Financing and business accelerators for high-growth firms in Finland

Pertti Valtonen, CounsellorMinistry of Employment and the Economy, Finland

International Workshop on Entrepreneurial Ecosystems and Growth-Oriented Entrepreneurship

The Hague, 7 November, 2013

Government policy in financing high-growth firms

• Bringing continuity to the market with a fund of EUR 1 billion.• Starting to use asymmetric profit sharing to attract private

investors.• Alongside supply of capital to support demand with Vigo

accelerators.• Alongside providing capital to use tax incentive for business angels

and R&D tax incentive for enterprises.• Streamlining the seed and early stage government financing.• Moving from direct investments to fund investments.• Changing priority from subsidies to equity investments.

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Vigo Accelerators

• The Vigo Accelerators are private companies that are run by experienced entrepreneurs.

• The Accelerators offer their proven business expertise, funding, and extensive contact networks to the target companies.

• The Accelerators invest both money and time into the target companies and take on both a strategic and an operative role in the companies.

• The Accelerators have been selected from the best applicants in their respective fields in a public procurement process.

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Combine The Best Forces to:Increase The Number of Successful Growth Companies and To Develop the Ecosystem

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Experienced serial entrepreneurs

The most Potential start-ups

Public and privatefunding

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Vigo Venture Acceleration ProcessFor Potential High Growth Start-ups

Deal flow sources

Experience Involvement

Investment

Universities andResearch Centers

Regional centers and COE’s*

IncubatorsInnovation Foundation

Corporate spin-offsOther

Further financingoptions

VC’s

(Super)angels

Industrial investors

Organic growth, other

Venture accelerators

Pre-seed accelerators

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How does Vigo work?

2009

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Company applies directly to the accelerator of it’s choice.

Acceptance is based upon eva-luation of the business idea, team and sui-tability of the company for the program.

The accelerator managers take a hands-on role in operations and biz development

Fast Growth

Description

The acceleration period lasts 18 to 24 months The accelerators’ main revenue model is based on the growth in the

company’s value at the point of exit. Monthly fees may also be included in the model.

The companies are able to utilize Tekes’s and Finnvera’s funding (grants, loans and investments).

Total funding package (private and public) for the Acceleration Period varies between 1 to 2 million euros.

The accelerator invests time and money and becomes a shareholder in the company

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Vigo Accelerators

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Investors and VC’s:

MHS Capital

AMBIENT SOUND INVESTMENTS

Juuranto Invest

Troll CapitalKasvurahastojen Rahasto

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Great case stories!

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Growth of Funding (%) Between 1July12 and 30June13 by Source

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Private and Public Funding in Target Companies

Cum

ulat

ive

fund

ing,

M€

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Framework conditions for entrepreneurship

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Source: Nordic Growth Entrepreneurship Review 2012

Policy statements

• Critical mass of passionate entrepreneurs striving for rapid growth,• Infusion of top-level business experience into startups to guidance

on how to achieve breakthroughs in global markets,• Strong enough incentives for seed investors (tax breaks,

asymmetric profit sharing),• Government funding to match private investments, if needed.

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