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BUSINESS ANGEL ACTIVITY IN FINLAND 2012 "BUSINESS ANGELS INVESTED OVER EUR 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. 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. In brief: • 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. More information: https://www.fiban.org/business-angel-activity-finland-2012
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BUSINESS ANGEL
ACTIVITY IN FINLAND 2012
FiBAN-Finnvera questionnaire 2/2013
Business angel activity 2012
• Structured angel activity is increasing.
• FiBAN and Finnvera have agreed that
business angel activity is moved over to
FiBAN.
• Networks cover ca 450 registered members.
High respondents
rate approves that
the members are
active and
motivated to
improve business
angel activity.
1. Business angel activity 2012
Questionnaires sendtto +400
Respondents 99 angels (23%)
Only FiBAN members 46%
Only Finnvera members 14%
Members of both networks 39%
Women 3%
Business angels had
on average been very
active in 2012 and
made on average
large investments.
Also sweat equity
investments had an
important role.
2. Business angel activity 2012
Total number of business angel
investments announced 235
Portfolio companies 69
Average investments per investor 2.5
Capital investments total (€) Over €14 million
(€14 198 204,00)
Average capital investment €60 418
Median for capital invesments €30 000
Investment range €1,000 - Over €1 million
Sweat equity 25% of total investment
amount (83 answers)
Estimated business angel activity in Finland MEUR 50
Assumpitions:
1. Registered business angels = MEUR 28
(Respondents MEUR 14 x 2 [3/4 of members are assumed to invest the
same as 1/4]).
2. Large investors (not members): ca 30 persons x €200k= MEUR 6.
3. Small investors (not members): 1000 persons x 1k€ = 1 M€.
4. Co-investment with public funding: MEUR 10 Finnvera, Others MEUR 5.
Comparison:
• Finland is expected to have approximately 1000 business angels.
• Networks have a shortage of of large and small scale investors.
• Angel activity in countries like Finland: Norway approx. 2500 angels (4.8
million inhabitants), New Zealand (600 registered members)
• In the USA, the private sector invests twice as much as VCs.
Typical investment
was made in a
syndicate with
other business
angels.
3. Business angel activity 2012
Investments made as
a) Private person 40%
b) Through a company 60%
Investments made:
a) Alone 30%
b) Through group investment (Syndicate) 70%
Group investments made with:
a) Business Angels 70%
b) VC / Funds 15%
c) Public institutions
(Finnvera, Tekes, etc) 15%
ICT represented
half of all
investments.
Other important
sectors were
mobile,
healtcare/medtech.
4. Business angel activity 2012
Sectors that received investments: (Based on European Business Angels Network)
a) ICT 47%
b) Finance and business services 6%
c ) Logistics and transport 3%
d) Manufacturing 6%
e) Mobile 10%
f) Creative industries 4%
g) Biotech and life sciences 1%
h) Health care/Med Tech 8%
i) Social and sustainable investments 2%
j) Energy 2%
k) Environment and Clean Tech 6%
l) Retail and distribution 5%
m) Other, what? 5%
Investments were divided in half between initial and follow-on investments.
Seed phase companies received a little less investments than more mature companies.
5. Business angel activity 2012
Investments made were:
a) Initial 50%
b) Follow-on 50 %
The stage of the company when investment
was made:
a) Seed 23 %
b) Start-up 38 %
c) Early-growth 39 %
Jobs created in portfolio companies: 275 (+33%)
Largest increase of jobs in one company 42 jobs
New jobs per investment 5
Cost of one new job €28 000
Over half of the exits made
during 2012 were profitable.
On average respondents
hade made 1.3. exits, thus;
they can be considered
experienced business
angels.
6. Business angel activity 2012
Exits 30
Form of exits:
A) Buyout 17 %
B) Merger 10 %
C) Sold to another investor 27 %
D) Bankruptcy / Closing down 40 %
E) Other 7 %
Losses / Profits from exit:
A) < 1X 45% made losses
B) > 1X - < 10X 55% made profits
C) > 10X One over 10X
Finnish business angel activity on average
Respondents 97 persons
Average age 50 y
Worked as business angel Approx. 5.7 y
Business angel activity
a) Full-time 14 %
b) Part-time 62 %
c) Hobby 24 %
Amount of angel investments in total Over 600 investments
(Average 6.6)
Capital invested in total € 60 million
a) Average Over €650 000 €
b) Median €200 000
Total number of exits Over 100
Average exits per investor 1.3
Business angels
had made 600
investments
totalling over €60
million.
SUMMARY
• Business angels have become an important factor for new
business and jobs in Finland.
• On average the activity is relatively professional.
• ICT and mobile the dominant sectors among portfolio
companies.
• In the future it would be important to foster learning among
inexperienced business angels and, in general, to promote
successful exits.
CONTACT
Riku Asikainen
FiBAN board chairman
Jan Oker-Blom
FiBAN, Managing Director
(+358)405517551
Leo Houtsonen
Veraventure Oy, Managing Director
www.fiban.org
Twitter: FiBAN_org
LinkedIn: FiBAN group
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