We’re doubling down on supporting idea-stage teams across Finland, Estonia and Sweden
We are meeting a lot of amazing teams and we are still seeing a massive gap in idea-stage funding. During the last 7 years we have partnered up with 118 idea-stage teams. We’ve learnt a lot and are dedicated to keep improving our support. This will continue to be our focus moving forward.
We’re seeing great results
Our idea-stage portfolio model from our first fund has proven highly efficient. We’ve returned about half of the first fund already, putting us in the top quartile of our vintage in Europe. Plus, we have the largest idea-stage portfolio in the Nordics and Baltics that’s progressed from idea to seed stage. Our current estimate is that Fund I will return the invested capital 5x based on current portfolio company growth rates and standard exit multiples.
We’re currently supporting our existing portfolio and not making new investments
With this revamp, it will take some time for us to raise a new fund and be ready to make new investments, at the same time as we are making sure we can offer the best support to our existing teams. We aim to start investing from our next fund in Q3 2024.
We’re going with a focused micro-fund because smaller funds yield higher returns
Studies show that bigger isn’t always better. Our next fund will be €30M, which we have planned to be optimal for our updated strategy. Our ambition is to reach at least 5x return, with our internal goal being 10x. Even 10x is achievable with significant idea-stage investments when we partner with a large winner.
We’re eliminating the large reserve pool because no-reserves mean higher returns
By concentrating on initial investments and not following on in later stages, we aim to maximize returns for our investors. Picking winners in follow-ons in the seed or A-stage is nearly impossible, so these more expensive follow-on investments would dilute our returns. This way more capital is being used where we are best and where we have achieved the best results. We will keep the possibility of investing in follow-on rounds from an Opportunity Fund as we have in our Fund I. This means two funds with different risk/return profiles with lower total management fees and therefore higher IRR for our LPs.
We’re increasing our initial ticket size because top teams need sufficient runway
With our new model, we can fund idea-stage teams with up to €1.5M before they go out to raise their next round. This ensures our founders have enough runway and resources to validate their ideas further and pivot if necessary.
We’re focusing on partner-level support because that’s what founders value most
Our new focus triples down on partner-level support per team. Our improved portfolio model allows us to provide new portfolio companies with a team of partners, not just one.
We’re happy to back diverse teams
It’s hard to find your first investor, especially in the idea-stage. We’ve been very happy to see that we have found great diverse teams. In our second fund, 36% of our investments have at least one female founder, which is 40% higher than the European average in 2023. We’ve also backed 3.5x more immigrant founders in Finland than the average Finnish VC since 2017.
We’re amplifying our focus on founder well-being.
Building a startup is tough, but success shouldn’t come at the cost of health. Over the past five years, we’ve focused on the well-being of our portfolio founders. There’s a direct correlation between founder well-being and team health, which ultimately drives venture success.
Aleksi, Lasse, Riku
