FiBAN-Finnvera - Business angel activity 2012

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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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FiBAN-Finnvera - Business angel activity 2012

  1. 1. BUSINESS ANGELACTIVITY IN FINLAND 2012 FiBAN-Finnvera questionnaire 2/2013
  2. 2. 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.
  3. 3. 1. Business angel activity 2012 High respondents rate approves thatQuestionnaires sendtto +400 the members are active andRespondents 99 angels (23%) motivated to improve businessOnly FiBAN members 46% angel activity.Only Finnvera members 14%Members of both networks 39%Women 3%
  4. 4. 2. Business angel activity 2012Total number of business angel 235investments announced Business angels hadPortfolio companies 69 on average been very active in 2012 andAverage investments per investor 2.5 made on average Over €14 million large investments.Capital investments total (€) (€14 198 204,00) Also sweat equityAverage capital investment €60 418 investments had an important role.Median for capital invesments €30 000Investment range €1,000 - Over €1 million 25% of total investmentSweat equity amount (83 answers)
  5. 5. Estimated business angel activity in Finland MEUR 50Assumpitions: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.
  6. 6. 3. Business angel activity 2012Investments made as a) Private person 40% Typical investment b) Through a company 60% was made in aInvestments made: syndicate with a) Alone 30% other business angels. b) Through group investment (Syndicate) 70%Group investments made with: a) Business Angels 70% b) VC / Funds 15% c) Public institutions 15% (Finnvera, Tekes, etc)
  7. 7. 4. Business angel activity 2012Sectors that received investments:(Based on European Business Angels Network) a) ICT 47% ICT represented b) Finance and business services 6% half of all c ) Logistics and transport 3% investments. d) Manufacturing 6% Other important e) Mobile 10% sectors were f) Creative industries 4% mobile, g) Biotech and life sciences 1% healtcare/medtech. 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%
  8. 8. 5. Business angel activity 2012Investments made were: a) Initial 50% Investments were b) Follow-on 50 % divided in halfThe stage of the company when investment between initial andwas made: follow-on a) Seed 23 % investments. Seed phase b) Start-up 38 % companies received c) Early-growth 39 % a little less investments thanJobs created in portfolio companies: 275 (+33%) more mature Largest increase of jobs in one company 42 jobs companies. New jobs per investment 5 Cost of one new job €28 000
  9. 9. 6. Business angel activity 2012Exits 30Form of exits: Over half of the exits made A) Buyout 17 % during 2012 were profitable. B) Merger 10 % On average respondents hade made 1.3. exits, thus; C) Sold to another investor 27 % they can be considered D) Bankruptcy / Closing down 40 % experienced business angels. E) Other 7%Losses / Profits from exit: A) < 1X 45% made losses B) > 1X - < 10X 55% made profits C) > 10X One over 10X
  10. 10. Finnish business angel activity on averageRespondents 97 persons Business angels had made 600Average age 50 y investmentsWorked as business angel Approx. 5.7 y totalling over €60Business angel activity million. a) Full-time 14 % b) Part-time 62 % c) Hobby 24 % Over 600 investmentsAmount of angel investments in total (Average 6.6)Capital invested in total € 60 million a) Average Over €650 000 € b) Median €200 000Total number of exits Over 100Average exits per investor 1.3
  11. 11. 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.
  12. 12. CONTACTRiku Asikainen Leo HoutsonenFiBAN board chairman Veraventure Oy, Managing Directorinfo@fiban.org leo.houtsonen@finnvera.fiJan Oker-Blom www.fiban.orgFiBAN, Managing Director Twitter: FiBAN_orgjan@fiban.org LinkedIn: FiBAN group(+358)405517551

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