Promising companies are constantly emerging in Finland. Funding and directing them to a growth path can be profitable business. The situation is better than ever, says Marika af Enehjelm, Managing Director of the Finnish Venture Capital Association.
“Venture capitalists are playing an increasingly bigger role in growing and renewing national economies. Even though the sector is relatively young in Finland, already about five per cent of the private sector’s labour force is employed by venture capital and private equity backed companies.”
In af Enehjelm’s opinion, the venture capitalists active in Finland are very competent.
“The technology bubble and the financial crisis have taught investors a lot. Only the best players have remained in the market. At the same time, there has been huge development in entrepreneurship.”
Making Finland attractive
“Europe’s ecosystem is efficient, but it must be developed further. Finland has a good innovation system with, for example, Tekes and the market-driven Finnish Industry Investment holding a big role in funding growth and also in attracting international investors to Finland”, notes Marika af Enehjelm and continues: “However, it is disconcerting that fundraising for Finnish venture capital funds is a challenge. The funds are often too small for foreign investors and also for Finnish institutional investors.”
According to af Enehjelm Finland should aim for a competitive fund model that would take into consideration all the unique features of startup companies. The better the entrepreneurs and the public at large understand the philosophy of venture capital, the easier it is to develop funding models.
Committed investing
Marika af Enehjelm points out that the venture capitalist is interested in the company’s future also after the ownership period.
“A venture capitalist is not committed for life, but five years is a long time in a company’s development curve. One thing that must be considered is the fact that the better the company’s prospects, the better the price it will command. Thus the investor’s impact extends far into the future.”
Read the entire interview from the Growth magazine 3/2013.