A Matter of Scale

The Flywheel Switzerland Hasn’t Built

Roughly seventy percent of the Swiss Growth Fund’s money is invested in Switzerland, and Nils Granath is clear that this is a choice, not a patriotic reflex.  “The fund has every structural advantage in its home market, so failing to deploy there would be an indictment, not a virtue”, Granath explains. But he is just as quick to say the opposite also has to be true. “You have to be active abroad as well,” he says. The fund holds a number of foreign portfolio companies on purpose. They give it an international yardstick, a way to judge what a Swiss company is really worth by comparing it against the best elsewhere. The domestic focus and the foreign exposure are not in tension. One sets the standard the other is measured against.

The trouble is what happens after the home investment is made. A Swiss growth company that needs to run the second half of its race finds the track in front of it is missing things many competitors abroad take for granted. And Nils, who spent the first part of his career inside the ecosystem that has all of them, is unusually well placed to name what is absent.

Take the Money and Run

Start with how Swiss success stories tend to end. The country produces a steady stream of strong early-stage companies, many of them spun out of ETH or EPFL on the back of publicly funded research. Then, again and again, they sell early, often to a large American technology company that wants the team more than the product.

“Swiss government-funded research is giving way to Google and Meta or Apple,” Nils says. “All these equity hires, people are celebrating, it’s an exit. But I think it’s also we lack the funding to fuel their growth.”

He does not blame the founders. He has watched the choice up close enough times to find it entirely rational. A founder can either take an offer that buys a house and a comfortable life, or keep going into a headwind, hunting for growth investors who may not exist, carrying all the risk personally.

“Then it’s much easier just to take the money and run,” he says. The phrase he used in a Venturelab interview, and stands by, is that Switzerland needs to move away from early exits through equihires and toward building companies into global market leaders. The raw material is there. The capital to finish is not.

One Shoe Off

The single largest piece of missing machinery, in his telling, sits at the European level, and Switzerland, is for many parts, locked out of it. The European Investment Fund and European Investment Bank channel enormous sums toward growth companies and the funds that back them. Swiss companies and Swiss funds, by virtue of the country’s relationship with the EU, have been mostly outside the system- although the Horizon programs and EIC instruments have opened up again to Swiss recipients in 2025.

He has watched the difference play out across his own portfolio. Two of his companies sit outside Switzerland, and the contrast is stark.

“Both my portfolio companies, Varjo in Finland and NILT in Denmark got this very nice EIF venture debt,” he says. “Which really helped them when they needed it.” A Swiss company at the same stage has no equivalent. What it has instead, he says, is exposure to commercial venture-debt providers on far harder terms. “Here we are very thankful for the support of  the Technology Fund, but that’s capped at three million Francs.”

The exclusion compounds at the level of the fund itself, and here Nils does the arithmetic out loud. The follow-on Swiss Growth Fund II raised around CHF 200 million so far. Had it been raised in France, he says, it would have drawn matching capital from the state investment bank BPI, then more from the EIF on top. “We would have tripled the money immediately,” he says. “We would have 600 million instead of 200 to invest into Swiss growth companies.” The Swiss government does not need to fund this directly, he points out. It would largely be a matter of joining the programs that already exist. It has not.

This is the marathon run with one shoe off. The Swiss runner is not slower or weaker. The runner is simply missing equipment that everyone else in the race was handed at the start.

Quietly Crossing the Border

A company that cannot get the capital it needs at home does not always stay home. “That’s why they will move abroad,” he says. “We had that discussion with some companies. They can open a subsidiary in France if they’re in the Romandie. They can access the BPI money. If you flip over the Atlantic and become a US company, there’s huge benefits for that.”

It is a slow leak rather than a dramatic exodus, and it follows the path of least resistance. A French-speaking company near the western border runs operations in Frence company without moving very far in any sense that matters to its engineers. The incentive to do so is not sentimental. It can decide whether a company gets the growth funding it needs or not.

There is a counterargument, and Nils has heard it: that public money flooding into startups produces zombie companies, businesses that survive on subsidy rather than merit. He is unmoved. “It’s money better spent than subsidizing industries that refuse to innovate,” he says. The government already props up plenty of industries with no future, in his view, where the spending is simply lost. Growth companies at least carry the possibility of a return. The objection, to him, is less an argument against funding startups than an argument that has never been applied consistently to anything else the state pays for.

The Foundation in Stockholm

When Nils reaches for a model, he does not reach for France or Germany, with their heavily state-directed funding. He reaches for Sweden, and the distinction matters to him. Sweden, like Switzerland, is a fundamentally capitalist economy that does not believe the state should be running venture capital.

What Sweden built instead is an industry fund called Industrifonden. The story he tells is that two decades ago a set of separate state-fund initiatives were merged into a single foundation, then deliberately placed at arm’s length from government.

“It’s independently managed,” he says. “The board is independent, there are no politicians in there who can decide now we have to do something in some region. It’s highly professionally managed by a foundation.” It pays competitive salaries and has become, in his description, something more valuable than a pool of capital.

“It’s a kind of breeding school for VCs,” he says. “People join, they work there for five to ten years, and then they set up their own VC fund.” The fund does not just write checks. It manufactures the investors who will write the next generation of checks. It is, in other words, the connective tissue, the thing he kept gesturing at when he described the Nordic ecosystem in part one of this series.

“You could call it a flywheel” he says. “Which we haven’t got going yet in Switzerland.”

Switzerland has tried. Nils ticks through the attempts, the Swiss Entrepreneurs Fund, and now the privately led efforts to build something durable. None has yet produced the self-sustaining machine he watched operate in the Nordics. And the model has a cruel timing problem. “It takes ten years to establish that,” he says. Ten years from now may be too late.

The Money Coming Back

The last piece of the flywheel is the one that makes the rest of it turn: exits, liquidity, money flowing back to the investors who can then deploy it again. Just like the recent exit of Memo Therapeutics, with a total potential consideration in excess of 700 million EUR. Here the Nordic comparison stops being a matter of opinion and becomes a matter of record. While at Swisscanto, Nils brought DNB Carnegie, the Nordic investment bank, to Switzerland to present to local pension fund investors. The point was to show what a functioning growth-stage IPO market looks like, because a venture ecosystem without one is a machine missing its return loop. “You need that ecosystem,” he says. “Not only the VC funds, but you need the IPO, the liquidity, the money coming back.”

The timing of that introduction looks sharper in hindsight than it could have at the time. In 2025, DNB Carnegie became the single most prolific arranger of initial public offerings in Europe, and the Stockholm exchange alone accounted for close to half of all European IPO volume for the year. The flywheel Nils says Switzerland has not started is, in the ecosystem he came from, spinning faster than it ever has. Further he appreciates the efforts done by the SIX Group as well as his colleagues at ZKB Capital Markets to grow the Swiss IPO ecosystem.

He is not pessimistic, exactly. He invests in Swiss companies every year, sits on their boards, and believes in the quality of what the country produces. But he has run the other course, and he knows what it feels like to run it with both shoes on. The talent in Switzerland, he is certain, is not the problem. The question is whether the country builds the machine in time for the runners it already has.