Startup survey results show that startups seek more than just funding from angels - networks and industry expertise are seen valuable.

Startups seek more than just funding from business angels – diversity, clearer instructions, and more thorough feedback are requested.

In June, FiBAN sent a startup survey which received answers from 90 startup entrepreneurs who have sought funding through the Finnish Business Angels Network.

80% of the respondents stated that, in addition to seeking funding, they also look for industry expertise, networks, and strategic knowledge from angels to support their growth.

Angel investors’ networks are seen as valuable, particularly for internationalization, growth strategy, and commercialization. While the majority of feedback was positive, startup entrepreneurs expressed a desire for increased focus on enhancing diversity, transparency of the evaluation process, and clearer guidance for funding applications. 

“Developing the startup experience will be one of FiBAN’s key areas of focus,” says CEO Tiina Laisi-Puheloinen.

According to FiBAN’s data, male-dominated teams still prevail: among startup teams seeking angel investment, only 6% are composed solely of women, while 49% are composed solely of men. 45% of the applying teams are mixed teams with both women and men as founders.

Attention to diversity is requested

Among teams that have progressed to the investment negotiation phase, 52% of teams consist only of men. 41% of these teams are composed of individuals of different genders, and 7% are composed solely of women. The negotiation phase is where companies and investors perform due diligence and agree on the terms of investment.

Diversity of teams and ideas are requested by angels too. “More diverse teams also predict better success for startups,” says Laisi-Puheloinen.

“FiBAN’s role is not only to find suitable investment opportunities for angels but also to help startup companies find funding. It’s positive to see that the applicants increasingly represent more international and diverse teams,” Laisi-Puheloinen says.

Validate your business before seeking an investment

However, according to FiBAN’s application data, companies often paint a rosier picture of their situation. Most of the respondents assessed their companies to be in the product’s initial version (MVP/seed), product-market fit, or rapid growth stage (scaling). Only a small fraction considered themselves to be in the ideation phase among the respondents. 

A significant portion of companies seeking funding from FiBAN are not yet ready for an investment – the product and idea may be great, but credible numbers are still lacking.

“As an entrepreneur, it’s good to assess your company from the perspective of whether you would invest in it yourself if you were looking at it from an outsider’s point of view,” Laisi-Puheloinen says.

“It’s important that the business has been validated to some extent before investors join in. Angels as well as other investors want evidence of the viability, scalability, and demand. ” Laisi-Puheloinen emphasizes.

Having been a startup entrepreneur herself, she understands the challenges of seeking funding. “Applying is a tough job for every entrepreneur, but I’d encourage you not to give up. Though submitting an application doesn’t guarantee funding, you can always reapply for funding from FiBAN when your business is a bit further”, she adds.

Survey results highlights

80% of startups seek more than just funding

  • Startups look for industry expertise, networks, and strategic guidance for growth from business angels.
  • Angel investors’ networks are seen as valuable for internationalization, growth strategy, and commercialization

Diversity and More Guidance Requested

  • Startup entrepreneurs say they wish to see more diversity within the startup ecosystem.
  • More clear guidance for the funding process and application are requested.

Reflecting on FiBAN Applicant Data

  • Data shows that most startup teams seeking angel investment are still predominantly male, though the proportion of mixed teams has increased. Approximately half of the applications are from mixed teams with all genders while 6 percent are all female teams.
  • The majority of teams reaching the investment negotiation phase consist of only men, while 41% are mixed teams and 7% all-female teams.

Self-assessment of startup’s stage vs. FiBAN data

  • The survey results indicated a difference in how business angels and startups perceive their investment readiness.
  • Most startups estimated to be at least in the MVP, product-market-fit, or scaling stage, while according to FiBAN’s deal-flow data, the majority of startups seeking funding seem to be closer to the idea stage or MVP, based on the traction they demonstrate in their applications sent to FiBAN.
  • Many startups that apply for investment from FiBAN, are too early from the point of view of scalability.

More Information:

Milja Mäkelä
Communications Manager, FiBAN ry

Tiina Laisi-Puheloinen