Young innovative company funding, Tekes

1. Young Innovative Company
Funding accelerates the global
growth of the most promising
Finnish startup companies.
► The funding allows the startup to
develop its business comprehensively

2. What are we looking for?
RIGHT COMPANY RIGHT TIMING
Solution to an existing problem
Product or service has been
launched in the markets.
Top team
Talented people and a plan to
complement the team.
Ability and willingness to grow fast.
International competitiveness
Significant market potential.
Tested business model
Happy, paying customers.
Ability to attract
venture capital
DM1594273

3. 69 % operate in B2B markets.
What is a typical young innovative company like?
Credible innovative business
 Clear competitive advantage.
 Owns the relevant IPRs.
 Concrete growth plans for
internationalization.
Proven business and revenue model
 Turnover €430,000 on average (median
€220,000).
 Around 50 % of the companies already
operating abroad.
Company age on average 4 years
Seeks rapidly growing international
business
 Targets over €10 million revenue level
in 3-4 years.
Strong team
 Personnel on average 10.
 58 % have previous experience as
entrepreneurs.
 Management has strong competence in
international business.
Attractive investment target
 Equity investments €910,000 on average
(median €400,000).
 Around 40 % have foreign investors.
Source: Young innovative companies selected to the program
in 2012-2016 (at the time of phase 1 decision), updated 8/2016

4. Fast growth and competitiveness
in international markets.
Investing in international
sales and marketing.
Strenghtening the team
to enable faster growth.
Speeding up
the business’
global growth.
Acquiring external
funding for growth.
Developing growth strategy,
processes and organisation to
support scaling-up the
business.
Proving the sustainability
of the competitive
advantage.
Accelerating growth with
funding from public and
private sources.
1. phase
2. phase
3. phase
Grant €250,000
Grant €250,000
Loan €750,000
Funding for
young innovative
companies
Tekes funding 75 %, total € 1,25 M

5. Goals for each funding phase
Tekes sets goals for the company in its funding decision,
which, if realised, enable the company to move on to the
next phase of funding.
Goals are typically related to
 the development of turnover
 ability to get funding from other sources
 expanding into new markets.
A panel made up of investors
evaluate business potential
 During the first funding phase Tekes asks companies to present
their ideas to an evaluation panel made up of investors and
experts.
 The panel is typically scheduled to meet towards the end of the
first funding phase.

6. Young innovative companies
- funding criteria
Age and size of the company
• max 5 years from registration (Tekes application 3 months before),
• funding will end when the company has been registered for 8 years,
• classified as a small company. SME during the whole funding period.
Ownership
• committed management, the personnel have to own a significant share of the company,
• owners must be willing to share ownership with new investors,
• must operate independently and administer its own IP rights,
• the company should not have distributed profits and have not been formed through a merger.
Research and development activities
• invested at least 10 percent of all its business costs in research and development.

7. 1. phase
2. phase
3. phase
41 companies
30 companies
14 companies
Young innovative companies at
different funding stages (June 2016)
• Funding completed
(1M€) - 88 companies
• Funding cancelled –
122 companies
Total 295 companies

8. 21
31 31
47
31
39
55
31
0
10
20
30
40
50
60
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
2008 2009 2010 2011 2012 2013 2014 2015
YIC-funding (all phases)
R&D-funding (YIC-
companies)
New companies
Young innovative companies funding
2008-2015
Euros Companies

9. Young innovative companies prove their
ability to grow fast in international
markets.
DM1594273

10. They have gained international
venture capital investments.
DM1594273