Attracting
Venture Capital
in Service Businesses
A Background Paper for the Tekes Serve Programme
Table of Contents
1
Introduction
2
Venture Capital Investments in Service Businesses
2.1 Service businesses as targets for venture capital investments
2.2 Examples of venture capital investments in service companies
2.3 Examples active VCs and angels in service industries
7
7
8
11
3
Attracting Venture Capital Investments in Service Businesses
3.1 Is venture capital the right option for you?
3.2 How to become investment ready?
3.3 How to raise venture capital?
13
13
13
14
4
Conclusions and Recommendations
4.1 Conclusions
4.2 Recommendations
4.2.1 Recommendations for service businesses
4.2.2 Recommendations for Tekes and the Serve programme
16
16
16
16
17
5
19
20
20
21
References
Appendix 1 Some Useful Links
Appendix 2 Some Useful Further Readings
Appendix 3 Biographical Information of Professor Markku Maula
6
List of Tables
Table 1 Table 2 Table 3 Venture and Buyout Deals Made to Finnish Companies
by Industry Sectors in 2008 (Market)
Venture and Buyout Investments Made in Finnish, Swedish, UK and
European Companies in 2008 (Market)
Examples of Active VCs and their investments in Finnish
Service Companies
7
8
11
Attracting Venture
Capital in Service
Businesses
A Background Paper for the Tekes Serve Programme
The purpose of this brief background paper is to support the Serve
- Pioneers of Service Business 2006-2013 programme of Tekes, the
Finnish Funding Agency for Technology and Innovation, as well as
the participating companies of the Serve programme, to improve
their opportunities to raise venture capital finance if and when
needed to facilitate their growth and internationalisation. I would
like to acknowledge valuable support, insights, and comments
from several individuals when preparing this background paper
including Will Cardwell (TechnopolisOnline), Kimmo Halme
(Advansis Ltd), Juha Heinola (Tekes), Leo Houtsonen (Veraventure),
Petri Laine (Veraventure), Scott Sage (BVCA), Risto Siilasmaa
(F-Secure Ltd.), Minna Suutari (Tekes), and Jenny Tooth (Angel
Capital Group). Any errors or omissions are my own.
February 28, 2010
Professor Markku Maula
3
Executive
summary
Venture capital (VC) can be very valuable for ambitious service ventures and help then grow and internationalise. It is not
a suitable financing solution for all companies, but plays often an important role (often combined with other financing instruments) in the financing of the most growth-oriented ventures. Service business is an important sector for VC
and private equity investors. Some of the biggest and most
prominent Finnish VC investments have been made specifically in service businesses. Although most VCs consider service-intensive ventures as potential investment targets, some
have more experience in investing in and supporting service-intensive ventures grow and internationalise than others.
Therefore, it is important for entrepreneurs to select carefully
which investors to approach. Although most companies have
at least a service component in their business model, service business has some specific characteristics that have relevance from the VC investment perspective. These include the
immaterial nature of services which make can make it hard to
prove the concept before the investment and full blown operations. Also the scaling of service business and the protection of the intellectual property are important issues to consider in service business.
For service-intensive new ventures, access to risk capital may often be an important challenge when seeking to
4
grow rapidly and expand operations internationally. In order
to access and benefit from venture capital, it is important to
understand venture capital as a form of finance and whether or not it is relevant and attractive choice in a particular situation, and if yes, how to become investment ready. This investment readiness refers to understanding of venture capital and the process of raising it and working with VCs, willingness to seek and accept external equity finance and related commitments, and investability of the business i.e. ensuring the venture fulfills the requirements of external investors as an investment opportunity. Entrepreneurs can often do a lot to improve their chances of attracting venture
capital investments both by grooming the company to be
investment ready and by running the VC fundraising process smartly. From Tekes perspective, improving the opportunities of client companies to access venture capital to facilitate growth can increase the impact of Tekes funding.
Tekes as a central player in the high-tech start up community can help its client companies by improving the visibility and quality of information concerning investment opportunities among its clients, by strengthening the certification
role of Tekes funding, and networking and further developing the collaboration with VCs.
Suomenkielinen
tiivistelmä
Pääomasijoitus voi olla kasvuhakuiselle yritykselle erittäin
arvokas tuki ja auttaa yritystä kasvamaan ja kansainvälistymään. Pääomasijoitus ei ole sopiva rahoitusmuoto kaikille yrityksille, mutta on merkittävässä roolissa (usein yhdistettynä muihin rahoitusinstrumentteihini) kaikista kasvuhakuisimpien yritysten rahoituksessa. Palveluliiketoiminta on
tärkeä ala pääomasijoittajille. Monet merkittävimmistä suomalaisiin yrityksiin tehdyistä pääomasijoituksista ovat kohdistuneet nimenomaan palveluintensiivisiin yrityksiin. Vaikka useimmat pääomasijoittajat pitävät palveluintensiivisiä
yrityksiä itselleen sopivina sijoituskohteina, toisilla pääomasijoittajilla on vankempi kokemus palveluintensiivisiin yrityksiin sijoittamisesta ja niiden kasvun ja kansainvälistymisen tukemisesta kuin toisilla. Sen vuoksi yrittäjän on oleellista valita pääomasijoittajansa huolella. Vaikka useimmilla yrityksillä palvelut muodostavat vähintäänkin oleellisen osan
liiketoimintamallissa, palveluliiketoiminnassa on ominaisuuksia, joilla on merkitystä pääomasijoitusten näkökulmasta. Näitä ovat mm. palveluiden immateriaalinen luonne, mikä saattaa hankaloittaa liikeidean toimivuuden osoittamista
ennen toiminnan varsinaista käynnistämistä. Myös liiketoiminnan skaalaaminen ja aineettoman omaisuuden suojaaminen ovat tärkeitä näkökulmia harkittaessa sijoituksia palveluintensiivisiin yrityksiin.
Rahoituksen saatavuus on olla usein merkittävä haaste nopeaan kansainväliseen kasvuun tähtäävillä palveluin-
tensiivisillä yrityksillä. Voidakseen saada pääomasijoituksia
ja hyötyä niistä, yrittäjien on tärkeä ymmärtää pääomasijoitusten luonne rahoitusinstrumenttina sekä sen sopivuus
ja houkuttelevuus omalle yritykselle, ja mikäli pääomasijoitus nähdään houkuttelevana, miten tehdä yrityksestä pääomasijoituskelpoinen. Sijoituskelpoisuus määritellään yleisesti ymmärrykseksi pääomasijoituksista ja sijoitusprosessista, halukkuudesta vastaanottaa pääomasijoitus ja sitoutua kehittämään yritystä pääomasijoittajien kanssa ja ennen
kaikkea että yritys täyttää pääomasijoittajien sijoituskohteilleen asettamat vaatimukset. Valistunut yrittäjä voi tehdä paljon parantaakseen yrityksensä edellytyksiä houkutella pääomasijoituksia sekä kehittäen yrityksen pääomasijoituskelpoiseksi että toteuttamalla sijoitusprosessin valmistelun ammattitaitoisesti. Tekesin näkökulmasta asiakasyritysten edellytysten parantaminen pääomasijoitusten hankinnassa kasvun rahoittamiseksi voi parantaa Tekes-rahoituksen vaikuttavuutta. Keskeisenä toimijana alkavan vaiheen kasvuyritysten
verkostossa Tekesillä on edellytyksiä parantaa asiakasyritysten näkyvyyttä ja niitä koskevan tiedon laatua parantaen asiakasyritysten mahdollisuuksia tulla identifioiduiksi houkuttelevina sijoituskohteina. Tekes voi myös omalla rahoitustoiminnallaan tuottaa positiivisia sertifiointivaikutuksia ja tukea
asiakasyrityksiä kehittämällä pitkäjänteistä verkostoitumista
ja yhteistyötä pääomasijoittajien kanssa.
