Over the past 12 months, the Norwegian market has continued to be shaped by a combination of (i) more selective deployment of venture capital into early-stage opportunities and (ii) comparatively stronger focus and activity around exits and liquidity events.

The Norwegian Venture Capital Association (NVCA) indicates that the number of early-stage investments decreased further from an already low level in 2024, and characterises Norway to be behind Sweden but in line with Denmark and Finland. Measured by invested amounts, H1 2025 was the lowest total amount invested in Norway since H2 2020.

The elevated exit activity seen from 2024 continued into 2025 (including an increase in exits in early-stage companies over the last three half-years). While the general venture capital investment activity is lower than in previous years, leading start- and scale-up companies continue to raise capital on attractive terms.

Recent notable venture capital-related financings and exits include:

• Actithera raising USD75.5 million in a series A capital raise from, inter alia, founding investor M Ventures and new lead investors Hadean Ventures, Sofinnova Partners and 4BIO Capital;
• Maritime Robotics raising NOK280 million in a series B capital raise led by Mustard Seed + Partners;
• Spoor AS raising USD9.3 million in a series A capital raise led by SET Ventures;
• Omnium raising NOK100 million from Viking Growth;
• Two raising USD13 million in a series A2 capital raise led by Idékapital and Shine Capital;
• Pistachio raising USD7 million in a series A capital raise led by Walter Ventures;
• Sanity raising USD85 million in a series C capital raise led by Bullhound Capital;
• Lace Lithography raising EUR34.5 million in a series A capital raise led by Atomico;
• the sale of OptoScale to Insight Partners for an undisclosed amount;
• the sale of Tise to eBay for approximately NOK1.3 billion; and
• the sale of Consigli to Aecom for USD390 million.

The Norwegian market has, in practice, seen a continued focus on capital efficiency, milestone-based financing and investor scrutiny of runway, governance and downside protection. Early-stage deployment is constrained relative to prior years, including a continued reduction in the number of early-stage investments. This has, in turn, influenced how founders and investors approach round sizing, pricing and syndication.

There has been increasing private equity participation in growth equity (between venture capital and buyout private equity), intensifying competition for a limited number of more established scaling companies and influencing negotiation dynamics (including emphasis on business plans and exit strategies).

Further to this, there was stronger exit activity in 2025 than in earlier periods, including a significant increase in exits and relatively high exit counts continuing from 2024. That backdrop tends to support more negotiation around:

• drag/tag mechanics;
• liquidation preference stacking in later rounds; and
• processes to align investor classes for a trade sale rather than assuming an IPO route.

In Norway, venture activity has historically been strong in sectors that build on the country’s industrial base and high level of digital adoption. This includes technology-enabled services and software-driven business models, as well as companies positioned in energy transition-related value chains (for example, solutions supporting renewables, electrification, energy efficiency and decarbonisation of industrial and maritime activity).

Traditionally, technology investments, transportation, ICT and cleantech have been dominant sectors in the venture and seed phases, reflecting both Norway’s established clusters and an investor preference for scalable, export-oriented offerings. These sectors continued to dominate in 2025, while investor focus became more selective and thematic. In particular, there has been increased interest in AI (including applied/industrial AI and data-driven automation) and defence and dual-use technologies, driven in part by heightened geopolitical tensions and a stronger emphasis on resilience, security and critical infrastructure.

Norwegian venture funds are commonly organised using either:

• private limited liability companies (aksjeselskap); or
• tax-transparent partnerships (indre selskap).

Decision-making and governance are typically delegated to the investment manager within the constraints of mandatory law, and the fund’s operations are governed by a combination of constitutional/corporate documentation (eg, articles of association) and contractual arrangements (eg, shareholders’, investment and management agreements, or a limited partnership agreement, depending on structure).

The investment manager typically acts as the alternative investment fund manager (AIFM) under the Norwegian Act on the Management of Alternative Investment Funds (Norwegian AIFM Act).

Economic alignment between the investment team and investors is usually achieved through commitment by the investment team and through carried interest. The investment team commonly invests via a separate limited liability company and may commit 1–2% of total fund commitments. Fund equity is often structured using preference shares and ordinary shares, with preference shares having priority to repayment of paid-in capital plus a preferred return.

Norwegian venture funds frequently use a whole-of-fund waterfall model rather than a deal-by-deal model, meaning that carried interest is typically calculated and distributed only after investors have received distributions across the fund as a whole in accordance with the agreed return and capital repayment priorities. Funds also commonly include claw-back mechanisms, designed to ensure that the investment team repays any excess carried interest if later fund performance means that the agreed waterfall would otherwise result in an over-distribution to the manager or carry vehicle. In addition, terms addressing “for cause” removal and vesting concepts (including linear vesting) are often used to manage alignment and key person risk, by linking the investment team’s economic participation to continued service and by allowing investors, in defined circumstances, to remove the manager or reduce/forfeit unvested carry where conduct or other agreed “for cause” events occur.

