PitchHelsinki: narrowing the gap between start-ups and investors.
“BE VERY clear about what you are trying to achieve, and surround yourself with people who are really good. No one person is ever right.” That is Alan Moore’s advice for entrepreneurs struggling to attract funding. The British educator and author of the book “No Straight Lines: making sense of our non-linear world”, a journey through a new way for social, economic and organisational innovation, was guest speaker at the eighth edition of PitchHelsinki. This annual event gives prominent start-ups the opportunity to publicly present their ideas and connect with potential investors.
Held on 20 November at the Helsinki city hall, the evening saw a total of 26 companies gather with a common goal: network and exhibit their forces. After the initial contact, the core part of the programme then arrived when 13 pitchers took over the stage, and in short turns of five and three minutes tried to convince the audience their take-off companies would be worth hundreds of millions just a few years down the road.
The latest edition of PitchHelsinki has introduced a novelty. Six of the participating start-ups have opened one-day rounds on Invesdor, an equity-based crowdfunding online platform through which companies get more funds in exchange for shares. People interested in investing can do so with as little as 20 euros.
Suppilog application connects marketers, manufacturers and importers with the buying customer companies to a joint procurement channel through cloud service.
“Suppilog crowdfunding round ended in the beginning of October this year. The round proved as a financial mechanism to work quite well for our purposes. We gathered over 132,000 euro of seed funding via Invesdor, and found it to be an excellent vehicle to reach out to private investors in terms of time and efficiency. Naturally, we worked hard on preparing the necessary materials and the business plan prior to starting the round over the summer. We also ensured that the crowdsourcing service was most appropriate for us. The “target group” of investors we had in mind to provide us the biggest portion of funding, was not in the end the largest group of at all. Instead, we attracted the interest of several private investors along with dozens of smaller particulars, who made a very significant contribution.” Mikko Mäkirinne, member of the board in Suppilog Oy (Ltd).
Indoor climbing made possible virtually everywhere.
“We raised 64,000 euro from 46 persons through the Invesdor crowdfunding platform. This helped to a great extent regarding the production and marketing processes to enter into a bigger business scale. The experience completely surprised me because it turned out to be a great success in terms of financial support to our business. I have since then established contact with some of the investors and I realise the great potential behind these kinds of cooperation possibilities and valuable know-how. Actually, one investor has even been quite active in marketing our product. On the other hand, after receiving the investment, we were able to participate in the FIBO exhibition (an important trade show for fitness, wellness and health held in Germany), and we started a bigger production run, simultaneously making 5 new units which later were sold. This series was fully redesigned and packed with new technology, so the funds really came at a time of need.
This year, we have entered the Japanese, Canadian and French markets. There is an interesting and growing market potential.” Kaarle Vanamo, CEO ClimbStation.
“In Finland, the financial community has typically understood better mobile data, Internet and technology-oriented business proposals,” explains Lasse Mäkelä, one of the ceremony hosts and CEO of Invesdor. “In that sense, crowdfunding has provided many companies from different fields with a new financing alternative. One company that constitutes a good example of this is “gTIE”, a Finnish fashion brand specialised in neckwear, created by Jenni Ahtiainen.
Their own customers believed in the profitability of the idea, so they wanted to invest in it. Some of the partners of Invesdor also joined the adventure and, in the end, they raised around 300,000 euros through our platform. I consider the company could have faced some problems getting funding in a more traditional way – for example, through business angels and capital networks.”
Innovation is in the air
What are the most promising areas to start a business nowadays? “Honestly, all of them,” Moore states. “We are seeing people completely reimagining, for instance, what a manufacturing company could look like thanks to 3D printing technology. On the other hand, access to education is fundamentally changing. Part of the discussion is based on how we can educate kids in poverty. The non-profit Worldreader is distributing e-books to children in Africa, so that they can gain access to tens of thousands of books at a price point which is a fraction of what normally would cost to buy a book and ship it. Then, on the other scale of that is MIT giving away entire curricula online for free under creative commons licenses.
Healthcare is also facing huge challenges. In the West we have an aging population, but services are failing to adjust to this huge demand. Retail is also evolving. To the point that big supermarkets (like Tesco in the UK) with their massive warehouses, are actually looking five to ten years ahead and they understand that, with people doing so much shopping online, no one is going to come to those places anymore. So, I see innovation and transformation happening in every single industry.”
“I think that if I was an investor the first thing I’d ask myself would be: what is the real need this company is trying to solve?” Moore adds. “It’s about doing much better, but with a lot less money and a lot less resources employed in the process.”
Throwing the ball
To illustrate the previous point we can have a look at the long list of participants at PitchHelsinki, among which a wide and varied range of business proposals can be found. From technology companies such as Tespack, with their high efficiency solar system backpacks that provide wireless energy, to Audrey: according to their slogan, “the world’s first real identity online dating service”.
However, the two initiatives named “best start-up pitch” by the jury were Playmysong and Uniqul. The first one is developing a mobile app that allows people to request songs and control the music at bars and parties, whereas the latter consists of a face recognition system which enables payments with one tap of a button – transactions are done in a second, down from the current average of nearly half a minute.
Types of crowdfunding
Furthermore,Playmysong also turned out to be the most attractive initiative from the investors’ point of view. The start-up received 24,900 euros out of the total 43,000 that were raised during the day of the event.
“Some people are entrepreneurs because they are really passionate about what they do, they want to change the world, but they are not traditional business people. And that’s absolutely fine,” Moore says before firmly concluding: “We need makers of the future, not consumers of the past.”
TEXT: EVA BLANCO