Using A Sales Process for Venture Capital

Money (by cpalmieri)Daniel Blomquist from Creandum venture capital firm wrote lately how entrepreneurs should focus more on which VC to approach than how to approach. He argues that you can make more out of your time if you try to find out and select the most prominent VCs for your firm beforehand. As Ville Vesterinen and Daniel mention in successive post's comments, it is a sales job. But a bit of clarifying could be used to point out the similarities and try enlighten the whole process further. The fund raising process seems to be somewhat comparable to business-to-business selling process.

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Artturi Tarjanne of Nexit Ventures: Finland Has Superior Technology Skills

nexit venturesLast week I talked to Artturi Tarjanne, a venture capitalist and a General Partner at Nexit Ventures in Helsinki, Finland.

You can find the first part of the interview here. In the second part (see video below) we discussed on what kind of companies Nexit is looking for and how you can approach Nexit if you're a startup.

We touched on the quality of current and past deal flow in Finland. Tarjanne told me that even if we may lack in business skills vis-a-vis say the US, our technology skills are very strong even compared the Silicon Valley. This is the same message that for example Richard Allan Horning, a Principal at  Fish and Richardson, a very prominent law firm in Silicon Valley, echoed in Tallinn just last week when we met him.

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Video Interview With Artturi Tarjanne of Nexit Ventures (Part I)

Venture Capital is in flux. Some say it's frozen over and funds are pulling back, and some say it's the best time to invest and find the next Googles and Facebooks. Everyone, including us , has an opinion on the topic.

Earlier this week I talked to Artturi Tarjanne of Nexit Ventures and asked what Nexit is doing in the current down market. Tarjanne has been one of the most active actors in the Finnish venture capital market and pivotal in building the emerging US-style venture capital market in Finland. We talked about how Tarjanne ended up to be a venture capitalist, what lead to Limbo to merge with Brightkite and why Nexit Ventures operates in two very different locations: here in the Nordics as well as in the Silicon Valley. We also discussed Nexit's investment strategy and how they see the current handset market. Check out the video below.

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Mobile Startup QAim's CEO On Landing Round A Funding

QAim logoQAim, a Finnish mobile startup, has gotten Series A funding from Veraventure along with private investors Tapio Heikkilä and Olli Oittinen (press release in Finnish). QAim focuses on improving mobile services usability. 

QAim will use the funding to finalize the piloting of their CEM4Mobile product and begin the foreign sales focusing heavily on five European countries within the next three years. (QAim has been looking for new talent also through the Job Board on ArcticIndex.)

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Reminder: Elevator Pitch Contest for Nordic & Baltic Firms

ITech Law Conference TalllinnThis is a reminder for all interested startups in the Nordic and Baltic countries to apply for the upcoming elevator pitch contest, to learn from venture capitalists and other startups and win free world-class consulting.

The instructions on how to apply can be found in our original post, hurry up!
The contest is open to all technology startups in the region.

The pitch contest is organized on 26th May 2009 in Tallinn, Estonia in conjunction with the Second Annual Tallinn Conference of The International Technology Law Association.

See also the detailed conference agenda (PDF).

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Open For Applications: Elevator Pitch Contest

Money

Update: The deadline is extended until May 13th.
The conference agenda can now be downloaded from the
event home page (or use this PDF direct link).

ArcticStartup is proud to present an opportunity for all Baltic and Nordic startups to connect with and pitch to venture capitalists and compete for great prizes.

In alignment with the Second Annual Tallinn Conference organized by The International Technology Law Association in collaboration with Enterprise Estonia, ArcticStartup is cooperating to organize an Elevator Pitch Business Plan Contest with support from Connect Estonia. The contest is held in Tallinn, Estonia on May 26, 2009.

Prizes:


  1. One full day of law consulting with Fish & Richardson P.C., Silicon Valley, worth $6000. The prize can be used as the winner wishes, e.g., to incorporate a subsidiary to establish operations in Silicon Valley. The consultation can be done in person or by Skype or Polycom video. Consultation with the Munich office of Fish & Richardson P.C. may also be included, subject to availability and requirements of the contest winner.

  2. One full day of law consulting with Knobbe, Martens, Olson & Bear, LLP,  worth $3000, to be used as the winner wishes. The consultation can be done in person (location negotiable) or by Skype or Polycom video.


The jury: 

  • Martin Hauge, Managing Director, Creandum, Stockholm

  • Allan Martinson, Managing Director, MTVP, Tallinn

  • Artturi Tarjanne, Managing Director, Nexit Ventures, Helsinki

  • Rick Marshall, Managing Director, Intelligent Capital, San Francisco

  • Sten Tamkivi , Chief Evangelist, Skype, Tallinn

  • Ott Parna, Managing Director, Estonian Development Fund, Tallinn

  • Richard Allan Horning, Principal, Fish & Richardson P.C., Silicon Valley


Growth-oriented technology startups from all Nordic and Baltic countries are welcomed to apply. Five firms will be selected to present a 5-minute pitch at the event. The judging criteria include the expected success of the firm, growth potential, differentiation and competitive advantage, risk and financial viability, and the management team.

Please note the contest rules and other information in the Invitation. Any questions about the contest can be sent to miikka(at)arcticstartup(dot)com.

The applications must be based using this form.

Please send your application to events(at)arcticstartup(dot)com latest by May 13th 6:00 PM EET. Finalists will be announced on May 14th.

