HackFwd Has Come To Finland

If you are a tech geek with an idea for a B2C web service living somewhere in Finland, there are few funding options at your disposal. Most probably you'd apply for public funding from Tekes, but that needs to be supported with additional private funds. You might take a loan or raise capital from other sources or, like most tech geeks currently, you'd raise the money by subcontracting or free-lancing. However, there is a new pre-seed funding that has recently come to Finland - HackFwd. The fund was started by tech geeks for tech geeks. The term 'geek' is used in this context very proudly because it portrays how passionate the people in question are about hacking and programming.

HackFwd's concept is unique in three ways. First, it's all technical - the entrepreneurs-to-be should live and breathe for hacking, but also be flexible enough to work within market contraints. Basically, the programme is looking for European Zuckerbergs who enjoy coding as a pastime. Secondly, the fund invests in the most early stage possible, meaning that having just an idea and a very basic prototype is enough to apply. No business model or other prerequisites for a start-up are necessary if you can convince HackFwd's referrers of your idea. Lastly, HackFwd in practice is a 12-month programme that includes a lot of personal mentorship, help in legal and administrative matters and meetings every three months (held quite often in Majorca) with all of the programme's advisors and start-ups to share experience, learn and move forwards with your business.

HackFwd's investment model is very simple and transparent. If you're admitted to the programme, they roughly meet your current salary for a year and take 27% stake in your company. Another 3% is required to be given to those people who helped you most throughout the programme (advisors or even other start-ups). After the programme is finished, HackFwd would also help you get to the next phase by introducing you to further funding options or finding additional mentorship.

Ville Miettinen, who's acting as HackFwd's referrer in Finland, commented that such an initiative is particularly welcome here where very early-stage funding is lacking. The concept is also quite interesting because typically pre-seed investment is extremely local while HackFwd is a pan-European project: the headquarters and most of the deal flow is currently in Hamburg but there are referrers in >10 EU states and the fund is appllicable to Switzerland, Norway and Turkey in additional to all of the European Union. The biggest benefit HackFwd brings, according to Ville, is that it helps sky-rocket the speed of execution. Few Internet businesses are local and thus have global competition from places like Sillicon Valley where there is already a long-standing culture of fast growth with sufficient funding. In that environment, hacks that want their business to take off don't have time to subcontract or free-lance.

However, in Finnish context all discussion comes down to public funding. Ville is currently figuring out how to combine HackFwd's model with funding bodies like Tekes or Vigos. Public funding instruments are very important in Finland, though bringing a healthy private sector to complement it is just as important. HackFwd offers a very transparent model but having quite a specific focus means that it would only suit a couple of start-ups a year from any given country. Though, as Ville pointed out, any credible pre-seed investment model, no matter how few cases it would suit, is welcome in the Finnish ecosystem.

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