European Investment Fund and Tekes Venture Capital to launch 30M€ business angels fund in Finland
May 03, 2017
The European Investment Fund (EIF) and Tekes Venture Capital Ltd have launched the Finnish compartment of European Angels Fund (EAF Finland), which will support business angels’ financing activities to early stage companies through co-investments. The Fund will be advised by EIF and is part of the pan-European initiative European Angels Fund (EAF).
EAF Finland is a EUR 30 million co-investment fund, funding Business Angels wanting to invest into innovative early stage enterprises. The Fund will help to increase the investment capacity of approved business angels and other non-institutional investors investing in internationally oriented SMEs
The European Angels Fund establishes Co-investment framework agreements (CFAs) granting a predefined amount of equity for co-investments upfront to each Business Angel for future investments. All investment decisions will be taken by the Business Angels and their investments will be matched on a pari-passu basis, i.e. by the same amount by the European Angels Fund.
The volumes available in total under an individual CFA typically range between EUR 250k and EUR 5m. As of today, the programme has been launched in seven countries, reached a facility volume of c. EUR 320m and entered into agreements with more than 50 Business Angels for co-investment volumes of almost EUR 150m. As of today, Business Angels have drawn an amount of c. EUR 30m for co-investments in more than 200 SMEs. Once rolled-out, the initiative shall reach a portfolio of over 1,000 SMEs co-investments.
EIF Deputy Chief Executive, Roger Havenith said: “We are delighted to be partnering with Tekes Venture Capital in launching the EAF in Finland. Through this cooperation, business angels will be able to benefit from significant financial support for their investment activity while maintaining maximum freedom to operate. Through the European Angels Fund, business angels can draw on the expertise and network of the European Investment Fund. EIF is currently increasing its support for SMEs in Finland and looking to develop new types of funding sources which alongside our investment with Tekes, will play a role in further diversifying the Finnish equity and entrepreneurship ecosystem.”
Esko Raunio, Managing Director of Tekes Venture Capital Ltd, said: “The goal of the fund is to bring risk capital to the market but also bring the skills, experience and networks of the Finnish business angels to innovative and internationally scalable Finnish early stage companies. We have seen growing amounts of business angel investments as well as successful startups backed by business angels in recent years. It is beneficial for the whole entrepreneurial ecosystem to enhance the versatility of the early stage financing. We believe that the funding will be diversified across different industries, and also increase support to seed stage companies.”
- EAF Finland is a EUR 30 million co-investment fund
- Investments typically range between EUR 250k and EUR 5m
- EAF requires no fee but a carried interest: Profits shared 60:40, losses are split 50:50
- Requires 10 year exclusivity to join angel investments
- In EAF Finland 15% can be invested in foreign startups outside Finland
- The contract is done directly with an approved business angel, not with investment groups.
Experienced BAs are invited to apply via the EIF’s website at: www.eif.org/eaf.
About the EIF
The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe’s micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.
Juho Aminoff, j.aminoff(at)eif.org,
About Tekes Venture Capital
Tekes Venture Capital Ltd invests in early stage venture capital funds active in Finland. The purpose of the company is to develop Finland’s venture capital market. Tekes Venture Capital Ltd’s sole shareholder is the Republic of Finland and the ownership steering is the responsibility of
Tekes – the Finnish Funding Agency for Innovation.