Collaboration between four business angel networks brought foreign investors to Finland and taught Finnish investors to think globally.
Finnish Business Angels Network (FiBAN) is part of a consortium of four business angel networks for the last 2 years. In Finland, Denmark, Estonia and Norway, 400 angel investors made 22 startup investments worth almost 5 million euros. A record high number of cross-border investments were made in these rounds.
Finnish Business Angels Network (FiBAN) has been in a key position in the New Nordic ecosystem ever since it was established in December 2010. Angel investors are private individuals, who invest their own money and know-how into very early startups. Due to the low amount of deal flow and small inner markets of the Nordic and Baltic countries, there has been a clear need for cross-border collaboration. In addition, those beginning their startup investing activities need the support of a syndicate, a group of experienced business angels, who can help in assessing the readiness and potential of a startup.
Cross-border collaboration and investing was strengthened when FiBAN, together with Danish Business Angels Network (DanBAN), Estonian Business Angels Network (EstBAN) and Business Angels Network Norway (BAN Norway) took a part in Horizon2020 funded project called Nordic Angel Program (NAP). The program’s goal was to educate business angels, enable cross-border syndication, and facilitate funding rounds for startups in the New Nordic (Nordic + Baltic) area. NAP began in January 2018 and ended with a big pitching event in Tallinn, December 2019.
Record volumes of cross-border investments in angel investing rounds
In total, 400 investors took part in the NAP program, out of which 123 invested in multiple rounds. Big variety of investors were included; some made their first angel investment; some were really experienced; and a significant number were cross-border investors. Foreign investors came from several countries, including the US, Russia, Belgium, and from neighboring Nordic and Baltic countries. In the Finnish NAP program, 55 investors with 15 cross-border investors, invested 615 000€ into three startups. Two of the startups were Finnish, one was Estonian. These three came out of a group of 731 startups, which applied for the NAP program. Startups were gathered with the help of Arctic15 and Slush tech events.
After completion of the program, 115 cross-border investments were made, which is an unexceptional number for angel investing rounds. Cross-border investors can open up a path into their own home markets, which can be far more valuable for a startup than the initial investment. Startups weren’t the only ones who benefited from the presence of international investors. “In my NAP syndicate there were Norwegian investors, who have been very valuable connections for me after our join investment”, comments Pia Kantola, one of the NAP investors.
The role of cross-border investors is increasing. As FiBAN’s chair of board and one of the NAP syndicates’ lead angel Reima Linnanvirta describes: “It’s very important for angel investors to look outside of their own region. On one hand Finland is a small market, while international investor network helps one’s portfolio startups to breach foreign markets. On the other hand, understanding the strengths and capabilities of foreign startups helps to assess the local startups’ potential in the international market.”
Educated business angels benefit Finnish startups
NAP program’s impact to the European ecosystem was acknowledged already in 2019, when European Business Angels Network EBAN awarded it as the “Best in Globally Engaging the Early Stage Investment and Entrepreneurial Ecosystem in 2018”. The magnitude of the program’s impact will be seen in the future. “Now we have 400 educated angel investors more roaming in the New Nordic area, which are willing and educated to invest across borders. This will definitely be seen as a positive result in Finnish startups’ ability to raise bigger and more international funding rounds”, concludes Reetta Ilo, FiBAN’s international affairs manager and the NAP program leader.
Finnish Business Angels Network (FiBAN) is a non-profit association of private investors on a mission to inspire private investments. The network is one of the largest and most active business angel networks in the world with over 670 approved members, who invested 36 million euros into 435 startups in 2018. FiBAN is a member of the European Business Angels Network (EBAN), and was chosen as the Business Angel Network of the Year in 2012 and 2014. FiBAN received the esteemed Internationalization Award of the President of the Republic of Finland in 2017. FiBAN – Inspiring Private Investments. www.fiban.org
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