Business Angels invested over 14 million in potential growth enterprises
Business angels have become an important factor for new business and jobs in Finland.The ICT and mobile sectors attract the greatest interest.
The Finnish Business Angels Network (FiBAN) and Finnvera have collected statistical data on investments made by private investors in early-stage potential growth enterprises in Finland in 2012. The resulting statistics are the most extensive collected to date in the Nordic countries. They highlight the importance of business angels as investors in early-stage growth enterprises in Finland.
The typical investment was made through a private investor’s investment company, as a syndicated investment with other business angels. The ICT sector accounted for half of all portfolio companies. Other important sectors included the mobile business, health care and health care technology. Investments were divided evenly between initial investments and follow-on investments. Enterprises at the seed stage received somewhat less investments than slightly more mature enterprises, because half of all investments were follow-on investments. In 2012 the number of exits was 30; more than half of them yielded a profit. The respondents had completed on average 1.3 exits during their business angel careers; thus, they can be considered experienced business angels.
The internationally high response rate (ca. 23%) is an indication of the membership’s commitment and high motivation to develop business angel activities. The business angels who responded to the survey were very active in 2012. Their investments totalled over EUR 14 million. There were 2.5 investments per person and the average investment was relatively large; the mean was about EUR 60,000 and the median about EUR 30,000. Sweat equity contributions were also common. They were made in about one in four investments.
Business angel investments had a substantial impact on the creation of new business, and thereby new jobs, in Finland. In the future it would be important to foster learning among inexperienced business angels and, in general, to promote successful exits.
- Respondents: 99 business angels.
- Investments in euros: Over EUR 14 million.
- Syndicated investments: 70%.
- Type of investment: Initial investments: 50% vs. follow-on investments 50%.
- Growth stage of the portfolio company: Seed stage: 23%, Startup 38% and Early growth 39%
- Exits: More than half yielded a profit.
Managing Director Jan Oker-Blom, FiBAN
+358 40 551 7551
Managing Director Leo Houtsonen, Veraventure Oy
+358 29 460 2733
Finnish Business Angels Network (FiBAN)
FiBAN is a national, non-profit association of private investors that aims to improve the possibilities for private persons to invest in unlisted potential growth enterprises. The activities are based on the wish to advance the development of Finnish business and the creation of new jobs through potential growth enterprises.
- A non-profit association of private investors
- Over 270 approved business angel members; at present, more than a hundred portfolio companies
- A national interest group for private investors
FiBAN’s objective is to create a solid foundation for the network of business angels and to offer a place where angel investors and growth enterprises can meet. The purpose is to strengthen and develop the profession of private venture capitalists, i.e. business angels. In addition, FiBAN helps entrepreneurs to build growth enterprises by training and supporting cooperation with investment institutions.
The association represents private investors at the European Business Angels Network (EBAN), where it was granted the “Business Angel Network of the Year” award for 2012.
Finnvera's Venture Capital Investments
Finnvera plc, the State-owned specialised financing company, provides financing for the start, growth and internationalisation of enterprises and for protection against export risks. Finnvera reinforces the capacity and competitiveness of Finnish enterprises by offering loans, domestic guarantees and export credit guarantees. In addition, Finnvera’s subsidiaries make venture capital investments through funds or as direct investments. Direct investments are made in innovative start-up enterprises. At the end of 2012, Finnveras’ Venture Capital Investments had a portfolio of 138 such enterprises. Finnvera’s investments in these enterprises totalled 75.3 million euros, while private investments totalled 145.8 million euros.
In 2012, Finnvera’s Venture Capital Investments made initial investments in 23 enterprises and follow-on investments in 41 enterprises. The total sum invested was 15.7 million euros. Two out of three of these enterprises had received investments from business angels, in total EUR 10 million from 115 angels. About 30 per cent of the angels who had made investments together with Finnvera were members of either Finnvera’s or FiBAN’s angel networks.