Siilasmaa: Direct Finnish Gov't Investments To Startups Should Be Stopped
Risto Siilasmaa, the F-Secure Chairman and Founder, one of the most well known private investors in Finland, has stated in a recent event that direct Finnish government investments to startups should be stopped. By this he means that the way they are currently done, should be stopped and we should leverage the wisdom in the market to make smarter investment decisions. His basic statement was that Finland has created the Vigo accelerator program which is full of serial entrepreneurs and the government investment funds should beinvested through these entities. He states that Finland should look towards Singapore and Israel, where the government leverages all private investments with certain restrictions.
Siilasmaa is also the chairman of the Vigo accelerator program steering group. But no matter how you look at it, Finland should move towards a model, where tax payers' money is invested more wisely - through signals in the market place. He also stated that to make this equation work, private investors should have the possibility to buy out government investments - just as it's possible in Singapore or Israel.
The thinking behind this rationale is very simple; serial entrepreneurs are more effective with tax payers' money as they have a business to run. Finnish tax payers should also look at it in a way that the government would essentially create a fund that leverages the wisdom of the serial entrepreneurs without having to make the investment decisions themselves. Essentially, the fund could make money in the long term without any investors in its payroll (to over simplify a little). How good would that be?
Source: Tietoviikko
Clearly, Tekes and other agencies have not done a great job making investments and that's unsurprising given that they lack expertise and add little value. However, I'm a little wary of giving too much power to the Vigo companies. I have heard many complaints already that they wield too much power in the ecosystem. The only person I am aware of from Vigo with success in the consumer internet space is Petteri Koponen from Lifeline. I've only met him briefly but people I respect speak very highly of him. Nevertheless, I'm not sure we should channel all our consumer internet investments through one person or even two or three.
So, my point is that Vigo should be expanded significantly and even bring in people from outside Finland if it is to manage a very significant fund.
What a total hypocrite. Talking the talk but not walking the walk. Siilasmaa has received tons of goverment money in Fruugo (a complete friggin' failure). Is Siilasmaa returning any of his stashed public money now that Fruugo has found a "private partner"? Well are you, punk? F-Secure lost the market about 500 years ago. Siilasmaa is able to maintain his facade only because no one in Finland has the guts to speak up.
Hymail, there have always been private investors in Fruugo and there isn't a way to "return the R&D money" these days even if you wanted to.
That said, I don't he is a hypocrite - he's doing what every entrepreneur does, takes advantage of the opportunities. The current R&D money in Finland is an opportunity, but not a great one from the tax payers' perspective.
If this sort of change will go through, tax payers' money will be spent well and not so well in the future as well - the difference is that the market (=private investors) would be making the decisions. In the long run, I believe they will be more effective (and yield a better return) than the public agencies.
Even though government subsidies are a bad solution if ever there was one, they will be needed as long as other funding means are scarce (that is funding at acceptable conditions).
However, in the high tech area there are a couple of opting where funding can be had within a rather good framework. There is a company in LUX acting as aggregator / facililator; called eSolve Capital (http://esocap.com)