BioInnovation Institute funds start-ups in the Creation House program with a convertible loan of up to DKK 10M equivalent to EUR 1,3M. As a Novo Nordisk Foundation initiative, BII is on a mission to bring research out of the lab and into the market for the benefit of society and human welfare around the globe. Our purpose allows us to offer very founder-friendly convertible loans that leave the founders risk-free without having to give up large shares of their start-up.
Check out the answers below for the most frequently asked questions about this unique funding opportunity at BioInnovation Institute.
What is a convertible loan?
A convertible loan is a risk-free funding opportunity for early-stage start-ups. It leaves the start-up free from repayment in case the company fails.
Why is BII’s loan founder-friendly?
BII is a Novo Nordisk Foundation initiative on a mission to impact society by bringing new solutions to the market. Because of that, BII provides a very competitive convertible loan compared to traditional investment groups.
How much equity does BII take?
BII only takes equity, if the company receives a sizeable investment. In this case, BII can choose to convert one-third of the loan into founder’s class shares. Two-thirds of the loan is converted into an exit bonus for BII.
What is the size of the exit bonus?
The exit bonus for BII is calculated by two-thirds of the loan amount including interest multiplied by a factor of 1-3 dependent on the later investments into the company.
Why does BII take equity?
BII has created this model for convertible loans to be able to continuously support early-stage start-ups, that can impact society by bringing new solutions to the market.
When must the company repay the loan?
If the company has not received an investment within 3 years, the loan must be repaid over five years at 5 percent in interest rate. In some cases, BII may extend the maturity of the loan or BII can choose to convert one-third of the loan.
What happens if the company fails?
If the company fails, the loan is converted into a donation, which leaves the founders liability-free.
If you are interested in this funding opportunity for your life science start-up, check out the three top reasons why you should apply for the Creation House program.
More questions? Check out our FAQ.