Investment process

Screening

Screening

At the first meeting we preliminarily assess the investment strategy of the fund and get to know the investment team. We pay special attention to:

  • the investment strategy and market opportunity,
  • deal flow prospects
  • the team's expertise in venture capital and private equity.

We spar with teams gathering their first fund to help them grasp what requirements institutional investors set for their fund investments. The discussions give a team the opportunity to develop their proposal and to evaluate for itself the expertise it commands.

We also discuss the fund-raising plan. Fund-raising requires the involvement of other co-investors.

If at this stage the fund project suits our investment focus, and other investors are also interested, the fund proceeds into the due diligence phase.

Due diligence

Due diligence

In the due diligence phase we assess at least the following aspects:

  • Composition, professional skills and commitment of the team
  • Investment strategy and focus of the fund
  • Track records or other earlier experience
  • Impact on the ecosystem
  • Responsible investment policy
  • Preliminary terms and conditions

During the assessment it is important that the team continues fund-raising and negotiations also with other investors.

Finnish Industry Investment’s Board of Directors makes all investment decisions. In the case of FoF Growth, the Investment Council of FoF Growth addresses investment proposals.

Negotiations

Negotiations

After a positive investment decision, we start to negotiate the terms and conditions.

  • FII and FoF Growth always invest on the same terms as other investors (e.g. institutional investors and family offices)
  • We seek a return from all investments

Successful contract negotiations result in FII and/or FoF Growth giving a commitment to the fund. The fund is established and the investment team starts when the team has gathered the minimum amount of commitments from investors.

Term of a fund

Term of a fund

The team starts to invest, develop the portfolio companies and create value. Towards the end of the fund’s term the focus shifts to exits.

It is important to keep investors updated about all investment developments. This helps investors evaluate the team’s opportunities to gather a new fund when the time comes.

Expiry of the term of a fund

Expiry of the term of a fund

FII and FoF Growth invest only in fixed-term limited partnerships or similar fund entities. By the end of the term, the fund must have exited from all its portfolio companies. After this, the fund is dissolved.