Abstract:
The Swedish life science sector is a pivotal contributor to the nation's innovation and economic
development, offering vast potential for growth and value creation within the global healthcare
landscape. However, navigating the investment terrain to actualise this potential requires strategic
capital infusion, primarily through venture capital (VC) and business angel (BA) investments. This
study aims to explore the key decision-making criteria and challenges of BAs and VCs when
evaluating life science ventures for investment in Sweden. It addresses the gap in understanding the
investor's standpoint, detailing the key factors influencing their investment choices and the
challenges they face within the Swedish innovation ecosystem.
This study uses a qualitative research methodology to gather insights from nine semi-structured
interviews with a select group of BAs and VCs actively engaged in Sweden's life science sector. The
objective is to unravel the complex decision-making landscape, identifying the criteria that drive
investment decisions and the barriers that potentially hinder the practical application of these
criteria.
In this study, several key decision-making criteria used by BAs and VCs are uncovered, encompassing
aspects such as risk appetite, science and technology evaluation, financial viability, milestone
achievement, adaptability, trust building, networking, guidance and mentorship, and vision
alignment. Additionally, it highlights several challenges confronting investors, including regulatory
complexities, geographical difficulties, ecosystem influences, and Swedish-specific life science
hurdles. These barriers affect the investment process and shape BAs and VCs' strategies and
preferences in their pursuit of successful venture engagements.
By providing a nuanced understanding of the investment dynamics from the perspective of BAs and
VCs, this research contributes valuable insights into the operational frameworks of capital provision
in Sweden's life science sector. The findings offer practical implications for existing and prospective
investors, enhancing their strategic approaches to investment in life science ventures. The study also
lays a foundation for future research to refine further and expand the knowledge base on investment
decision-making in the life science sector, ultimately fostering a more vibrant and sustainable
innovation ecosystem in Sweden and beyond.