Continuation vehicles are increasingly being used in Norway as a strategic response to today’s constrained exit environment, and have become more accepted in the market. They can provide liquidity for existing limited partners while enabling managers to retain and continue to develop assets and reduce pressure to pursue premature exits.

Domestic venture funds are generally treated as alternative investment funds (AIFs) under the Norwegian AIFM Act, which implements the AIFMD definition and regulatory framework. In broad terms, AIFs are collective investment undertakings that are not Undertakings for Collective Investment in Transferable Securities (UCITS) and that raise capital from a number of investors for the purpose of investing that capital in accordance with a defined investment strategy for the benefit of those investors. Whether a vehicle qualifies as an AIF therefore depends on its substance (capital raising from multiple investors and pooled investment pursuant to a strategy) rather than the label used. An AIF must either be managed by an external AIFM appointed under the AIFM documentation, or be internally managed (in practice, through its board and governance arrangements). In the case of an internally managed AIF, the fund itself is regarded as the AIFM for regulatory purposes.

Marketing rules are central in practice. The AIFM must notify the Norwegian FSA (Finanstilsynet) before marketing to professional investors, and a separate authorisation is required before marketing to non-professional investors; as a principal rule, only authorised (not merely registered/sub-threshold) AIFMs may market to non-professional investors.

An important market feature is the increasing use of the EuVECA funds, which may enable marketing to certain non-professional investors meeting criteria and passporting across the EU/EEA.

The Norwegian state participates in growth company and fund financing directly or indirectly through state-owned investors, including Investinor, Nysnø and Norfund, and through regionally based seed funds. Innovation Norway also backs certain seed funds and provides grants/loans/guarantees supportive of growth companies. The role, mandate and use of such state-supported funds and programmes are subject to ongoing political debate in Norway, including in relation to the prioritisation of public capital, governance and market impact. In 2025, the Norwegian state divested its fund management business, Argentum, to the Norwegian family office EGD Holding.

Against a backdrop of constrained early-stage deployment (as reflected in NVCA’s H1 2025 findings) and stronger exit activity, funds and boards frequently plan for a wider distribution of outcomes and timelines, including:

• staging capital deployment with clearer milestone planning;
• stronger governance and reporting to support follow-on financing readiness; and
• structuring rights to support trade-sale optionality and orderly liquidity.

The level of due diligence varies primarily by company stage and the level of maturity.

For early-stage venture capital investments (series seed to Series A/B), the due diligence usually places a strong focus on commercial and financial diligence and, to some extent, technical diligence, while legal diligence is typically more limited and often focuses on:

• ownership of technology;
• cap table and dilutive instruments;
• founder and key employee employment (including incentives);
• material agreements;
• intellectual property; and
• disputes.

For later-stage and growth investments, the due diligence is more comprehensive and generally aligned with private equity buyout-style due diligence.

The typical duration for a financing round with new anchor investors can vary significantly from transaction to transaction. In practice, the timeline depends on company readiness (data room, IP chain of title, cap table), complexity of structure (eg, preference rights and anti-dilution), and whether there is a new lead negotiating the terms. Processes extending over a period between three to six weeks are to be expected.

Lead investors normally retain separate counsel, while existing investors and founders may have joint or separate counsel depending on alignment of interests and history from earlier funding rounds.

New rounds will usually require certain amendments to the existing shareholders’ agreement and corporate documentation (including governance, veto rights and anti-dilution rights) and often the introduction of additional layers of liquidation preference. Existing (lead) investors often participate in the funding round, which can ease negotiations and reflect the need to obtain the relevant approvals under the existing documentation. Please see 3.6 Corporate Governance regarding the governance and consent rights concepts typically used in shareholders’ agreements.

The Norwegian Companies Act allows separate share classes with different rights if regulated in the company’s articles of association. While investments in common shares also occur, from seed rounds and onwards, investors usually subscribe for preference shares. Preference shares typically carry preferred rights to exit/liquidation proceeds and may also be linked to anti-dilution rights. In terms of liquidation preference, the clear market standard is “1x non-participating”.

As in most jurisdictions, the parties usually initiate the process by negotiating a non-binding term sheet reflecting the main terms of the investment. Once agreed, the investment is usually formalised through the execution of an investment agreement and a shareholders’ agreement.