5
1
Introduction
This brief background paper reviews venture capital activity in
service businesses with a particular focus on Finnish companies and opportunities they represent. In addition, the paper
reviews what is known about raising VC finance with a particular focus on service businesses. In so doing, this paper seeks
to support the Serve - Pioneers of Service Business 2006-2013
programme of Tekes, the Finnish Funding Agency for Technology and Innovation as well as the participating companies of
the Serve programme to improve their opportunities to raise
venture capital finance if and when needed to support their
growth and internationalisation.
Before getting to statistics and examples of venture capital and buyout investments in service businesses, it is worth
asking: what is essentially specific in service businesses from
the VC perspective? Many would have a short answer: not very
much. In essence, venture capital and private equity is about
investing in promising companies expected to grow substantially in value during the next few years supported by the investment and related value adding activities of the investors.1
Such opportunities appear plentiful among service businesses as evidenced in statistics and examples of service industry
shown in the next section of the report. Furthermore, although
pure service companies already form a significant proportion
of companies funded by venture capital and private equity investors, the role of service business is even more pronounced
when recognizing that a very large share of product companies also have an important service components in their offerings. For instance in software, hybrid business models combining products and services are common place. 2
Although there is nothing in services that would make
service businesses incompatible with venture capital and private equity investing, there are some characteristics in service
businesses that are relevant from business building and investment perspectives.3 On the positive side from investor perspective in service businesses is the continuing cash flows in many
service businesses. Rather than selling a one off device, services
are oftentimes such that once customers are attracted to use
1
2
3
them, there will be a continuous revenue flow from the use of
the service (e.g. subscription based services). Service companies also sometimes benefit from a lower technology risk compared to pure technology ventures (especially compared to life
science ventures). Furthermore, capital expenditures are often
lower in the beginning than in technology product companies
– the biggest finance need is often experienced in growth and
expansion stage.
The more challenging characters of many service businesses from VC perspective include the sometimes challenging
protection of the intellectual property, difficulty of the proof of
concept before the start of the actual business operations, and
challenges in rapid international scaling of the business.4 These
challenges are not unique to service businesses, but are still important considerations. Regarding the protection of intellectual property, service concepts can rarely be patented and are often quite easy to coy and imitate. 5 Therefore, the sustainability
of the competitive advantage is an important question.
For service entrepreneurs, venture capital represents
one source of capital, which is particularly relevant for ventures seeking to grow and internationalise rapidly. Experienced
VCs can often provide valuable support for the management
teams of such ventures. VCs usually have experience from a
large number of ventures grown from ideas to successful ventures and can facilitate entrepreneurs in managing growth and
internationalisation. In service companies scale is sometimes
achieved through mergers and acquisitions and experienced
VCs are often in a good position to facilitate such processes.
The rest of this paper is structured as follows. Section 2
provides an overview of the role of service businesses as a target for VC investments. In addition, the section introduces examples of VC investments in Finnish service businesses as well
as active VC investors in Finnish and European service businesses. Section 3 reviews what is known about raising VC in general and for service businesses in particular. Section 4 concludes
and provides recommendations.
For an overview of venture capital and private equity in the Finnish context see www.fvca.fi. For a guideline for Finnish entrepreneurs written in Finnish, see
“Pääomasijoitus - avain yrityksen kasvuun” by PricewaterhouseCoopers and the Finnish Venture Capital and Private Equity Association (PricewaterhouseCoopers and Suomen pääomasijoitusyhdistys ry 2006).
For a very useful analysis of the business models combining products and services in software, see Cusumano (2004).
Concerning relevant literature comparing service businesses with other businesses, see also e.g., Lay et al. (2009).
2
Venture Capital Investments in Service Businesses
2.1 Service businesses as targets for venture
capital investments
Service businesses are hard to distinguish accurately in any
industry statistics. This is because a large share of companies
has service components in their offerings. Even so, it is clear
that even narrowly defined service businesses are an important and attractive segment for venture capital and private
equity investors. For instance in Finland in 2008, business and
industrial services were the most important investment sec-
tor receiving 235 million Euros worth of investments in 27
separate investments (Table 1). In total, all the distinct service sectors (consumer services, business and industrial services, and financial services) received 244.3 million Euros (34% of
total) of which 11.2 million Euros went into 16 venture capital
deals and 233.1 million Euros in 21 buyout deals.
Table 1 Venture and Buyout Deals Made to Finnish Companies by Industry Sectors in 2008 (Market) 6
Industry sector
Venture
Deals
Buyout
Deals
All Private
Equity
Venture
Deals
Buyout
Deals
All Private
Equity
M€
M€
M€
Nbr
Nbr
Nbr
Business and industrial services
8.0
227.2
235.2
10
17
27
Consumer services: other
3.2
5.9
9.1
6
4
10
Financial services
0.0
0.0
0.0
0
0
0
Services total
11.2
233.1
244.3
16
21
37
Services of total (%)
9%
39 %
34 %
5%
19 %
8%
Agriculture
0.0
0.2
0.2
0
1
1
16.2
110.0
126.2
53
41
94
2.4
12.9
15.3
11
5
16
Communications
16.6
39.4
56.0
37
6
43
Computer and consumer electronics
45.6
34.5
80.1
118
14
132
Construction
1.5
14.3
15.8
1
5
6
Consumer goods and retail
2.3
83.0
85.2
12
7
19
Business and industrial products
Chemicals and materials
Energy and environment
9.0
11.1
20.0
23
3
26
24.3
61.5
85.8
59
10
69
Real estate
0.0
0.3
0.3
0
1
1
Transportation
0.5
9.8
10.3
4
4
8
Life sciences
Unknown
1.5
11.2
12.7
1
1
2
Non-services total
117.9
366.9
484.7
314
92
406
Total
129.0
600.0
729.0
330
113
443
4
5
6
Toivonen et al. (2009) examine the internationalization of knowledge-intensive business services and note that convincing of external equity investors
about the scalability of the business is often difficult. They emphasize the importance of clear service concept and productization of the services to concretize return expectations and convince investors.
