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Sitra’s PreSeed to provide expert advice in creating a European-wide market place for initial investments

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The European Commission wants business angels to be an engine of trans-national investment activity

The European Commission has launched an extensive two-year development programme aiming at activating European business angels in trans-national investment activity. Sitra’s PreSeed service has been invited to be an expert partner in this programme, which so far is the largest European undertaking uniting money and knowledge to strengthen early-stage growth companies. The launch conference of the programme was held in Brussels from 14 to 15 November.

The EASY programme (Early Stage Investors Action for Growth of Innovating Businesses) involves 10 EU Member States and 17 partners and has a budget of 5.2 M€. In addition to Finland, the UK, France, Italy, Spain, the Netherlands, Belgium, Czech Republic, Poland and Slovenia are participating in the programme.

The programme is very practically oriented and seeks tangible results. During the programme, two European-wide investment events will be held, introducing 24 European investment targets for approximately 240 business angels from different countries. The aim is to secure 10 trans-European initial investments. There will also be 4 national investment forums, each aiming to attract 120 European business angels to invest in about 10 early-stage growth companies.

– The European Commission has shown great interest in Sitra’s PreSeed concept and experiences gained through it. These experiences give us an advantage when helping to create new European practices which are well in line with Finland’s interests, says Risto Kalske, Director of Sitra’s PreSeed.

Sitra has developed its acclaimed PreSeed concept as well as the INTRO market place to serve as an initial investment platform for Finnish early-stage companies. The INTRO market place is used by a growing 450-strong group of business angels and all major funds. The value added factors in Sitra’s concept are clear: funding and supporting business idea development (LIKSA), channelling business resources into early-stage companies (DIILI), corporate relations (Microsoft), forums for acquiring members to boards of executives as well as a merger forum for merging subcritical companies to create stronger start-ups and improve their investment readiness. Nearly 40% of all enterprises introduced at Sitra’s INTRO marketplace have managed to secure their initial investment there.

The EASY programme will survey, for example, the needs and methods related to improving companies’ investment readiness, initiate European-wide investment activity during the programme through six European investment events, harmonise methods related to valuation of companies, develop necessary quality standards for the field, and study taxation and tax incentives in the various countries to establish common practices. The programme aims at creating a European system to enable trans-national initial investment activity, that is, to bring together European target companies and business angels in a marketplace similar to Sitra’s INTRO.

– This is the first broad-scale attempt to activate the knowledge and financial resources of business angels to help European early-stage growth companies to succeed. Trans-national ownership is an important and long-term factor in the internationalisation of companies. This will give a European perspective on business analysis and the entrepreneurs will receive the support of a more international network, says Kalske.

It is a high priority for Europe to start using its business angel resources better and to put professional business experience to further use. Europe has an estimated 1.2 million potential private investors, but only a little over 100,000 of them are active. In America the situation is very different. In 2005, U.S. funds and business angels both invested nearly USD 25 billion, the funds investing in 3,000 and business angels in 50,000 enterprises. Recycling business know-how in new companies is quite likely one of the strengths of American initial investment markets.

Further information

Risto Kalske, Director Sitra, PreSeed Finance
Tel. +358 9 6189 9412
firstname.lastname@sitra.fi
www.sitra.fi/preseed/eng

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