Aug 20, 2020 at 3: 11 pm

Clusters & Capital: 10 Challenges to Overcome

Investors capital, business angels & corporate venture teams; a growing number of innovation clusters are starting to look into ‘capital’. But how should an innovation cluster tackle the challenges they will face developing a capital strategy? And how can clusters connect their strategy capital with the bold work coming from the EIC?

Christian Rangen


By: Christian Rangen & Victor Haze 

Over the past five years, we have worked closely with clusters, cluster managers and national cluster programs. One of us as an advisor, the other as an Innovation Manager. Most of the clusters we have met are firmly grounded in the Triple Helix logic; companies working in networks to collaborate more closely with academia and research institutions – supported by government policies and funding.

These clusters are all built on the original ideas behind the Triple Helix in the early 1990’s. This theory is changing, but the world is also changing.

An ever-increasing pace of innovation, an urgent need to build more digital platforms in Europe, a mission to shift Europe from ‘deep-tech research to visionary innovation and scale-ups’ are just some of the drivers behind this change.

These were all laid out in the bold work by the European Innovation Council’s Vision and Roadmap for Impact – all pointing to an inevitable fact. To remain relevant, clusters need to shift from a Triple Helix model to a more entrepreneurial-driven Pentagon model, where entrepreneurship and investor capital emerge as natural parts of any thriving Innovation Cluster, effectively making it a “Supercluster”.

This shift is echoed in the EIC Roadmap stating, “The EIC must bring together communities of science and entrepreneurship that have been disconnected, or only loosely linked, for too long”.

The Cluster Paradigm Shift

For most of us working in the cluster arena, this shift is truly a paradigm shift.

Suddenly, cluster boards and cluster managers are facing a host of new strategic questions; how do we attract startup members? What do they need? How can we design scale up accelerator programs for our cluster? How should we work on fast-track to IPO’s? How do we find relevant investors for the cluster? Why would investors be interested in joining the cluster? How do we develop a Cluster Capital Strategy? Or even, what do we do with this ‘capital thing’?

Over the past five years we have helped numerous clusters and cluster programs answer the question, what is our Cluster Capital Strategy? 

From solar energy clusters looking to scale internationally, seafood clusters connecting to global investors in London, US and Asia, and energy transformation clusters trying to grow a global investor base, we have seen different strategies succeed for different clusters.

While entrepreneurship and capital have been important areas over the past five years, recent developments, the rise of digital platforms in the US and China (but not in Europe) and the accelerating decline of old, asset-heavy industries, we believe the need for a cluster capital strategy is more important, more relevant and more urgent than ever.

Leading thinkers across Europe, including the European Innovation Council echo this, with their statement, “EIC shall….Identify, develop and deploy high risk innovations of all kinds with a strong focus on breakthrough, market-creating and/or deep-tech” and to “support the rapid scaleup of innovative firms (mainly startups and SMEs) at EU and international levels along the pathway from idea to market”.

In our view, this is a massive innovation and opportunity for clusters, in Europe and beyond to get started on developing their Capital Strategy.

In this short article, we have gathered our observations and experiences with the top ten challenges you are likely to face.. We believe these challenges are equally valid from Bilbao to Bergen, from Toronto to Riyadh. Yet, every cluster, big and small, needs to develop its own, unique Cluster Capital Strategy.

Here are the ten top challenges you are likely to face and how to overcome them.

1. Challenge: The Board – lack of capital focus

Solution: Select one Head of Capital Strategy at the board level.

This would naturally be an experienced capital actor (angel investor, fund manager, accelerator fund manager), invited into the Board with this specific mandate. The first step for the board is clearly aligning on why we need a capital strategy and why it matters to our members, our cluster and our wider industry development.

Without a clear why, strong buy-in, genuine support and a basic level of knowledge of investor capital at the Board, developing a Capital Strategy has little to no chance of success.

Our observation is that very few clusters have a clearly defined (capital) strategy, with targets, KPI and action plans. Few – if any – have this area as a specific Board focus and fewer still of the Board members understand how and why this is important to the future development of the cluster. At best the Board Members with an entrepreneurial background have a grasp of financing needs for their own companies, but don’t transgress this into the cluster they are now part of.

2. Challenge: Cluster Management is lacking specific VC / Capital knowledge

Solution: The Cluster Manager has the overall responsibility for the development and implementation of the capital strategy, but she does not need to have a detailed technical insight into capital strategies.

The Manager should focus on the members’ needs and ambitions with regards to capital. She should have a deep insight into fundraising needs, skills and gaps in the cluster. But she does not have to handle the investor side to things, with syndicate structures, cap table complexities and deal structures.

In most of the more than 50 clusters we have worked with, the Cluster Manager has not been able to explain the relevance, the need for or the importance of capital for his own cluster’s members.

3. Challenge: Staff organization lacks the role of Investor Relations Manager

Solution: Develop the role ‘Investor Relations Manager’ (IRM).

This may be a part-time (%) or full-time role. The IRM must have previous, hands-on experience with early-stage investments, venture funds or growth capital. That means your traditional banking executive is not a great fit in this role.