To consummate the financing round, corporate resolutions are also required, including board minutes proposing the share capital increase, and notice of and minutes from the general meeting resolving the share capital increase and the updated articles of association.

Norwegian articles of association are typically kept short compared to European and US articles of association. Most governance and investor rights are set out in the shareholders’ agreement, and market practice is relatively consistent even without a single established standard.

For pre-seed rounds, investments are often made using a SLIP (Start-ups Lead Investment Paper), developed by StartupLab (Norwegian incubator). The SLIP is similar to a SAFE (simple agreement for future equity), which is sometimes also used by Norwegian companies, typically in fundraisings involving US investors. The SLIP is as an investment that provides a right to subscribe for shares at nominal cost in a future share issue, triggered by events such as a future equity financing round above a predetermined amount, a qualifying corporate transaction, or (if agreed) at the investor’s discretion. The key financial terms are described as typically including a discount and a valuation cap.

Venture capital investors are often granted various types of downside protection mechanisms, with the most common being the following.

• Liquidation/exit preference, ensuring investors receive at least their investment amount back (with or without multiple) before common shares receive proceeds. 1x non-participating liquidation preference is most common, but 1x participating liquidation preference also occurs from time to time.
• Anti-dilution protection, triggered by share issuance at a lower price, structured through the issuance of additional shares to adjust average subscription price. In terms of types of anti-dilution protection, broad based volume-weighted average is most common.

While liquidation preference is generally accepted in the market, anti-dilution protection is more a subject of negotiation between the company and lead investor.

While the Norwegian Companies Act includes statutory pre-emptive rights to existing shareholders, these rights may be set aside by a qualified majority. As such, contractually secured pro rata pre-emptive rights to subscribe for shares in future rounds are usually granted to all investors, irrespective of share class.

The market conditions and development over the past year have led to increased investor scrutiny and a stronger emphasis on downside protection.

Venture capital investors commonly secure various governance rights in the shareholders’ agreement.

Market standard rights include:

• board representation for the lead investor – typically the right to appoint one or two board members;
• consent rights for significant decisions (reserved matters) – eg, amendments to articles of association, capital structure changes, debt, M&A and reorganisations, major contracts and investments, dividends and key hires; and
• information rights, usually regarding operations, financials and performance.

In practice, investors’ operational influence is commonly structured primarily through reserved matters and board participation rather than day-to-day management control, although the intensity of governance can vary depending on the stage of the company and the investor composition. Reserved matters are often linked to a particular share class, rather than to a specific investor (eg, approval by holders of two-thirds of the preferred shares).

The representations and warranties commonly relate to:

• legal status and corporate power;
• conflicts;
• shares and other equity instruments;
• financial statements and management accounts;
• position since the accounts date/valuation date;
• assets;
• IP/IT;
• GDPR;
• material agreements;
• related-party transactions;
• employees and pensions;
• insurance;
• tax;
• compliance;
• insolvency;
• litigation; and
• disclosure.

The more mature the company, the more extensive the representations and warranties; however, the catalogue is generally less extensive than in typical US practice.

As regards recourse and compensation, an important distinction is that a Norwegian limited liability company is legally prohibited to indemnify investors in connection with a share capital increase. Consequently, compensation for breach of warranties must be provided at shareholder level. Compensation for loss is therefore usually structured through the issuance of compensation shares, as the existing shareholders are normally reluctant to offer cash compensation.

The Norwegian government/authorities have established several programmes to incentivise financings in start-up and growth companies, including the following:

• Innovation Norway grants start-up loans, innovation loans and guarantees, and backs certain seed funds;
• SkatteFUNN (Research Council of Norway) offers a tax deduction scheme reducing R&D costs; and
• Export Finance Norway provides loans and guarantees for investments contributing to exports or other domestic value creation.

The Norwegian state also participates in equity financing directly or indirectly through state-owned investors, including Investinor, Nysnø and Norfund, and through regionally based seed funds (see 2.4 Particularities).

The tax treatment of equity investments in a growth/start-up company does not differ from the general treatment of other non-listed companies in Norway. In principle, ordinary income of the company/fund is taxable at 22%.

For Norwegian portfolio companies (typically limited liability companies), equity investments generally qualify under the Norwegian participation exemption, with capital gains being tax-exempt and dividends being taxed at an effective rate of 0.66%.

For EU/EEA portfolio companies, in order for equity investments to qualify for the participation exemption, certain conditions needs to be fulfilled:

• the EU/EEA entity qualifies with respect to entity status (comparable to a Norwegian limited liability company);
• the relevant jurisdiction is not a low-tax jurisdiction; and
• the EU/EEA entity has a genuine establishment and carries on genuine economic activity.

