Angel investors to provide new capital for start-ups
A completely new type of fund starts in the Finnish capital market, investing in early-stage companies together with angel investors. The new co-investment fund provides public and private funding for businesses selected by angel investors. The fund’s capital is EUR 30 million provided by Business Finland Venture Capital Oy (BFVC). The fund is managed by investment company Innovestor.
The co-investment fund aims to invest in up to 100 start-ups, with a maximum investment of EUR 600,000 per company. Private business angels will look for suitable investments for the fund, and the management company will make investment decisions based on proposals that meet certain criteria. The fund and business angels will then co-invest in the company.
"The co-investment fund is bringing a new and unique funding source to Finnish start-ups. The aim is to strengthen the capital base of seed-stage companies with the support of business angels and to speed up the completion of funding rounds to improve the companies' growth possibilities. Entrepreneurs have a new channel now to find investors, and business angels support business with their expertise. The fund is an excellent combination of public and private capital and private decision-making. Great opportunities are opening up for start-ups and angel investors,” says Petri Serenius, Investment Director at BFVC.
A minimum of three investors required
Private investor groups are expected to form on market terms. At least three angel investors are required to submit an investment proposal to the fund. Group members do not have to be professional business angels. The fund management company Innovestor evaluates the investment opportunities and makes the decisions.
“Finnish companies with a maximum age of five years are suitable for investment. The fund's first investment in the company is at most the same size as the one made by angel investors, and both are required to invest at least EUR 50,000 or no more than EUR 300,000," says Petri Serenius.
“With this fund, angels who have previously acted independently will be able to participate in more interesting investment opportunities with larger investment amounts. For start-ups, the new fund will enable larger funding rounds faster. Early-stage startups and science-based companies play a key role in building a more sustainable world, which is important to us,” says Wilhelm Lindholm, CEO of Innovestor.
“Especially in the current market, where there is a high demand for financing, a new investment method, such as the co-investment fund, comes at just the right time. With the new fund, we will be able to facilitate the initial funding of Finnish startups extensively,” Lindholm adds.
FiBAN helps find investor groups
The co-investment fund will invest in early-stage companies, which are important in renewing the Finnish economic structure. They contribute to the productivity and growth in Finland. In the early stages, business risks are at their highest, so angel investors play a significant role in supporting early-stage companies. The Finnish Business Angels Network (FiBAN) is actively involved in promoting the formation of suitable investor groups for the co-investment fund.
“We have 670 members at FiBAN; their combined capital investments already exceed 400 million euros. There are about 1,700 companies that have received funding and hundreds of new ones are added every year, so we can definitely find suitable investor groups and companies for the co-investment fund," says FiBAN's CEO Tiina Laisi-Puheloinen.
The website of the new fund can be found at www.angelcofund.fi
For more information:
Petri Serenius, Investment Director, Business Finland Venture Capital
petri.serenius@businessfinland.vc
050 599 3683
Heli Mehtätalo-Takala, Director, Marketing & Communications, Innovestor
heli.mehtatalo-takala@innovestor.fi
050 402 6781
Tiina Laisi-Puheloinen, CEO, FiBAN
tiina.laisi-puheloinen@fiban.org
040 750 7417
