After working over 20 fascinating years in venture capital, corporate venturing and informal venture capital, it is good to take a step back and figure out where we are, how we got here and where are we heading.

 We are getting better, much better

 During this decade, many great efforts have been made in Finland, especially in the capital region, to improve the ecosystem of startup entrepreneurship.

 Universities have done a great job in creating more practical entrepreneurial and financial education while simultaneously developing their startup accelerators and getting their brightest students involved in remarkable organizations such as Slush and Aalto Entrepreneurship Society. These organizations play an important role as stepping stones for young entrepreneurs-to-be and new members of the entrepreneurial workforce for any organization. On an individual level, new-generation entrepreneurs have become more persistent: trial and error is normal and failure is an option, one accepted more generally than ever before.

 Simultaneously, many other key characteristics have developed at lightning speed. A dramatic, positive transformation has taken place in communication and presentation skills, especially among growth entrepreneurs. A talented team can now receive growth funding from anywhere, with or without a local syndicate partner. Yes, it is still tough, but definitely possible for those with exceptional talent. As recently as during the last decade or so, it was very rare for an international investor to make a growth investment without a local partner, or to give smaller venture funding to a promising startup for the reasons described below.


Remaining challenges

Just recently, Inc. magazine published the 5000 fastest growing companies in Europe with minimum revenue of two million euros, and it was striking to notice that there were no or very few venture-backed companies from Finland.

 According to a study on “Industry clockspeed's impact on business innovation success factors” published in the European Journal of Innovation Management, industry clockspeed has been considered a possible moderator of innovation success. The results provide clear evidence about the importance of industry clockspeed as a moderator of the relationships between strategic leadership, competitive intelligence, management of technology and company's innovation process. There is room for improvement in this space in Finland, especially when also taking into account the relatively rigid market for workforce.

 Invest Europe (former EVCA) compiles statistics about exit activity on venture-backed companies in Europe. Without going too deep into the comparability of the data from different countries, it seems that we have room for improvement on this front as well.

 The world is still getting smaller – we have the relative advantage

 Finland has been described as a small, capital-poor market with a peripheral location characterized by harsh weather and a difficult local language. Development of global communication, travel, logistics, quality of the workforce and many other key assets have changed the conditions for the better in building growth enterprises, and none of the above factors remain real obstacles today.

Technology is less capital-intensive and much more accessible than ever before for anyone to utilize or develop further. It is no longer a privilege of the corporate world alone. Digitalization and real opportunities for creating disruption are major enablers of growth entrepreneurship today. Disruption and entrepreneurship are, and should be, on everyone’s agenda today in one way or another. Disruption is not only about technology and ever-changing business models, it affects working life and customer needs, among other things.

In order to get venture capital industry on healthy ground, we need to see more critical mass with good exits. This would keep the limited partners who invest in venture funds interested in this asset class for the longer term as well. This, in turn, would create much desired growth in this country.