Concerning formal and informal approaches for protecting of intellectual property in service businesses, see e.g. a guide book for Finnish entrepreneurs
written in Finnish by Päällysaho and Kuusela (2006).
Source: EVCA Annual Book 2009.
7
When examining briefly how investments in Finnish service
companies compare with investments in service companies
in Sweden, UK, and whole Europe, we can see that in Finland
service companies have received a proportionally very high
share of investments (Table 2). This is particularly evident in
buyout investments. In VC investments service companies
received approximately one tenth of investments.
Table 2 Venture and Buyout Investments Made in
Finnish, Swedish, UK and European Companies in
2008 (Market) 7
Services of total (%)
Europe
Venture
Deals
Buyout
Deals
All Private
Equity
%
%
%
11 %
21 %
20 %
Finland
9%
38 %
32 %
Sweden
9%
11 %
10 %
11 %
29 %
26 %
United Kingdom
As noted, any statistics identifying service companies
as a category necessarily show only a tip of the iceberg
of service business. Although there are many pure service
companies, a very large share of “product” companies do also have a smaller or larger service component in their business model. For instance in software, service-based business models (and product-service hybrids) are very common and many product companies also transform to service companies as their products age. 8 In Finland, the latest software industry survey found that the Finnish software industry is dominated by services with an average 41%
of revenue coming from service oriented development and
deployment activities. 9 Also new business models, like Software as a Service were found to be emerging, but currently
accounted for only a small share of the industry. In general,
because of the growth of online services and e-business has
resulted in firms operating in other industries, such as media, retailing, and various services, to expand into internetbased offerings, it was found difficult to distinguish softwa-
7
8
9
10 8
re industry from other service oriented industries when customers buy (online) services in which the role of software
may not be very visible to the end user. Such online service
companies are common VC investment targets.
2.2 Examples of Venture Capital Investments
in Service Companies
As mentioned above, service-intensive companies feature
prominently in the portfolios of venture capital and private
equity investors. Some of the biggest and most successful
VC investments in Finland have been service companies.10
One of the biggest VC rounds in Finnish companies has been
made in Digia (See a box on the right side). Some prominent
examples of recent VC and business angel investments in
service businesses include Sulake www.sulake.com, a continuously rapid growing online services venture with substantial VC backing from 3i www.3i.com and Benchmark Capital
www.benchmark.com (see a box on the right), Blyk (www.
blyk.com) and Fruugo www.fruugo.com, very ambitious recently founded ventures funded by substantial amounts
of domestic and foreign angel and VC funding, and Dopplr
www.dopplr.com, a recently exited angel financed venture. Most recently, Footbalance Ltd www.footbalance.
com, a Finnish developer of a unique custom insole product and service concept, received probably the biggest ever A round VC investment in Finland, Eur 7 million from Scope
www.scope.se, a Swedish private equity company.
When assessing common characteristics in service
businesses funded by VCs, many VC-backed early stage service ventures are online services in which a strong technology platform enables cost effective service provision and international scaling of the business as well as the protection
of the competitive advantage. However, the challenges in
this type of ventures appear to be the difficulty of predicting beforehand whether the service will be adopted or not
in international, very competitive and unpredictable markets for online services. Furthermore, few Finland-based VCs
have significant experience in investing and exiting success-
Source: EVCA Annual Book 2009.
For a good analysis of the role services in software business, see Cusumano (2004).
See the national software industry survey by Rönkkö et al. (2009).
For instance, Iobox was the most successful VC exit in Finland if not counting MySQL.
fully such ventures. Therefore, many of the biggest ventures
in this category have obtained their funding from foreign
VCs with more experience on online services. Although foreign VCs invest in this kind of companies, such-cross-border
investments usually require an extremely strong and internationally experienced management team and or a credible
local VCs that can syndicate with the foreign VC.
When examining common characteristics in later stage
VC-backed service companies, they too can have technology innovations enabling cost effective service provision and
scaling (e.g. Pretax Oy http://pretax.net/eng/ bringing improving the use of information technology in accounting),
but they are also often based on consolidating many smaller
companies (so called “buy and build” strategy in which a VC
buys one of the leading companies in the industry to form
a platform and then supports this company in an acquisition programme to acquire smaller complementary players to grow the company). One successful Finnish example
would be Eltel Networks (see the box on the right). Many
later stage service company investments are also based on
service outsourcing trend such as health care companies
(Terveystalo www.terveystalo.com//In_English and Mehiläinen http://en.mehilainen.fi, industrial maintenance
companies (Eltel Networks, MaintPartner www.maintpartner.com/indexuk.asp?main=3, and accounting companies
(Pretax http://pretax.net/eng/ (see a box next page)).
Case Digia
Case Sulake Corporation
Digia www.digia.com was founded in 1997 to focus on
web design, the after which the focus was changed to
Symbian-related businesses in 1998. In 1999 Eqvitec Partners Oy and Sonera Corporation invested Eur 2.5 million into the company. In the second round in 2000, the original investors were joined by a syndicate of foreign investors
(Investor Ab, Intel Capital, Robertson Stephens, and General Electric Equity) investing a total of Eur 31.9 million. Digia
grew strongly, reached high profitability, and became one
of the world leading smartphone systems integrators serving handset and hardware manufacturers, and service providers globally. In 2004, Digia’s revenues grew 27% reaching €21.1 million, while the company’s operating profit totaled to €3.1 million. In 2005, Sysopen Plc and Digia Inc.
agreed on combining their operations and entered into a
combination agreement. In the transaction, a fund managed by Eqvitec Partners and other Digia owners sold their
shares in Digia. The combined entity was listed on stock exchange with the name SysOpen Digia Plc, which was later
shortened to Digia Plc.
Sulake Corporation www.sulake.com, an interactive entertainment company focused on online communities, and the
creator of the Habbo Hotel, was originally founded by Sampo
Karjalainen and Aapo Kyröla, two young guys, in 1999. Supported by a Finnish advertising agency Taivas and telecom
operator Elisa Communications, the original idea was further
developed to a multiplayer online game and eventually to a
virtual community launched in 2000. After the first success
in Finland, the community was soon launched also in other
countries including United Kingdom. The revenue started to
grow rapidly from Eur 2.3 million in 2002 to Eur 4.9 million
in 2003. In 2003 the company received Eur 4 million investment from 3i and Taivas Group. In 2005 Benchmark Capital
led a round of Eur 18 million with existing investors 3i and
Taivas participating in it. In July 2006 the company received
an additional Eur 6 million investment from a Japanese investor Movida Investment International as a part of new Japanese strategic cooperation with the Movida Group. Over the
years, the company has also received R&D finance from Tekes.
By the end of 2008, the company had become the largest virtual world for teenagers with 121 million Habbo characters
having been created around the world and with 11.5 million
unique visitors in December 2008. The annual revenue for
2008 reached Eur 50 million and profit Eur 4.8 million.