Ideally, this is a person with 5-15 years of experience in early-stage investments. Preferably having raised funding for multiple ventures, set up a venture fund and having a broad network in the global investor community.

While the role of Investor Relations Manager is rare, we do see numerous examples of this role being filled with people with zero relevant background, zero knowledge and even less network in the industry. Naturally, as you would expect, the results achieved stay well behind what can be expected or what is needed.

If you want to see what a profile for a great Investor Relations Manager would need to look like, sign up for the 100% online Global Cluster Leadership Program, and learn from Jeremy McCrohan, Head of Investor Relations, Norway Health Tech Innovation Cluster. 

4. Challenge: Mobilizing the cluster members

Solution: Set up a dedicated Innovation Group on Capital Strategy in order to spread more knowledge and activism around capital investment and its possibilities.

This group should be led by the Investor Relations Manager, with startup entrepreneurs, scale-up founders, business angels, investors, venture fund managers, accelerator CEOs, corporate venture teams and ecosystem builders as key members.

The Innovation Group: Capital can lead the work on the following five items.

5. Challenge: Limited understanding of the capital ecosystem

Solution: Start by mapping out the current ecosystem for capital in and around the cluster.

This needs to be done simply to understand the current starting point. Whether it is digital health, mobility, fintech or ocean space, the current capital ecosystem should be mapped out in great detail.

Note, you will need to separate different investors based on legal strategy, investment strategy, targeted funding round and pre-money valuation, syndicate preferences and geographical focus.

Start locally and quickly build from there. You might be surprised what you can find as opportunities in your local area. Make sure though to also get beyond the first local group of investors (those you can reach on a bicycle). Once you start working on this, you should be able to understand how they are different, which ones can help support your cluster members now and which ones you can use in your later development stages.

Map these ‘financial actors’ in a structured format and tool. (Tip: we recommend using the Supercluster Capital Strategy Map, either in PDF or in the Strategy Tools App.)

Supercluster Capital Strategy Map

In our work with clusters around the world, we recommend a first target of 100 relevant and qualified investor prospects. This should be achieved within the first few weeks of working. Going beyond that, every cluster should aim to build a database of minimum 1,000 qualified investors, to truly build the scalable and professional ecosystem for the long-term. This would usually require six to 24 months of focused work.

6. Challenge: Missing a clear picture of capital needs across the cluster

Solution: Map out your members’ needs, based on their maturity, scale up stage and long-term capital requirement.

By doing so this mutual exercise will map the aggregated capital need over an 18 – 24-month period.

You may want to use the Cluster Members Map to map and analyze the capital need.

Cluster Member Map

Working with the CEO of a digital health cluster, we mapped out the growing startup community in the cluster. The CEO was quite shocked when the analysis revealed an aggregate capital need of €25M, just among the startups and scale-ups alone. This quickly kicked off a series of ‘mini-accelerator programs’ for the cluster, to get the startups more investment ready.

7. Challenge: Not having a Cluster Capital Strategy

Solution: Once your basic information foundation is in place – that is, you understand both the member needs and current investor landscape, you can start developing your actual Cluster Capital Strategy.

Now, always make sure you have really completed steps #5 and #6 before you start #7.

Your goal should be to develop a long-term ambition, specific targets and KPI’s, ideally on a 1-year, 3-year, 5-year and 10-year timeline.


We have used the Supercluster Capital Strategy with great success in various cluster initiatives around the world. This tool will easily guide you and your Innovation Group: Capital through the process, step by step.

When developing this strategy, we strongly recommend bringing in various stakeholders and build this in an open, collaborative manner. Think open source and ecosystem, not control and a small project team. Many clusters would also be perfectly capable of running this as a collaborative, digital strategy project, using platforms like Miro or Mural to allow hundreds of members and investors to contribute to the strategy development over a period of a few weeks.

In our experience, three key items emerge during this process.

I. Many small or few bigger?

We see a tendency for clusters to drift towards fewer, but bigger investors in this phase. This would be a mistake. We suggest developing a much larger investor base, with many smaller ones to begin with. Of course, over time you will find the right balance of seed, scale and growth-stage investors for you.

II. Local or…. Global?

All clusters think, act and thrive local. Don’t bring that mindset to your Capital Strategy. Think regionally and globally in your work here. Connect with the leading investors in your cluster theme, regardless of location. Clusters that bring in only local investors miss massive opportunities.

III. Should we build our own cluster venture fund?

Quick answer, yes. You should.

Granted, you need the skills, knowledge, people and structure to do it. But you should. As trust-based collaboration platforms, Clusters have a unique position to raise and build on. This can also grow into a future business model for the cluster. So, yes, you should. Just make sure you have an active co-investment strategy in place.

For future thinking Clusters, the EIC vision and Roadmap states “We recommend that this is organized through thematic “Ecosystems of impact”, where large companies come together with entrepreneurs to innovate at scale”, and “…as next steps, we believe a much stronger outreach and engagement of the whole venture capital and investor community is needed”.

In our experience, this is exactly what leading clusters would do as a natural part of their Cluster Capital Strategy.

