FiBAN Monthly: Building an Attractive Angel Investment Landscape
June 03, 2021
On May 24, 2021, Finnish Venture Capital Association published news that the Finnish startups receive the most venture capital funding in Europe when the invested amount is examined in relation to the gross domestic product. This is a direct result of our active startup ecosystem, which together with the good early-stage investment activity helps to nurture startups capable of generating international growth and attracting international funding.
Needless to say, angel investors play a crucial role in this early-stage investment activity. If we have good early-stage investment opportunities, there will be capital in the earlier stages, and more startups to attract funding for the later stages.
Good investment opportunities require that there are good startups to invest in, investing is easy, and there is an opportunity to make attractive returns. These three areas are the main topics that FiBAN keeps on its agenda when it comes to developing the angel investment landscape. And there is still more what the policymakers can do to push forward the Finnish startup ecosystem, as the following examples show:
- Building world-class startups require world-class talent. However, the current rules of employing experts from abroad are more tailored to corporations than startups.
- IPO markets are behind e.g. Sweden, which hinders the growth financing and exit opportunities.
- While the legal framework to operate in is on a generally very good level, there are still areas with room for improvement:
- Only those limited liability companies that fill certain criteria can be established online, and for manual registration, the process is long (34 working days as we speak);
- Liquidation and bankruptcy of a company take time, and generally, the tax authorities only accept the losses as deductible after the liquidation is final.
- The interpretation of the financial market legislation is strict and hinders the creation of FinTech startups in Finland.
- Angel investments are subject to heavier taxation than the investments to the stock market via share savings account or the venture capital fund investments by institutional investors.
We keep the above-mentioned agenda on the table with the policymakers, authorities, and other organizations.Reima Linnanvirta, Chair of the Board, FiBAN
While FiBAN is not a lobbying organization, one of our tasks is to promote improving the angel investing landscape. For this purpose, we keep the above-mentioned agenda on the table with the policymakers, authorities, and other organizations. With the municipal elections coming up, we have invited representatives from all parliament parties to join our two FiBAN Morning Talks to discuss how the policymakers would improve the startup and angel investment ecosystems.
FiBAN Monthly is a blog series launched in October 2020. A new post will be shared each month, alternating between FiBAN Chair of the Board Reima Linnanvirta and Managing Director Amel Gaily. In case you missed Amel’s letter from May, you can read it here.
Chair of the Board, FiBAN