9
Case Pretax
Pretax Oy (www.pretax.net), a financial management and payroll processing services company was founded in 1986 by Asko and Tiina Schrey. In 2000 the company decided to pursue growth and got the first investment (Eur 3.4 million) from CapMan. By 2002 the company had approximately 400 employees and 8000 corporate customers and revenue Eur 18 million in 2001. At that point the company received an Eur 10 million investment from CapMan and 3i to support further growth in Finland and in the Nordic countries. Supported by
the investment, the company continued strong growth both organically as well as by acquiring many smaller
players and thereby consolidating the industry and becoming the industry leader. The company has also innovated in the use of technological solutions in providing financial services for customer companies cost efficiently. The revenue of Pretax had grown by 2009 to about Eur 101 million (over 30 times compared to the beginning of the growth period in 2000) with a current staff of 1400 employees in 7 countries. In the beginning
of 2010 CapMan exited the investment profitably by selling its minority stake to Sponsor Capital. The company plans to continue growth led by the CEO and the largest owner Asko Schrey potentially targeting to become a publicly listed company in the future.
Case Eltel Networks Oy.
Eltel Networks Oy (www.eltelnetworks.com) was founded when Fortum sold IVO Transmission Engineering
to a new company established by CapMan and the operative management in 2001 for Eur 32.5 million. Eltel focuses on the maintenance of infrastructure networks including mobile phone networks, electric transmission networks and others. The profitability of the company was increased significantly during the investment period e.g. by training service personnel to become multi-skilled experts capable of handling all tasks
related to network maintenance (i.e. one team managing both telecom and electric installations in mobile
phone base stations instead of having to send several teams to one service location) and improving the logistics management of service personnel using modern IT systems that make it possible for service teams to
start immediately in the service locations without having to first drive to office to get instructions. During the
investment period, the company was also grown by an active acquisition programme in then fragmented industry supported by the investor. Between 2001 and 2004, the Group’s net sales increased from €192.1 million
to €304.8 million, operating profit from €7.1 million to €22.2 million and the number of employees from 1,500
to approx. 2,300. CapMan sold Eltel Networks to Industri Kapital (IK) in 2004, after which IK continued the support of the internationalization of Eltel.
10
2.3 Examples Active VCs and Angels in Service Industries
In Finland, there are currently almost 40 venture capital and
private equity firms as full members of the Finnish Venture
Capital Association. Of these, more than 30 lists services explicitly among their target industries.11 Also some of those
who have not listed services among their target industries
have invested in service-intensive companies. Among VCs ac-
tive in investing in service businesses, some focus their investments in early stage ventures (e.g. Seed Fund Vera), some in
buyouts and later stage companies, and some invest in many
stages (e.g. CapMan). In Table 2, some examples of VCs active
in service companies are provided.
Table 3 Examples of Active VCs and their investments in Finnish Service Companies
Investor
Examples of service investments
CapMan Oyj
www.capman.com, a Nordic private equity
house managing €3.5 billion in assets and investing in various stages including buyout (CapMan
Buyout) and growth (CapMan Technology)
Growth stage (CapMan Technology): Exidio Oy www.exidio.com, provider of a
software as a service solutions supporting the treasury activities of large corporations, Foreca Oy www.foreca.com, weather services, Symbio S.a.r.l (Flander Oy) www.symbio.com, outsourced software engineering and R&D cocreation services, Tieturi Oy www.tieturi.fi, IT training. Buyout stage (CapMan
Buyout): MaintPartner Oy www.maintpartner.com, industrial maintenance
and operations services), Pretax Oy www.pretax.net, accounting company
chain, Tokmanni Oy www.tokmanni.fi, a discount store chain.
Canelco Capital
www.canelcocapital.fi, a Finnish VC firm that
specializing in company acquisitions and other
ownership arrangements of small- and mediumsized companies.
Arffman Consulting www.arfcon.fi, education services,
Blancco www.blancco.com/en/, data erasure products and services, Call
Waves www.callwaves.fi/call center services, Makuuni www.makuuni.fi a
video rental chain, Movia Group www.movia.fi a driving school,
Saima www.saima.fi, a HR management specialist, SSG www.sahala.fi, industrial life cycle and engineering workshop services.
Eqvitec Partners www.eqvitec.fi, a Nordic technology oriented private equity firm advising
funds with a total capital base of over €500 million
eBuilder www.ebuilder.com, business processes delivered in a SaaS model, Forte Netservices Oy www.fortenetservices.com, Liaison Technologies Inc.
www.liaison.com, global business-to-business integration services
Inventure www.inventure.fi, a VC company
managing EUR 53 million of funds
Protie Oy www.protie.fi/en, ICT services; Whitevector Oy, www.whitevector.fi,
web based social media measurement and analysis
Midinvest Management
www.midinvest.fi/en/, a private equity investor managing funds with EUR 100 million in total capita
Buildercom Oy www.buildercom.fi, ASP-services for construction and real estate maintenance, Ecore Oy www.ecore.fi/inenglish.php, service development in energy industry, Kilosoft Oy www.kilosoft.fi/index.
php?page=101&lang=2, a supplier of demanding software development
project, Tampulping Oy www.tampulping.fi, solutions and services for stock
preparation in paper industry
11 To identify Finnish VCs and their investment preferences, see the search engine of the Finnish Venture Capital Association (FVCA):
http://www.fvca.fi/?pageid=12&parent0=3
11
Nexit Ventures
www.nexitventures.com, a VC company venture capital firm focused on mobile & wireless innovation
Exidio Oy www.exidio.com, provider of a software as a service solutions supporting the treasury activities of large corporations,
Futuremark Oy www.futuremark.com, PC and smart phone benchmark products and value-added services
Nordia management
www.nordiamanagement.fi, a Finnish VC focused on service companies (particularly travel)
Hotel Luostotunturi www.luostotunturi.com, Hotel Pyhätunturi
www.hotellipyhatunturi.fi, Hotel Mesikämmen www.hotellimesikammen.fi,
Kalajoen Kylpylähotelli Sani www.spahotelsani.fi, Kristina Cruises
www.kristinacruises.com,a cruise company, Kultaranta Resort
www.kultarantagolf.fi, Levi Magic, Muumimaailma www.muumimaailma.fi,
Savonlinnan Seurahuone www.savonlinnanseurahuone.fi, Tietotalo Infocenter
www.tietotalo.fi, an IT service provider, Yyterin Kylpylähotelli
www.yyterinkylpylahotelli.fi
Veraventure Oy / Seed Fund Vera
www.veraventure.fi, a government owned
early-stage VC firm
Fleet Innovation (Icet Oy) www.fleetinnovation.fi, company fleet management services, Genolyze Oy www.genolyze.com information technology
services for research and development in biology and pharmaceutics, Histola Research Oy www.histola.com, health-safety-environment services, Icareus
Media Services Oy www.icareus.com interactive cross-media content and
services, M-Brain Oy www.m-brain.com, business intelligence services, Miradore Oy www.miradore.com an IT service provider, Nervogrid Oy
www.nervogrid.com an IT service provider, Pharmatest Services Oy
www.pharmatest.fi, a preclinical contract research organisation, Talentor
Group Oy www.talentor.com, an international human resource solutions provider, Telespro Finland Oy www.telespro.fi,products and services for emergency care, rescue services and hospitals, TripSay Ltd (Vailoma Ltd)
www.tripsay.com, a social network of passionate travelers, Whitevector Oy,
www.whitevector.fi, web based social media measurement and analysis
Sentica Partners
http://www.sentica.fi/index.php?id=5, a private
equity company focusing on acquiring and developing Finnish small and mid-size companies
managing funds worth of EUR 185 million
Arme Oy www.arme.fi/en, industrial insulation services and related scaffolding services, AtBusiness Oy www.atbusiness.com, a supplier and a specialist
for integral, customer-based solutions, customer relationship management
and Business Intelligence, Corbel Oy www.corbel.fi, Real-estate investment
management services, Descom Oy www.descom.fi, IBM technology based
IT services and solutions provider, Helsingin Ensihoito- ja sairaankuljetus Oy
www.hes.fi, Ambulance services
In addition to Finland-based VCs, there are also many
prominent foreign VCs that have made investments in Finnish service ventures. Examples during the past few years
include e.g. Accel Partners www.accel.com (invested in
Comeks), Benchmark Capital www.benchmarkcapital.com
12
(invested in Sulake www.sulake.com and Igglo), and Sofinnova Partners www.sofinnova.fr (invested in Blyk Services
Oy www.blyk.com), as well as Scope www.scope.se, which
invested in Footbalance oy www.footbalance.com.