For portfolio companies outside the EU/EEA, qualification for the participation exemption is subject to conditions being met, including:

• the non-EU/EEA entity qualifies with respect to entity status (comparable to a Norwegian limited liability company);
• the relevant company/fund has owned and controlled at least 10% of the shares and votes for a period of two years; and
• the entity is not resident in a low-tax jurisdiction.

The Norwegian government has implemented several initiatives to increase equity financing activity, including direct and indirect state co-investment through state-owned investors and regionally based seed funds (see 2.4 Particularities and 4.1 Subsidy Programmes).

The founders and management are generally expected to co-invest, with the extent varying by seniority and existing equity.

The founders’ and key employees’ long-term commitment is commonly sought through the following.

• Vesting agreements for founder shares, most commonly in early-stage companies, often with good leaver/bad leaver pricing mechanisms, aiming to avoid “dead equity”. Unvested shares are typically subject to a mandatory sale on bad leaver terms, and vested shares are often still subject to a sale obligation but on good leaver terms. In more mature companies (Series B and later), vesting schedules are sometimes treated as “fulfilled”.
• Shareholders’ agreement provisions are also commonly used to support founders’ and key employees’ long-term commitment, including restrictive covenants and lock-up periods that, for a defined time, limit or prohibit the transfer of shares (and, in some cases, other equity instruments) without the required consents.
• Employee stock ownership plans (ESOPs) and share purchase programmes are both commonly used as equity-based incentives for employees. Vesting is usually time-based, but in some cases is also linked to KPIs.

The incentives may range from co-investment (with or without vesting) and share options to more complex leveraged structures with different return profiles, typically used in growth companies. Share options are often less tax-efficient than other equity-based incentives but are more flexible and easier to administer, and they tend to be most relevant for listed companies and early-stage contexts. In line with the typical equity structure in venture-backed companies (see 3.3 Investment Structure), founders will often hold common shares, while investors typically subscribe for preferred shares.

Standard terms often include:

• time-based vesting schedules;
• leaver provisions (good/bad leaver);
• exercise windows and treatment on exit events;
• restrictive covenants; and
• transfer restrictions/lock-ups aligned with the investment round’s governance package.

Capital gains and dividends for management are taxable as capital income at an effective rate of 37.84%, minus a risk-free return. However, investment through a personal holding vehicle may result in capital gains and dividends being largely exempt at the holding company level (with a 0.66% tax on dividends); this treatment generally applies to dividends received by the holding company rather than dividends distributed to the individual (see 4.2 Tax Treatment). By comparison, employment income is taxed at a marginal rate of 47.4%, plus national insurance contributions of 14.1%.

Where share options are granted with an exercise price below fair market value, the discount (ie, the difference between the exercise price and the fair market value at the time of exercise) will generally be taxed as employment income (salary) when the option is exercised.

These differences in tax rate and the timing of taxable events are typically central drivers of whether incentives are structured as shares, options or other equity-linked arrangements, and whether holding vehicles are used.

The key terms of the incentive programme (including its size) are commonly negotiated as part of the financing round, documented in the investment agreement and/or shareholders’ agreement, and then typically implemented by the (new) board following completion. In later funding rounds, the company will usually already have an established incentive programme, and the negotiations therefore tend to focus on whether to continue the existing programme or make adjustments to it.

The size of the option pool is almost always on the agenda in negotiations, but aside from that the incentive scheme typically has only a minor impact on the financing process as such.

The contractual framework for exits is typically set out in the company’s shareholders’ agreement, which commonly governs:

• shareholders’ rights and obligations in connection with a sale of shares or business, an IPO or another liquidity event;
• transfer restrictions (ie, limits on when and to whom shares may be transferred); and
• the triggers that are intended to initiate or accelerate an exit process.

Exit triggers are commonly negotiated and may vary significantly depending on the company’s stage, capital structure and shareholder composition. The most common triggers are:

• reaching a specified valuation;
• achieving defined financial milestones; or
• the lapse of a specified time period.

Time-based triggers have become most common, in order to give the company sufficient time to focus on growth and profitability before an exit is forced or formally initiated. The definition of exit triggers will depend on the specific circumstances and negotiations among shareholders.

Shareholders’ agreements commonly include transfer restrictions intended to balance (i) the company’s and investors’ need for stability and a predictable shareholder base with (ii) the legitimate desire of shareholders to realise liquidity over time. The following mechanisms are commonly used in Norwegian venture-backed companies:

• lock-up provisions;
• rights of first refusal/first offer (ROFR/ROFO);
• drag-along rights; and
• tag-along rights.

