NORWAY Law and Practice Contributed by: Ylva B Gjesdahl Petersen, Marius Holm Rynning and Johan Fredrik Brende, Thommessen
1.3 Key Industries According to the Norwegian Venture Capital Association, the transportation sector, ICT (Infor - mation and Communication Technology) and cleantech were the dominant industries in terms of amounts invested in the venture and seed phase in 2023. The writers have observed that these sectors have continued to dominate the Norwegian venture capital landscape in 2024, but that there has been a notable increase in interest in venture capital companies operating in the AI space, driven by emerging mega trends. Domestic venture funds are typically struc - tured as tax-opaque limited liability companies ( aksjeselskap ) or as tax-transparent partnerships ( indre selskap ). The investment manager acts as the alternative investment fund manager in compliance with the Norwegian Act on the Management of Alterna - tive Investment Funds (the “AIFM Act” ), imple - menting the EU’s Alternative Investment Fund Managers Directive (AIFMD). 2. Venture Capital Funds 2.1 Fund Structure When it comes to foreign structures, it has tra - ditionally been common to choose offshore jurisdictions such as Guernsey, Jersey, and the Cayman Islands. However, there has been an industry shift towards onshore EU/European Economic Area (EEA) jurisdictions such as Lux - embourg. 2.2 Fund Economics In Norway, tax-opaque limited liability and tax- transparent partnership structures – despite a few legal distinctions – largely conform with regard to governance and decision-making pro -
venture capital funds have become increasingly active in the Norwegian market during the past year. Norwegian venture capital funds continue to be active – although reporting a tougher cli - mate for fund raising and less “dry powder” for the years to come (NOK18 billion compared to NOK29 billion in 2018 according to the Norwe - gian Venture Capital Association). For many start-up and growth companies, 2024 has been a year of “make it or break it” , as ven- ture capital funds are increasingly focused on the high-quality companies and show significantly less interest in participating in down rounds for early-phase companies that are not showing the same traction. Private equity funds are still increasingly par - ticipating in growth equity, which is the space between venture capital and private equity, focusing on minority investments in scaling companies. This shift has led to more competi - tive negotiations for companies, as private equi - ty funds typically require a solid business plan and clear exit strategies, which may not always align with the interests of other shareholders. The entry of private equity funds into the market has intensified competition among investors for a limited number of established and upscaling companies. This trend is seen as positive for companies in need of financing during their criti - cal growth phases. According to the Norwegian Venture Capital Association Norwegian, private equity funds have also reported to have NOK105 billion in dry powder in late 2024, which is up from the NOK89 billion reported the year before. Please refer to 3.2 Process for the impact on deal terms.
408 CHAMBERS.COM
Powered by FlippingBook