3
Attracting Venture Capital Investments in Service Businesses
Before starting raising venture capital, there is some homework for entrepreneurs to be done first to understand venture capital and whether it is a relevant and attractive financing alternative in a particular situation, and secondly, how to
become investment ready and proceed smartly in the fundraising process. 12
combined with typical provisions in the shareholder agreement that provide great rewards for success but punish severely in terms of ownership dilution if the goals are not met.
A VC investment will also lead to a need for an exit for VCs,
which is quite often a trade sale exit to another company (another commonly very attractive exit route, initial public offerings (IPOs), has been rarely available during the recent years).
3.1 Is venture capital the right option for you?
3.2 How to become investment ready?
An important thing to consider before starting venture capital fundraising process is whether venture capital is the best
financing solution for the company at the moment. Venture
capital is just one form of finance and normally suitable only for a small minority of the most growth-oriented ventures
requiring relatively large (often multi million) equity investments. The type of growth opportunities VCs are often seeking is to increase the value of the company to ten times the
original in some five to seven years. Few ventures have realistic chances of achieving such ambitions and most of those
who do still fail to achieve them. However, if the growth ambitions are high, goals realistic, and there are no other sufficient
sources of finance, then venture capital may be a realistic and
very attractive option. Then another question is whether the
entrepreneur is willing to accept VC understanding that it often means a significant loss of control and personal freedom
when external financial investors are taken onboard. The aggressive growth goals set for VC backed companies usually require rapid development and professionalisation of the
organisation and may in many cases also lead to changes in
the positions of the original founders. Very often the management teams of VC backed growth companies will be strengthened during the investment period. In any case, the years in a
VC backed firm will be intensive given the commonly agreed
aggressive growth goals and monitoring by external investors
There are three requirements for being investment ready: the
entrepreneur needs to be willing to seek equity finance, he or
she needs to be able to present the investment opportunity in
a clear and convincing manner for investors, and the business
has to meet the requirements of external investors for an attractive investment opportunity. The willingness part was already discussed in the previous section. Regarding the presentation issue, it refers to both written and oral communication and presentation needed to attract and convince investors. Business plan plays a role in that communication, but often only in later stages of the process when the investors have
already been attracted to spend enough time to read a full
blown business plan. Many investors do not pay much attention to long business plan documents in any stage because
such documents are likely to become obsolete fairly quickly in
dynamic startup environments. 14 However, although long detailed plans do not often play a big role as documents, planning is of course important – combined with the flexibility to
quickly change plans when original plans do not work.
Before getting VCs to read business plans, other forms
of documentation and communication are very important.
One is a brief executive summary document to be used as
a “teaser” to get VCs interested. Also verbal communication
such as well rehearsed “elevator pitch” (a quick few minute
12 For relevant litertature, see e.g. Pearce & Barnes (2006), Arundale (2007), Berkery (2007), Zott and Huy (2007), Hallen and Eisenhardt (2008). Some useful readings
for entrepreneurs are listed in the Appendix 2 of this background paper.
13 Before raising VC it is obviously useful to review the capital needs and the availability of other types of equity and quasi equity sources of capital which may be
“cheaper” sources of capital than venture capital. For a recent review of available services in Finland, see Ahokas et al. (2009). Quite often, VC finance is complemented with other sources of finance including public R&D finance.
14 The importance of business plans in venture capital decision making has been debated during the past few years. Recent research has shown that VCs tend to
get most of the information through other channels than the formal business plan documents (Kirsch et al. 2009). Despite of that, entrepreneurs can rarely afford to ignore preparation of a updated business plan when preparing for VC fundraising.
13
presentation) and more complete investment presentations
play big role in VC fundraising. In addition to these documents, a well thought financial model of cashflows and
funding needs will play an important role both in the fundraising process and in managing the company thereafter.
Regarding investability, VCs are particularly interested
in (a) the size of the market opportunity, and (b) the capability of the venture to exploit that opportunity. VCs usually
want to make fairly large investments (usually millions of Euros, rarely less) to make it possible for the investment returns
to cover their expenses and time (value adding VCs cannot
spread their time in very many ventures; usually much less
than ten per partner). Therefore, the addressable market opportunity needs to be sufficiently large to enable value creation. For any major opportunity, there will eventually be
tough competition. Therefore investors pay considerable attention to the background and experience of the founders
of a venture to gauge whether the team has what it takes to
compete successfully.15 VCs understanding the risks involved
in ambitious growth ventures require very strong team complementing each other and having experience from developing business in similar sectors. Between a good idea and
a strong team VCs often prioritize the team because a strong
team can fix problems in the business idea whereas a bad
team can easily blunder even the best business opportunity. At the same time, there needs to be a clear and convincing strategy to attack the market and attain a sustainable position in the market. The business model needs to be well
thought so that there is a clear and sustainable competitive
advantage that can be protected. There needs to be a product or service which can be developed sufficiently rapidly
within the time window of the investors and for which customers are willing to pay enough to make the venture profitable in a reasonable time horizon. The venture has to have
a clear path for scaling the business and be able to grow
to profitability within a reasonable period of time. For service businesses, clear conceptualisation and productisation of
the service are important to make the international scalability realistic. There needs to be also consideration for plan Bs,
which are very often needed. Furthermore, there also needs
to be alternative exit routes for investors (most often a trade
sales exit to a larger company).
