Magnus Heinstedt was the CEO of corporate finance, media, and e-commerce companies, where he participated in various financing arrangements and IPOs. He has vast experience in board work as a board chairman and member in listed and unlisted companies. Now, he works with companies that want to grow, focusing more on teams than business ideas. In our interview, find out what the Swedish startup scene is like and which advice for founders Magnus shared with us.

1. Hi Magnus. Thank you very much for agreeing to do the interview. Please tell us about your background and connection to the startup world.

I’m an entrepreneur myself. I started quite a few companies, and I managed to take one of them to the stock exchange many years ago. I’ve been in the startup world as an entrepreneur and an advisor. People have been asking me about starting, funding, and growing a company throughout my career.

2. How has the Swedish startup scene evolved over the past decade?

I’ve been in the Swedish startup scene since the ‘90s, and it has grown immensely. The development is fast evolving. Numerous companies are coming into the market, and investors started coming in and bringing in a lot of money.

The ecosystems have developed around the university cities. We have 8-10 major university cities in Sweden, and many startups are around them.

3. What needs to be improved in the Swedish startup scene?

If you look at the development of the market, there is a bottleneck, and it’s regarding the investors. An investor can, generally speaking, have 5-7 startups at the time, and there are not enough investors to handle all the startups that need funding. However, that’s a short-term problem; I believe it will be solved since we have many new business angels coming into the market.

4. What’s necessary to increase the number of active, experienced angel investors?

Firstly, I think sharing experiences between angel investors is much needed. They should discuss handling companies and teams. Secondly, we need different taxation laws so that more investors can help more startups secure funding. 

5. Which industries are currently trendy in the Swedish startup scene?

MedTech has been evolving for quite a while now, and there is a big new hype regarding artificial intelligence.

6. What are you currently focused on?

I have invested in many companies, and I’m currently focused on people I believe in, in teams rather than business ideas. I have a consultancy firm. People contact me because they need funding, and then our cooperation evolves to other areas, such as how to grow a company, legal issues, recruiting members to the board, and so on. 

7. Which advice for founders would you share with our readers?

There was research in the US about why startups fail, which also goes for Sweden. The main reason is that they don’t have a product-market fit. In Sweden, people like to invent; we’re an inventing market. But we’re not that good when it comes to applying these products or services to the market. People tend to think they have a perfect solution, but more often than not, they haven’t investigated whether anyone is willing to pay for that solution. The second reason why startups fail is due to a lack of marketing and sales in the early stages.

From an investor’s point of view, there’s also an issue with building the team that will take the company to the next level. The team should be the primary focus of each company because investors invest in people. So, my advice to founders is to ensure they have product-market fit and think about how to build a team in the early stages.

8. Is Nordic a single market for startup investing?

No, the Nordic countries are different markets and entirely independent. Compared to the other Nordic markets, the Swedish market is much larger and more developed. We have been developing the startup market for quite a while now, but in the long run, it will be leveled out with other Nordic countries.

Thank you very much for sharing your story and insights, Magnus. We wish you the best of luck in your future endeavors.

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