How to finance your startup in Oslo?
There are a number of ways to finance your startup in Oslo. Choosing the best option, or a combination of several, will make it easier for you to help you meet your goals and obligations in the beginning. We have listed some of the options available to get you started.
Image: Katapult Ocean Accelerator
The most common ways of financing your startup is own funds or a loan, investors (friends and family, or professional), crowdfunding and public grants.
Note that this article will prioritize opportunities that are available for scalable technology and innovation businesses, however it might be just as useful for other startups, too.
First, let's get a brief overview of some of your options:
- Own funds (bootstrapping)
- Bank loan
- Incubator and accelerator programs
- Venture capital
- Trade equity or services
- Friends and family
- Angel investors
- Public funding
- Keep your dayjob
Own funds (bootstrapping)
It goes without saying, but this is probably the most popular way of getting started - investing your own funds and resources in your new business.
Many banks offer loans to people who are starting or have started a new business. The bank is interested in how and when you will pay back the loan, and you should be prepared to discuss your budgeting plan (cashflow). Banks might also be interested in if you can offer some kind of security (assets), just in case you should have trouble paying back the loan. The best way to start is to contact your local bank for options and you can also check out Innovation Norway's Startup loan (in Norwegian).
Incubator and accelerator programs
There are several government grants and loans to support new companies in Oslo, especially companies with a business model that solves challenges within health, environment, education and social needs. In other words, solving one or more of the Sustainable development goals.
This option is generally suitable for startups that has a proven minimum viable product (MVP), a product or service that has been tested in a market, and a business model in place. And customers never hurt, either.
Here are some of the options available:
- Oslo kommune (City of Oslo): Tilskudd, legater og stipend (in Norwegian)
- Innovation Norway provides grants and loans for startups and growth companies
- Innovation Norway: Presåkornfond (in Norwegian)
- EEA and Norway Grants: The current 2014-2021 period, the funding amounts to €2.8 billion and covers areas ranging from climate change and energy to innovation and sustainable business development.
- Scholarships and grants at Legathåndboken
- SkatteFUNN - all Norwegian companies who has or is planning to start an R&D project, can apply for an approval from SkatteFunn for tax reductions.
- SIVA - is a governmental enterprise facilitating a national infrastructure for innovation consisting of incubators, business gardens, catapult centres, innovation enterprises, innovation centres and industrial real estate.
- The Research Council of Norway: Schemes for financial support
- You can apply to NAV for unemployment benefits whilst starting up your own business.
- Read about Covid-related financial support for businesses in Oslo here.
- Enova works reduced greenhouse gas emissions, development of energy and climate technology and a strengthened security of supply.
- The Research Council of Norway: Innovation projects for the industrial sector
- The Research Council of Norway: MAROFF - Innovation Programme for Maritime Activities and Offshore Operations
- GIEK can provide a guarantee to a bank that finances a company’s investment in Norway. The investment must directly or indirectly lead to export.
- Design and Architecture (DOGA): Design Driven Innovation Programme
- Altinn offers an overview of more financial opportunities for startups
- Horizon2020 - Norwegian companies, public administration and academic institutions can apply to Horizon 2020 for funding for research, innovation and commercialisation activities.
- Horizon Europe (in Norwegian)
In a crowdfunding (folkefinansiering) campaign, people will pre-buy your product for later delivery, give a donation, or are given a reward, such as a token or a t-shirt, that symbolises their support. There is also the possibility of crowdlending, where someone lends you money for a return from the project or equity-based, where the person or company will get shares in your company.
There are several crowdfunding platforms operating, both Norwegian and international, such as Kickstarter, Monner, Spleis, GoFundMe, Indiegogo, Folkeinvest, Startskudd by DNB and more.
If you are interested in learning more about Crowdfunding, Business News Daily has written an article about What is Crowdfunding.
Venture capital (risikokapital)
Venture capitalists are professional investors (companies, not individuals), who invest money (and not least experience) in qualified teams and startups, often with a proven business model that is ready to scale. What does scale mean? A venture capitalist will inject money into a startup and expects a high return on investment (ROI) within a few years - some say a x3 return, others a 20% ROI per year. A scalable idea, service or product means that you (and the VC) predict (and validate as much as possible) a ROI in the million and billion $ segment.
VCs have several startups in their portfolio, and they expect many of these to fail. That's why it's important that one of them will succeed. Venture capital is in other words suitable for big opportunities and risks. Cold calling VCs is not recommended, ask your network for a warm introduction. Come really well prepared to the first meeting - ask other founders for advice before and have your numbers right. Finding the VC firm that matches your startup will take time and efforts.
VC capital is often connected to technology because of the scalability. If you are considering to open up a single shop, small consultancy or tattoo studio, VC capital is maybe not a match.
You will find a handful of Norwegian VCs in Oslo and even more in the Nordics. Most innovation and tech startups with international ambitions will have a combination of Norwegian and international investors.
- Read more about venture capital and rounds on this page.
- You can find a list of Oslo based investors and VCs on this page.
Trade equity or services
Another way to fund your startup in the early days is to give away shares of your business to get either the money or services you need to get started.
Friends and family
The source for some early-phase startups is getting their friends and family who believes in you(r business idea) to fund. This could be as a loan, a gift or for shares in your company.
For both this option, Friends & family, and Trading equity or services, we recommend formalising such agreements to avoid disagreements. Does your friend or the other company expect shares or other kind compensation now or in the future? When? Will the capital invested also scale proportionally if your company is evaluated to a larger sum of money or will it be based on profit? What happens if you don't make it? To get professional help, you might want to contact a lawfirm who specialises in tech startups and innovation before you accept any capital.
Angel investment is capital coming from individuals. Most cities have groups of individuals interested in supporting and investing in startups, and are willing to lend you the money on the terms that they expect a smaller ROI (than a VC). An angel investor will typically never invest more than $1 million but there is no set rule for this.
An angel investor is not only the capital they bring to the table, but also important experience and network. An angel investor often has a connection to your company already or the industry you operate in, however how hands-on they will be in your startup varies.
In Oslo you can check out the Angel Challenge program and Norban. If you are interested in reading more about angel investment, you can also check out this article on Shifter (in Norwegian).
Keep your dayjob
Some times circumstances are just not ideal for a lot of risk. Maybe the best option right now is to keep your job until you have the business up on its feet and have signed some clients or customers, or maybe working part-time is a possibility.
Regardless of what option(s) you choose, Oslo has got you covered!
Note that Oslo Business Region takes no responsibility in featuring the different companies or opportunities on our website.