Want to learn more about building strategy for Superclusters? Pre-register for the upcoming book, Innovation Superclusters: a new playbook for economic growth


8. Challenge: Limited knowledge about capital within the cluster

Solution: Develop a series of capacity development programs for the cluster, and key ecosystem partners.

These knowledge development programs should range from early startup introductions all the way up to year-long advanced-level programs. Naturally, many of these can be built 100% digital and delivered in a scalable, self-service model, while others would benefit from being blended, combining face-to-face workshops with digital learning programs.

In our work, we have seen and helped design programs like:

  • Introduction to investments (100% digital)
  • Basic capital program (100% digital)
  • Meet the investors (half-day)
  • Investor capital in clusters (2-day)
  • Startup CFO Program (2-day)
  • Corporate Venture Capital (2-day)
  • Angel investors in clusters (blended, digital and in-person, 1 + 1 + 1 day)
  • Startup: investor readiness program (blended, digital and in-person, 3-month)
  • Cluster Scale Up Program (blended, digital and in-person, 9-month)

For advanced users, some clusters may also want to look into programs like

  • VC unlocked (5-day program, US, Asia)
  • Executive Venture Capital (5-day program, US, UK)

Interestingly, many of these programs are perfectly suited across clusters, in a cluster-to-cluster collaboration model. Think, five or ten Solar Energy Clusters could connect and collaborate on these programs for access to new investor networks, knowledge sharing and community building.

While we are not seeing many of these international collaboration networks on Cluster Capital Strategy, we do expect these to emerge more visibly in the coming years.

Learn how Andreas Morland, founder & CEO of SeaSmart was able to successfully raise his funding round, thanks to the 3-month program Are You Ready to Raise Capital. Read more.

9. Challenge: Not really relevant to the cluster’s big, corporate members

Solution: Identify the needs of your large corporate members

Tip: “If you don’t have a lot of large corporate members in your cluster, this could be a reason for them to join you as you are working on a more comprehensive strategy that is beneficial for their specific challenges…”

This is not an obvious point to everyone, but we believe this is a key point for long-term success!

By mapping out the needs of the large corporate members, the cluster can identify larger strategic investment areas (themes) that matter to the large corporates, then develop dedicated investment programs around these themes.

This is fully in line with the recommendations of the EIC of “building portfolios of startups clustering around similar themes that can be curated and actively managed by EIC Program Managers”.

We have successfully helped clusters implement the Cluster Startup Portfolio tool to identify the strategic investment areas, then map out 120+ startups across the entire portfolio. You can work on the Portfolio tool directly on the Strategy Tools Digital Platform or simply download the PDF.

We recognize few clusters have all the required information up front, but by working through the steps, every cluster can identify these strategic themes and get started on mapping out its members. It requires a more advanced capability, but can create a long-term, high-impact for all members involved.

10. Challenge: Overwhelming topic and limited resources

Solution: Develop your 18-month action plan

Finally, every cluster needs to focus on execution. This is a recurring theme in many cluster organizations. There is so much going on that helicopter view is sometimes really hard; this would mean you have to design your action plan with your principal financer/ funding organization in collaboration. (e.g. your province or national government) as to bring focus and priority first to the action plan.

It is a fact of life that most clusters struggle with resource constraints and limited time/people/funding. Recognizing this, we suggest developing a realistic yet ambitious 18-month action plan.

You are not going to achieve everything in the first 18 or 36 months. Focus. Select a few ‘must-win-battles’. Make hard priorities.

Think deeply about partnerships, collaboration models and co-development with other clusters. Engage your key stakeholders and your Innovation Group: Capital. Partner with accelerators rather than building everything in-house. And most importantly, listen deeply to what your growing community of investors want and expect.

Evaluate. Adjust. Learn as you go.


Learn how we worked with NCE Seafood Innovation to design and deliver a 3-month blended program on Startup Fundraising. “Are you ready to raise capital” was launched Pre-COVID, November 2019, with a combined digital & in-person program design, allowing seven startups to get investor ready in just three months. Read more


Most of all; get those quick wins

For clusters just getting started on their Capital Strategy, there is a lot of new domain knowledge and moving parts to manage. For the large majority, this is a completely new domain. Start small. Aim for some quick wins. Celebrate the first five, ten investors that sign up. It is better with €1 million activated and invested rather than €100million on the horizon. Work with a small group of startups to help them get investor-ready. Teach them the Investor Map. Help them build investor syndicates. Support them in closing their first round of fund-raising. Build from there.

For both Emerging Clusters, Growth Clusters and Superclusters, investors and capital will be a critical part of your future strategy. The question is only how you get started, what is the right Capital Strategy for you and when do you start? 


Do you want to learn how to build a world-class Cluster Strategy?

Join the 100% digital Global Cluster Leadership Program. Get the tools, case studies, learning and community you need to get started on your cluster capital strategy. 100% online. Sign up and get started today. 

Christian Rangen

Christian Rangen

Strategy & transformation advisor to companies, innovation clusters, ecosystems and governments around the world.


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