Accelerating innovation process of start-ups (ISPIM2015)
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The document discusses the role of business incubators and accelerators in supporting high-tech start-ups in Finland, highlighting the need for funding and networking opportunities. Despite the availability of various services, start-ups still face challenges in accessing funding and finding suitable networks. The research identifies different types of incubator services and emphasizes the importance of private actors in the support ecosystem.
Accelerating innovation process of start-ups (ISPIM2015)
- 1. VTT TECHNICAL RESEARCH CENTRE OF FINLAND LTD Accelerating innovation process of start-ups - Business Incubator and accelerator services in Finland ISPIM conference 14-17.6.2015 Budapest Marjaana Komi, Kaisa Still, Arto Wallin, Päivi Jaring
- 2. 223/11/2015 2 Setting the scene High-tech start-ups and growth companies as basis for economic growth in Finland Significant governmental funding support for creation of new technologies and encouragement for technology transfer Goal: new innovations, jobs, and international competitiveness Proven by studies high-tech start-ups have limited survival rate In Finland, small domestic market offers limited growth potential Start-ups are often set up by skilled engineers with exiguous business development and marketing knowhow
- 3. 323/11/2015 3 Related research Australian study (204 SMEs) Focus more on innovation generation than commercialization Funding challenges biggest problem Disproportion with offered and needed support Finnish study of commercial success factors and challenges Marketing, financing, networking, and business environment Recent study on benefits of seed accelerators (51 start-ups) Mentorship, coaching and feedback (>80%) Network, alumni and prestige valued high Study among European SMEs in 27 countries puts forward six influencing factors for innovations of commercialization Government policy, memberships in a cluster or a network, resources and capabilities, company strategy and capability, competition, and industry sector itself
- 4. 423/11/2015 4 Research question To identify and classify available Finnish business incubator and accelerator services and assess their use from the perspective of Finnish high-tech start-up entrepreneurs Research questions: What are the available business incubator and accelerator services for start-ups in Finland? How have these services been utilized by start-ups?
- 5. 523/11/2015 5 Research design Existing services Discovery of Finnish business incubator and accelerator services Expert knowledge Internet search and literature review Utilization and experiences of these services Gathering experiences of Finnish high-tech start-ups Semi-structured face-to-face interviews in the SLUSH conference 2014 in Helsinki 28 start-ups were selected to analysis of 38 interviewed Excluded: non Finnish companies, companies only in the ideation phase, or no international business objectives Slush database was used to analyze background data of companies
- 6. 623/11/2015 6 Business incubators Business incubator is an umbrella concept for idea labs, venture labs, business centers, hubs, technopoles, hatcheries etc. Business incubators versus business accelerators Theodorakopoulos et al. 2014The evolution of business incubators
- 7. 723/11/2015 7 Classification of incubator services Three classes adapted from infoDEV (2012) 1. Seed capital providers Focus on capital investments, often augmented with brand building and sometimes with mentoring 2. Network boosters Hosting regular events under the certain theme or topic 3. Hand-holders Conventional actors offering business development services, training and mentoring
- 8. 823/11/2015 8 Network boosters in Finland “better networking with customers would be important” “we are looking for proper international networks” “we need to have a distribution partner network” “better networking with similar start-ups” “scaling of business requires lots of contacting and networks“ “we need better networks and mentors for international growth” Four actors operating in Finland, MobileMonday (private), FinNode and TeamFinland (Governmental) and Enterprise European Network The voices of the interviewees regarding networking
- 9. 923/11/2015 9 Network of network boosters in Finland Enterprise Europe NetworkFinNode TeamFinland Finpro TekesSitra VTT Finnvera Finpartnership Chambers Culture and science institutes Ministries Turku Science Park Finnfund ELY centers Finnish Industry Investment Academy of Finland MoMo Finnish start-ups INTERNATIONAL MARKETS One of these incubators were mentioned to be used
- 10. 1023/11/2015 10 Use of seed capital providers in Finland Table 1 Funding sources of the start-ups Capital providers Granted funding % of all granted % of all granted Governmental 48,9% Tekes 17 37,8% ELY centers 3 6,7% Finnvera 2 4,4% Sitra 0 0% Private 51,1% Venture capitalists 12 26,7% Angel funders 6 13,3% Nokia Bridge programme 3 6,7% Indiegogo 2 4,4% Total 45 100% 100% Finnish Seed capital providers Over 70 venture capitalists 3 business angel associations 5 government funded bodies All Health-care companies (11) most successful attaining funding
- 11. 1123/11/2015 11 Use of Hand-holders Table 2 Hand-holders and supporters mentioned to be utilized by start-ups Actors Time mentioned % of all Advisors, advisory boards 9 37,5% Aalto university based units 5 20,8% Reactor Polte 2 8,3% EIT ICT Labs 2 8,3% Others*) 6 25,0% Total 24 100% *) Accelerando, FV growth couching, Health SPA, Starttaamo, TE center, Veturi Venture Accelerator Finnish Hand-holders City based: - Turku Science Park - BusinessOulu Governmental: - Finpro - Viexpo - Aalto University - EIT ICT Labs
- 12. 1223/11/2015 12 Concerns of the high-tech start-ups Table 3 The main concerns of the start-ups Concern Time mentioned % of all Funding 22 43,1% Networking 11 21,6% Business development 10 19,6% Mentoring 5 9,8% Finding customers 3 5,9% Total 51 100% Confirms the other research done in this area Funding is a concern for 22 start-ups, equals 78,6%
- 13. 1323/11/2015 13 Summary 1/2 Versatile incubator services are available for start-ups Hand-holders (>9), network boosters (>4), seed capital providers (>70) Services of Hand-holders were utilized largely The role of private actors was highly emphasized Why is this so? Network boosters were not recognized as service providers Yet, networking is one of the main concerns of start-ups Why is this so?
- 14. 1423/11/2015 14 Summary 2/2 Government and private funding was equally and largely exploited Funding is still the main concern Criticism of governmental bureaucracy Investors, venture capitalists are difficult to find Finding customers was not seen as a problem Why is this so? It seems to be quite a laborious effort to find the existing incubators Seven (7) new Hand-holders emerged during the interviews Based on publicly available information distinction between incubators is arduous
- 15. 1523/11/2015 15 Thank You! Contact: Dr Marjaana Komi marjaana.komi@vtt.fi VTT Cyber Physical Solutions +358 (0)40 5321 637 P.O. Box 1100 (Kaitoväylä 1) FIN-90571 Oulu, Finland