3.3 How to raise venture capital?
Once you know you want to raise VC and have done what you
can for your company to be ready to access it, the next set of
questions relates to how to actually proceed in the fundraising
process. One important question is which investors to contact?
Although VCs are selective, it pays off to be also selective and
knowledgeable as an entrepreneur. VC is not just money, but
an investment relationship that will last many years. VCs are different and it matters who will be in the board of your company. VCs have different backgrounds, experience from different
fields and markets, and also different resources e.g. in terms of
networks. In the end, the chemistry with the key individual representing the VC company in the board of your company is also very important. From the perspective of raising follow-on finance in the future, the capability of the existing investors to
join future investment rounds is important from the credibility perspective (potential new investors will be worried if the
existing investors will not join the new round even if it is because of capacity constraints of the VCs). Because of these reasons, it is often quite valuable to review the backgrounds and
track records of potential VCs before approaching them. Asking entrepreneurs backed by the potential VCs might not be
a bad idea, either. It is also very important to remember, that
the finance of growth companies is increasingly international
and for internationalising ventures foreign VCs operating in the
target internationalising market can be very helpful.16 Many of
the biggest VC rounds in Finnish service ventures have been
made by foreign VCs. Typically, foreign VCs make their investments in collaboration (in a syndicate) with local VCs. 17
15 In a detailed analysis how entrepreneurs attract resources, Zott and Huy (2007) point out the importance of skillful symbolic management by entrepreneurs i.e.
entrepreneurs convey personal credibility, professional organizing, organizational achievement, and quality of stakeholder relationships skillfully and frequently.
16 Mäkelä and Maula (2005)
17 Mäkelä and Maula (2008)
14
Once you know which VCs you want to get on board, it
is important to consider how you can maximize the chances of being successful in that. One important consideration
is how to contact these VCs? VCs are usually very small organisations consisting of partners and a limited number of
other staff. In addition to searching for new investment opportunities, established VCs have to spend a large share of
their time in managing existing investments and many other
aspects of the VC business. At the same time, prominent VCs
receive hundreds or even thousands of pitches and business
plans per year and have to be very selective in which of them
they will focus their limited available time. This means that
an investment opportunity that does not immediately seem
to belong to the small category of the most promising opportunities is quickly discarded. Therefore, a well prepared,
qualified access to the selected VC firm(s) is important. Contacts and experience are very important in this process and
some of it can possibly be borrowed. In the luckiest case the
founders of the venture know personally senior partners of
the most attractive VCs. This is often not the case. After creating a short list of the most preferred VCs, it is useful to review ways to access each of those VCs based on personal
contacts in the VC firm, contacts in the portfolio companies
of the focal VC, industry contacts, professional advisors or intermediaries. Cold calling is usually the option with the lowest chances of success (or at least requiring most luck). Even
with some existing contacts, it is useful to generate more or
upgrade them e.g. by reviewing the most successful portfolio companies in the select VCs portfolios and meeting top
management of these companies who may often be willing to meet and help their peers. To have the contacts when
needed, it can be quite valuable to get familiar with potential VCs already before the there is a need for investment. 18
When contacting the selected VCs, the information delivered should be a concise and convincing “teaser document” facilitating quick understanding of the nature of the
investment opportunity. As noted earlier, at this point the
key is to get VCs interested and to invest time to learn more
about the venture. Full business plan and budget will usually be required later in the process. If things go well, after
this initial engagement the process goes as follows19 : VC reviews the opportunity and if there is fit, invites the entrepreneurs to give a presentation to one or more partners and associates. If there is a consensus to proceed, the next phase is
a preliminary due diligence involving various kinds of background checks, external research, reference calls, and additional presentations. At this point also the terms of the investment will be discussed. If the VC decides to go ahead
and there is a signed term sheet, the next phase will be the
completion of the investment including final due diligence
(detailed analysis and checks on team, intellectual property, financials, and legal issues). Finally, the deal is closed and
term sheet is turned to a legally binding agreement.
18 In a detailed study of how entrepreneurs successfully raise finance from VCs, Hallen and Eisenhardt (2008) identify four catalyzing strategies: (1) entrepreneurs
“casually date” potential investors in advance (not approaching potential investors only when an investment is needed), (2) synchronize pursuing investments
with proofpoints of progress (not timing around resource needs), (3) actively create competition by crafting credible alternatives (not passively waiting for potential investors to commit), and (4) focus on realistic potential investors by scrutinizing interest (not taking professed interest at face value).
19 This process description is largely based on Pearce and Barnes (2006), who provides detailed and practical information on the fundraising process and how to
prepare for it for those entrepreneurs needing more detailed information.
15
4
Conclusions and Recommendations
4.1 Conclusions
As has become clear in the preceding review, venture capital is not a suitable form of finance for all ventures, but can
be very valuable for growth oriented ventures and help them
grow and internationalise. It has also become clear that service business is an important sector for VC and private equity
investors. Some of the biggest and most prominent Finnish
VC investments have been made specifically in service businesses. Although most VCs consider service-intensive ventures as potential investment targets, some have more experience in investing in and supporting service-intensive ventures grow and internationalise than others. Therefore, it is important to select carefully which investors to approach. Although most companies have at least a service component
in their business mode, service business has some specific issues that have relevance from the VC investment perspective.
These include the immaterial nature of services which make
can make it harder to prove the concept before the investment and full blown operations. Also the scaling of business
and the protection of the intellectual property are important
issues to consider in service business (although they are important challenges also in other types of businesses). In the
following recommendations, we summarize key points for entrepreneurs in service-intensive ventures considering venture
capital finance.
4.2 Recommendations
4.2.1 Recommendations for service businesses
For service-intensive new ventures, access to risk capital may
often be an important challenge when seeking to grow rapidly and expand operations internationally. In order to access
and benefit from venture capital, it is important to understand
venture capital as a form of finance and whether or not it is relevant and attractive choice, and if yes, be investment ready.
This investment readiness refers to understanding of venture
capital and the process of raising it and working with VCs, willingness to seek and accept external equity finance and related commitments, and investability of the business i.e. ensure
the venture fulfills the requirements of external investors as an
investment opportunity. 20
Ensure VC is the right option for you. In practice, when
considering raising venture capital, it is important to assess
carefully the financing needs and the appropriateness of
venture capital as a financing solution for the company in a
particular situation. VC can be a valuable finance option, but
raising it takes time and effort and requires significant commitments to new external shareholders. Once there is sufficient understanding of venture capital as a financing solution for the company in the particular situation, and willingness to accept the tradeoffs related to venture capital finance (e.g. some loss of control to VCs etc.), the next step is
to ensure the venture is investment ready.
