The article is also available in Finnish – Lue suomeksi.

Majority of portfolio startups in need of more help from investors

The hard-to-predict market situation affects angel investors’ portfolio companies in various ways. “Over 60% of FiBAN’s angel investors are currently spending more time with their portfolio companies than usual, as some of the startups need more help,” says FiBAN’s Managing Director Amel Gaily.

However, 25.9% of the respondents say that their portfolio companies do not need any additional help. “Challenging times divide not only angel investors, but also startups,” Gaily adds.

Finding investment-ready startups has become a slowing factor for angel investing. As much as 45.3% of the respondents say that it’s difficult to find suitable startups to invest in. On the other hand, 20.8% of FiBAN’s angel investors see many potential investment opportunities.

General factors for investment readiness are that the startup’s business model must be easy to understand and that the startup has acquired early customers already. “Growth, scalability, and a well-functioning team are essential for me to get on board,” says angel investor and FiBAN board member Eljas Repo. 

The general investment sentiment has become weaker. “Shares have dropped in value, interests are making profits. The willingness for risk-taking has decreased. This shows how capital for startups and VC funds are raised,” Repo adds.

The general market situation affects the possibilities of exits

However, Repo is cautious about the likeliness of tenfold exits.

“There is a lot of hype in startup investing. One expects a tenfold exit, although in reality in many cases the value ​​of the investments drops to zero,” Repo reminds.

Angel investing is not only about finding the right company for the angel but also finding the right angel for the company. “At best, angels both invest and share their know-how for growth companies. In most cases, advice from more experienced people is useful. However, it is difficult to invest in something without understanding the business and if one is not able to recognize the paying customers. In the end, there is always funding available for quality startups,” Repo coincides.

Understanding the impact of angel investing relies heavily on data

  • The November member study was a general survey that mapped FiBAN’s members’ investment sentiment. 
  • 54 angel investors responded to the questionnaire.
  • In addition to smaller member studies, FiBAN annually conducts a study collecting and assessing the scope and the impact of angel investing. See the results of our previous annual study here. 
  • The investment figures for 2022 will be announced in the Spring of 2023.

More information on the questionnaire is available in this Google Drive folder. 
Do not share the link  – only use the material for editorial purposes.

More information

Amel Gaily, Managing Director, Finnish Business Angels Network
amel.gaily@fiban.org
Tel. +358 503 655 019

Eljas Repo, member of the FiBAN board, angel investor, entrepreneur
eljas.repo@repomedia.fi
Tel.  +358 403 424 661

Milja Inkeri Mäkelä, Communications Manager, Finnish Business Angels Network
milja.makela@fiban.org
Tel. +358 405 385 418