Lock-Up

A lock-up provision typically restricts sales for a defined period (either across all shareholders or for certain shareholder groups, such as founders or management). This helps to ensure stability in the shareholder base during critical development phases and reduces the risk of misalignment or signalling concerns created by early sell-downs.

ROFR/ROFO

ROFR and ROFO mechanisms are commonly used to control changes to the shareholder base, and to provide existing shareholders with an opportunity to maintain (or increase) their ownership position. Under a ROFR, a selling shareholder who receives a third-party offer must first offer the shares to existing shareholders on the same price and terms; the seller may only transfer to the third party on those terms if existing shareholders decline.

A practical challenge is that it can be difficult to obtain third-party offers for shares that are subject to ROFR, and therefore investors often prefer a ROFO structure. Under a ROFO, the seller must first offer the shares to existing shareholders before approaching third parties. If the seller rejects an offer from existing shareholders, a subsequent sale to a third party may generally only occur at a higher price.

Drag-Along

Drag-along rights are designed to avoid minority hold-out risk. They allow a majority shareholder (or a group of shareholders meeting an agreed threshold) to require minority shareholders to sell into an exit transaction, typically a sale or an IPO, so that the transaction can proceed with full shareholder participation and clean title transfer. The typical drag threshold ranges between 50% and two-thirds of the aggregate equity.

Tag-Along

Tag-along rights are a minority protection tool. They enable minority shareholders to participate in a sale initiated by a majority shareholder, ensuring the minority can sell on the same terms as the majority and are not left behind with an illiquid residual stake.

Euronext Growth Oslo is most used in Norway as an IPO exit route (and capital markets entry point) for less mature growth companies. It is Oslo Børs’ “junior market”, and the most appropriate marketplace for less mature companies due to less strict listing requirements than the Oslo Børs main list.

The typical offering structures include a private placement directed to a limited group of institutional investors and high net worth individuals followed by listing, and, for more mature companies, a more classic public offering based on a prospectus on Oslo Børs’ main list. For venture-backed companies and their investors, this route can therefore function as a practical IPO-style liquidity event where the company becomes publicly traded, while seeking a listing venue with requirements perceived as more accessible than a main market IPO.

The need for a secondary market trading prior to an IPO is rarely observed in Norway, although some companies are traded “off the counter” through broker desks at Norwegian investment banks, typically with limited volumes, and therefore do not represent an exit opportunity.

For structured liquidity programmes (where used), key legal parameters typically include compliance with transfer restrictions, appropriate corporate approvals and careful handling of information asymmetry.

Legal provisions that become relevant when a Norwegian company is offering equity securities include the Norwegian Private Limited Liability Companies Act, which contains provisions on voting requirements, pre-emptive rights, etc, as supplemented by the company’s shareholders’ agreement.

The Norwegian Securities Trading Act and the EU Prospectus Regulation may become relevant in connection with larger offerings. However, it is rare for an early-stage or growth company equity offering to be structured in a way that triggers a prospectus requirement. For example, there is an exemption from the prospectus requirement where the offer is made to fewer than 150 persons.

Foreign investors acquiring stakes in Norwegian companies may, in certain cases, be subject to a foreign direct investment (FDI) notification obligations under the Norwegian Security Act. The ownership control rules in Chapter 10 apply where the relevant undertaking has been brought within the scope of the Security Act by an administrative decision by the Norwegian government.

In practice, it can be difficult to determine in advance whether a target is covered, as there is no public list of undertakings subject to the Security Act, and such a list is not expected to be made public for national security reasons. The relevant companies will, however, be aware of their status, as the government must notify them. Where a company is within scope, an acquirer must notify the competent authority when acquiring a “qualified ownership interest”, which (as described in the legislation currently in force) includes acquiring one-third of the share capital/participating interests/votes, acquiring a right to become owner of one-third, or obtaining significant influence by other means.

Amendments to the definition of “qualified ownership interest” have been adopted but have not yet entered into force. These amendments introduce lower and repeated notification thresholds at 10%, 20%, one-third, 50%, two-thirds and 90% (covering both direct and indirect holdings). Once in force, the Norwegian regime will be closer in structure to the multi-threshold notification frameworks seen across several other European jurisdictions (ie, more frequent filings at incremental ownership levels).

If the authorities find that an acquisition may pose a “not insignificant risk” to national security interests, they may block the transaction or (if already completed) order it reversed. In addition, the Security Act includes a broader intervention power outside Chapter 10 that allows authorities to intervene against planned or ongoing activities (including transactions) that may create such a risk; this power has been used once to block a transaction where the target was not formally brought within the scope of the Act.