Become investment ready. This means both grooming
the venture to be attractive target for investors (ensuring
the venture meets the requirements of external investors
for an attractive investment opportunity) and preparing and
rehearsing the written and oral presentation of the company. Regarding the investability, there usually needs to be a
clear and credible path how the value of the company can
be increased tenfold within the next five to seven years supported by the currently considered and future investment
rounds. VCs understanding the risks involved in such ambitious plans require very strong team complementing each
other and having experience from developing business in
similar sectors. The addressable market opportunity needs
to be sufficiently large to enable value creation. At the same
time, there needs to be a clear and convincing strategy to attack that market and attain a sustainable position in the market. There needs to be a product or service which can be developed sufficiently rapidly within the time window of the
20 Mason and Harrison (2001) argue that the concept of investment readiness has three strands: the entrepreneurs willingness to seek equity finance, presentation, and investability (i.e. does the business meet the requirements of external investors?)
16
investors and for which customers are willing to pay enough
to make the venture profitable in the reasonable time horizon. For service companies, the international scalability is a
concern and therefore it is important to conceptualize and
productize the service well. There needs to be also consideration for plan Bs, which are very often needed as well as an
exit route for investors, which is most often a trade sales exit to a larger company.
Run the VC raising process smartly. To run the venture
capital fundraising process successfully, it is useful to start
establish contacts already when the finance is not yet acutely needed, raise the finance when the company can show
evidence of progress rather than when it is running out of
cash. When starting the actual VC raising project, it is useful to try to create competition by developing credible alternatives and to focus on VCs that are realistic potential investors. Therefore, it is useful to first identify the most suitable venture capital investors and create a shortlist of them.
Thereafter, it is valuable to identify and nurture direct and indirect contacts to the partners of those VCs to have a qualified access to those VCs. Cold calls rarely work with busy
VCs who needs to screen hundreds of investment proposals to find a handful of most attractive ones. It is also important to have a concise and convincing teaser document and
a well rehearsed pitch to win the interest of VCs and to get
a chance to present the venture in more detail. If successful in all this, there will be more presentations, due diligence
evaluation by the VC, negotiations about the terms of investment, and if everything goes well, hectic five to seven years
of business development supported by the VCs to build the
venture to be the winner it was planned to become in the
original plans. As can be realized from the process description, the process will take some time, so it is important to
start early enough to not run out of cash and to end up in a
desperate situation before closing the investment (it is important to have some bargaining power). It is also important
to view the fundraising process as a project and be ready to
quit it, resort to plan B, and strengthen the commercial credentials if the process does not yield results in reasonable
time (to not ruin the reputation of the company in the eyes
of the investors). Sometimes using a professional corporate
finance company can be a smart option to facilitate the fundraising process.
4.2.2 Recommendations for Tekes and the Serve programme
From policy perspective, development of the supply of risk
capital e.g. through government venture capital programmes
is one common policy approach also used in Finland. However, interventions in the supply of capital is just a partial solution and often insufficient to address the problems in the access to finance. There are also often challenges in the willingness and capability of new ventures to raise venture capital
and benefit from it. Policy measures targeted to address this
demand-side “investment readiness” 21 problem are also common in Europe and elsewhere.22 There are also related activities Tekes could potentially further develop and facilitate in its
programmes and other operations.
Facilitate investment readiness of customer companies.
Given that a large proportion of Finnish ventures that are attractive to VCs are clients of Tekes, and the goal of Tekes is to
improve the success of its clients, a natural avenue for improving the effectiveness of the finance is to improve the capability of the client companies to access and benefit from
finance needed in the next steps of growth. Although Tekes
has already been involved or responsible for many investment readiness programmes such as TULI – From research to
business programme, and the recently launched Vigo business accelerator programmes, there are still opportunities to
improve the investment readiness of the customer companies of Tekes (especially concerning information availability
of complementary financing sources such as VC and how to
access them).
Add visibility and credibility of customer companies in the
eyes of domestic and foreign venture capital investors. This
could for instance include improved availability of informa-
21 Mason and Harrison (2001) argue that the concept of investment readiness has three strands: the entrepreneurs willingness to seek equity finance, presentation, and investability (i.e. does the business meet the requirements of external investors?)
22 For a review of 124 investment readiness around the world and resulting recommendations, see Toschi and Murray (2009).
17
tion about the customer companies for investors (e.g. automatic “opt-in” listing23 of customer companies in databases
used by investors).24 The programmes could also more actively encourage participant companies to participate in international VC investor conferences and pitching events.25
The easier it is for investors to identify ventures, the higher the chances they will find and consider those as investment opportunities and eventually invest in them. In addition to direct financial support, government grants can also
have a certifying role in the eyes of private investors.26 To improve this certification role, the grants should signal that the
recipient companies are promising and well managed. The
recently launched Tekes Young Innovative Companies (YIC)
programme with investments selected in collaboration with
a board consisting of private investors is a good step to this
direction. In addition, domestic and foreign investors should
be able to identify these companies. Therefore, information
availability and networking with investors is important for
achieving these benefits.
Foster collaboration with venture capital investors. For
many Tekes clients, the R&D funding received from Tekes
eventually needs to be complemented with growth finance
to commercially benefit from the research and development
activities. Private venture capital is an important source of
this growth finance. Given the central role of Tekes as a public financier of a large share of the most promising innovative ventures, it is important that Tekes is known and trusted
by venture capital investors a valuable and easy to collaborate with partner. To further strengthen this trusted position,
it can be valuable to nurture a long-term centralised venture
capital competence and knowledge center i.e. some individuals who are well networked in the VC community and can
facilitate collaboration with other parts and programmes of
Tekes with VCs.
23 “Opt in” would mean that Tekes would ask permission from customer companies for listing the Tekes investment/grant in relevant commercial databases e.g. in
the context other paperwork related to granting the the Tekes finance.
24 Such databases include e.g. VentureSource http://www.venturesource.com/ by DowJones, ZEPHYR http://www.zephyr.bvdep.com/ by Bureau Van Dijk,
VentureXpert http://www.venturexpert.com/ by ThomsonReuters and TechnopolisOnline http://www.technopolisonline.com.
25 Examples of such forums include the Nordic Venture Forum http://www.e-unlimited.com/events/view.aspx?events_pages_id=26, European Tech Tours
http://www.techtour.com/, and e.g. the MoneyTalks pitching events organized by TechnopolisOnline http://www.technopolisonline.com/.
26 For instance, Lerner (1999) found the U.S. Small Business Innovation Research programme to have important certification benefits for the award recipients in the
eyes of VCs.
18
5
References
Ahokas, M. 2009. Ohjelmistoyrityksen rahoitusopas.
http://www.ohjelmistoyrittajat.fi/files/kf_09/Kasvufoorumi%2009_eRahoitusopas.pdf.
Helsinki: Ohjelmistoyrittäjät ry ja Teknologiateollisuus ry 2009.
Arundale, K. 2007. Raising venture capital finance in Europe: a
practical guide for business owners, entrepreneurs and investors.
London, UK: Kogan Page Ltd, .
