultural aspects were fairly similar to those found in the Danish market. However, even with these advantages, Graduateland employed staff from the respective countries who were familiar with the local markets and culture, the better to smooth the process. CEO and co-founder Jens Reimer Olesen explains:

“Having international employees certainly made an expansion easier. For example, in Sweden, they, to our surprise, focused a lot more on contracts and formalities than Danes do, so having Swedes help in setting up the office in Stockholm was very helpful.”

The international employees that help set up new offices in foreign markets have all worked at the main office in Copenhagen and know the company and their values inside out. Graduateland has discovered one of the biggest challenges in expanding to new markets is the bureaucracy related to establishing a company, such as tax rules or opening bank accounts. However, with a team that both understands the company and the new market, the process is eased significantly.

CASE STUDY FOCUSED ON INTERNATIONALIZATION:

GRADUATELAND

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FOUNDED IN: 2010EMPLOYEES: 8OPERATING IN: DENMARK RECEIVED FUNDING IN DKK: 24 MIORECEIVED FUNDING FROM: SEED, CAPITA, VÆKSTFONDEN, ECO INNOVATION (EU), EUROSTARS (EU - DANISH GOVERNMENT), HØJTEKNOLOGIFONDEN, MARKEDSMODNINGSFONDEN, REALDANIA.EU-OPSTART, PRIVATE INVESTORS INCLUDING MANAGEMENT AND FOUNDERS. In 2010 Abeo A/S won in the Product & Technology category (as Super Light Structures) in the Venture Cup Idea Competition.

The business of Abeo A/S is built on a new method of constructing concrete buildings with what Abeo A/S calls a “super-light structure” technique. Their lightweight concrete is significantly lighter than ordinary concrete, and consequently reduces the total weight of the concrete structure by approximately 50%. The lighter structure means lower materials cost and reduces CO2-emissions during production, transport and the actual building process.

Funding According to Abeo A/S:

Abeo A/S is one of the Venture Cup alumni teams who have received a great amount of funding from both private and public investors. Since 2010, they have received approximately DKK 24 mio. Abeo has also received a lot of attention and praise from the industry, as well as the media. National newspapers, Børsen, JP and Ingeniøren have written

about the company, and the company has also been mentioned in The New York Times. For Abeo A/S, receiving funding has been an absolutely vital part of their success, as Peter Hertz, CFO, explains:

“We would not exist without [thefunding] as our business is based on heavy R&D, as well as costly patents – thus, a significant amount of funding is needed for our business case to succeed.”

According to Peter Hertz, the biggest challenge in securing funding in Denmark is that there are not enough commercial funding options and, consequently, not much competition between funding sources. Government-sponsored funding opportunities are, according to Abeo A/S, quite effective, but there is a lack of a bigger private investment scene in Denmark. Private investors often have great experience of starting, growing and operating a business, which could be of great value to a young startup.

Funding can definitely be an important factor in a startup’s success, as is also evident from Abeo A/S’ case. The development of a solid investment environment will hopefully continue in Denmark over the next few years, benefiting more startups and investors.

CASE STUDY FOCUSED ON FUNDING:

ABEO

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FOUNDED IN: 2012 AS AN APSEMPLOYEES: 2 FOUNDERS, ADDITIONAL EMPLOYEES FROM THE SUMMER OF 2015OPERATING IN: HQ IN DENMARK, WITH MANY INTERNATIONAL PARTNERS AND CLIENTSRECEIVED FUNDING IN DKK: THE FLABBERGAST CONSORTIUM HAS RECEIVED DKK 30 MI0, ADDITIONALLY CUMULUS BIO HAS RECEIVED DKK 100,000 FROM DANISH INDUSTRIES FOR EARLY JET-FUEL TESTINGRECEIVED FUNDING FROM: INNOVATION FUND DENMARK, DANISH INDUSTRIES, CONSORTIUM PARTNERS (CO-FUNDING FOR FLABBERGAST)

The two founders of Cumulus Bio have participated in Venture Cup competitions three times with different versions and states of development of the company now called Cumulus Bio. The last time they participated in a Venture Cup competition was in 2014, as Tomo Liquid, developing compatible, sustainable and expandable biojet fuels for reliable air travel. Now, Cumulus Bio has developed further into a private contractor conducting research and development into mobilization, conversion and processing of biomass resources.

Cumulus Bio is a central partner in the FLABBERGAST consortium. The consortium, which consists of multiple national and international partners from academia and the industry, raised DKK 30 mio in December 2014, and is currently preparing to further test and develop the biojet fuels invented by Cumulus Bio.

Funding

Even though the consortium in which Cumulus Bio is a partner received DKK 30 mio in 2014, development of high-tech companies is expensive and, according to Cumulus Bio, the biggest challenge is that there is very limited funding available for high-tech startups in Denmark. One of the founders, Anne Sophie Vinther Hansen, explains:

“EU competition laws prohibit full governmental funding for small high- tech businesses, contrary to the funding schemes of Silicon Valley, Boston- Cambridge, etc. Biotech, chemical engineering, pharmacy and hardware are all industries with enormous R&D expenditures and with extremely long developmental time. This makes fundraising for high-tech very hard in a European and Danish setting.“

For Cumulus Bio and other high-tech companies, funding is such an important part of the R&D development. An injection of funding in 2014 has made it possible for Cumulus Bio to carry the technology from an early proof of principle to a more solid proof of concept.

Being a part of the Danish entrepreneurial eco-system has also been important and beneficial for Cumulus Bio, both in terms of recognition and motivation. Anne Sophie Vinther Hansen says:

“Being in the VC finals (IC2010, SC2010 and IC2014) had a tremendous ‘seal of approval’ effect, and helped us gain a lot of positive attention. This helped us in connecting with several entities, and even some of our current research collaborators.”

CASE STUDY FOCUSED ON FUNDING:

CUMULUS BIO

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