Berkery, D. 2007. Raising Venture Capital for the Serious Entrepreneur. McGraw Hill.
Cusumano, M.A. 2004. The business of software: what every
manager, programmer, and entrepreneur must know to thrive
and survive in good times and bad. New York, NY: Free Press.
Hallen, B.L., Eisenhardt, K.M. 2008. Catalyzing Strategies: How
Entrepreneurs Accelerate Inter-Organisational Relationship Formation to Secure Professional Investments. Working paper.
Kirsch, D., Goldfarb, B., Gera, A. 2009. Form or substance: the
role of business plans in venture capital decision making. Strategic Management Journal 30(5): 487-515.
Lay, G., Schroeter, M., Biege, S. 2009. Service-based business
concepts: A typology for business-to-business markets. European
Management Journal 27(6): 442-455.
Lerner, J. 1999. The government as venture capitalist: The longrun impact of the SBIR programme. Journal of Business 72(3):
285-318.
Mason, C.M., Harrison, R.T. 2001. ‘Investment readiness’: A critique of government proposals to increase the demand for venture capital. Regional Studies 35(7): 663-668.
Mäkelä, M.M., Maula, M.V.J. 2005. Cross-Border Venture Capital
and New Venture Internationalisation: An Isomorphism Perspective. Venture Capital: An International Journal of Entrepreneurial Finance 7(3): 227-257.
Mäkelä, M.M., Maula, M.V.J. 2008. Attracting Cross-Border Venture Capital: The Role of a Local Investor. Entrepreneurship and
Regional Development 20(3): 237-257.
Pearce, R., Barnes, S. 2006. Raising venture capital. John Wiley,
Chichester, West Sussex, England.
PricewaterhouseCoopers, Suomen pääomasijoitusyhdistys ry
2006. Pääomasijoitus - avain yrityksen kasvuun. http://www.
fvca.fi/UserFiles/fvca/File/julkaisut/FVCA_opas_2006.pdf.
Helsinki, Finland: PricewaterhouseCoopers and Suomen
pääomasijoitusyhdistys ry.
Päällysaho, S., Kuusisto, J. 2006. Osaamisen suojaaminen palveluja kehittävissä yrityksissä. www.tekes.fi/fi/document/43061/osaamisen_suojaaminen.pdf. Helsinki, Finland:
Tekes, the Finnish Funding Agency for Technology and Innovation.
Rönkkö, M., Ylitalo, J., Peltonen, J., Koivisto, N., Mutanen, O.-P., Autere, J., Valtakoski, A., Pentikäinen, P. 2009.
National Software Industry Survey.
Toivonen, M., Patala, I., Lith, P., Tuominen, T., Smedlund, A.
2009. Palvelujen kansainvälistymisen muodot ja polut – Selvitys
liike-elämän asiantuntijapalvelujen kansainvälistymisestä ja sen
merkityksestä yritysten kasvulle. Tekesin katsaus 265/2009 http://www.tekes.fi/fi/document/43701/palvelujen_kansainvalistyminen_pdf. Helsinki: Tekes.
Toschi, L., Murray, G.C. 2009. A cross-country review on investment readiness programmes: How can small and medium size
enterprises increase their attractiveness to equity investors? :
Zott, C., Huy, Q.N. 2007. How entrepreneurs use symbolic management to acquire resources. Administrative Science Quarterly 52(1): 70-105.
19
Appendices
Appendix 1
Some Useful Links
Associations and organisations
Finnish Venture Capital Association
European Venture Capital and Private Equity Association
The European Trade Association for Business Angels, Seed Funds,
and other Early Stage Market Players
Venture capital investment databases
Technopolis Online
VentureSource
VentureXpert
ZEPHYR
Website
www.fvca.fi
www.evca.eu
www.eban.org
www.technopolisonline.com
www.venturesource.com
www.venturexpert.com
www.zephyr.bvdep.com
Appendix 2
Some Useful Further Readings
Guides for business plan development
Mullins, J. W. 2003. The New Business Road Test:
What Entrepreneurs and Executives Should Do before Writing a Business Plan: London: Prentice Hall.
Mullins, J. W. & Komisar, R. 2009. Getting to Plan B:
Breaking through a Better Business Model. Boston, MA: Harvard Business Press.
Stutely, R. 2007. The Definitive Business Plan:
The Fast-Track to Intelligent Business Planning for Executives and Entrepreneurs. London, UK:
Financial Times Prentice Hall.
Timmons, J. A., Spinelli, S., & Zacharakis, A. 2004. Business Plans That Work:
A Guide for Small Business: McGraw-Hill.
Guides for raising venture capital
Ahokas, M. (Ed.). 2009. Ohjelmistoyrityksen Rahoitusopas. Helsinki:
Ohjelmistoyrittäjät ry ja Teknologiateollisuus ry 2009.
http://www.ohjelmistoyrittajat.fi/files/kf_09/Kasvufoorumi%2009_eRahoitusopas.pdf
Arundale, K. 2007. Raising Venture Capital Finance in Europe:
A Practical Guide for Business Owners, Entrepreneurs and Investors. London, UK: Kogan Page Ltd.
Berkery, D. 2007. Raising Venture Capital for the Serious Entrepreneur:
McGraw Hill.
Pearce, R. & Barnes, S. 2006. Raising Venture Capital:
John Wiley, Chichester, West Sussex, England.
PricewaterhouseCoopers & Suomen pääomasijoitusyhdistys ry. 2006. Pääomasijoitus - Avain Yrityksen Kasvuun. http://www.fvca.fi/UserFiles/fvca/File/julkaisut/FVCA_opas_2006.pdf,
PricewaterhouseCoopers and Suomen pääomasijoitusyhdistys ry, Helsinki, Finland.
20
Appendix 3
Biographical Information of Professor Markku Maula
Dr. Markku V. J. Maula is tenured Professor of Venture Capital at Institute of Strategy, Department of Industrial Engineering and
Management, Aalto University School of Science and Technology, Finland. Professor Maula’s research focuses on value creation
related issues in business strategy and corporate finance with a particular focus on venture capital and private equity, corporate
venturing, technology-based new firms, mergers and acquisitions, and innovation policy. He has received several international
awards (e.g. the Heizer award from the Academy of Management, Entrepreneurship Division) and has published actively in journals including Strategic Management Journal, Journal of Business Venturing, Entrepreneurship Theory & Practice, Strategic Entrepreneurship Journal, and Research Policy. Professor Maula is also a member of several boards and committees such as PEREP_
Analytics and the Research Committee of the Entrepreneurship Division of the Academy of Management. In addition to his research and teaching roles, he has acted as an advisor to firms and government agencies in issues related to venture capital, corporate venturing, and innovation policy in several countries. Additional information available at: http://www.tkk.fi/u/mmaula/
21
Huhtikuu 2010 | Mainostoimisto KPL Oy
Tekes – teknologian ja innovaatioiden
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Kyllikinportti 2, Länsi-Pasila, PL 69
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