Coaching and training for preparing the pitches are available to all chosen finalists prior to the contest, provided by Connect Estonia and members of the International Technology Law Association Luiga Mody Hääl Borenius and Raidla Lejins & Norcous, either online, in Tallinn, or in the participants' home country, depending on possibilities.

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Grädde Wants To Invest In Tomorrow's Internet Stars. Are You One Of Them?

"You don't become an artist because you want to, but because you have to."

The words are of Katja Lepola, a partner at Grädde Invest. Katja held a speach about venture capital for companies in early stages at the Geek Girl Meetup on 28th March in Stockholm, Sweden.

Her quote was strongly related to as of being an entrepreneur. An entrepreneur is most likely not something one chooses to become, but something one has to do. It's very hard to be an entrepreneur, especially if one is to create a great successful company. To make it, one has to have a very strong commitment.

Katja's advice for an entrepreneur

Besides from the fact that entrepreneurship is something one has to do, Katja shared her best advice for an entrepreneur:


  • Love your customer, or get customers who you can love. You'll benefit greatly if you're interested in creating value for your customer.

  • Create a company you love to work for, it's going to be long hours along with ups and downs.

  • Build a company that is easy to sell. Do your homework on what type of companies are most likely to be bought.

  • There are no shortcuts to create value, it takes time. Be prepared on a fantastic, but a long and tuff journey.

  • No skeletons in the closet. Keep your records straight like if you were to get listed at the stock exchange the next day.

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Dedication And Leadership In Startups

teamWhen thinking about investing in a very early stage startup where the technology or the market has not been proven yet, the focus shifts to the team. Naturally there needs to be a big enough theoretical market, the technology needs to work and product needs to make sense even if only to those few individuals, namely the team and the investors (think Twitter). But when the idea is only a very rough proto or just a concept, the team will make all the difference. Team is always important, but in early stage startups it's hugely important.

I talked to a prominent VC over a dinner this week and he told me that despite all the attempts it is very hard to determine what are the key success factors for a startup ie. which startups make it and which won't. But one thing where there was a correlation (not necessarily causation, but correlation) was whether the entrepreneur had previsous successful starups under her belt. So not just startups, but successful ones that he followed through with regardless of whether the idea evolved as they went forward. This might sound obvious, but it is interesting still that this is the only factor that can be shown to correlate with the success of a venture. What this comes to prove is that early stage venture capital is people business. Having said that, it does not mean that you need to be a succesful serial entrepreneur to be pull it off. If the entrepreneur doesn't have a historical track record, and most people don't, there are other indicators to look at.

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Index Ventures Buys When Everyone Else Is Selling

index venturesIndex Ventures, a leading venture capital firm active in venture investing since 1996, has closed a €350 million early stage fund (press release here). Why is this relevant to the Nordics and Baltics? For two reasons.

1) They directly contacted us and told about the new fund, which means that they are very actively looking at the arctic region, among other regions, for investments and wanted to get the message across. So if the product and the team is right, you have same changes of getting into their portfolio as the next guy. This leads to the second reason, which is perhaps the more important one given the times we live in.

2.  Here we repeat what we've been saying all along and what got confirmed in the ArcticEvening last week: Now is a great time to invest, which is partly a direct consequence of the fact that in a down-cycle copy cats and weak teams disappear and great ones stand out. There is more talent in the market experimenting with new ideas since they either get layed off or decide to leave in consequence of their steep career advancement stalling. We also reiterate what Creandum said in that those who manage to establish themselves and grow in this climate will prosper further in the better times which eventually come. It might not be easy, but then again for a startup it never is, so really the playing field is just levelled when everybody else is neck deep too. Now you can use the feedback as a real yard stick to measure whether your idea is right or whether it needs more work, or whether you're just working on a completely wrong idea. In good times even the bad ideas get funded as long as you are riding the right wave.

Now, since the feedback is brutally honest (sometimes even too much so), it saves you a lot of time and investors a lot of money. One reason for the lack of new investments is because the venture capital funds are also strugling to raise money from their limited partners (LPs). And yes, why Index Ventures is investing when most of everybody else are pulling back is partly because they can. The truth is that they could raise money in any economy. But this is just because venture capital is the most merit based sport in the world, for both, for startups and for the VC funds themselves. Index can raise money because they have shown that their investors get their money back with generous interest. So just as it might be hard for the startups, it's also hard for the VC funds. And this is exactly why the better venture capital funds just as the better startups see this economy as a great opportunity, when at the same time there are less competent startups and VC funds dying at an increasing rate. In this scenario the latter seem take most of the headlines, but a smart entrepreneur understands this and only increases his focus to navigate his startup in the chaos that was once well functioning economy. The very best entrepreneurs even see the chaos opening massive opportunities and jumps at them.

All things considered, Index Ventures' message from last week's Tuesday is loud and clear.


Index Ventures...with investments in a number of Scandinavian tech companies including Stardoll, MySQL (Sun), Imbera and Trolltech (Nokia), today announced we’ve closed a new seed / early stage fund. Our geographical focus remains the same – Europe, Israel and the US, and we continue to seek deals in the tech space, including enterprise, consumer, mobile and advertising.



I don't think there could be any stronger proof of the fact that it's now or never, than the €350 million early stage fund that Index just raised. The message just can't get more concrete than that. Just as Warren Buffet says "When investing, pessimism is your friend, euphoria the enemy". Index seems to have taken heed.

Time to get cracking people! I know we will.

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Monty Strikes Again And Invests In MoiPal

MoiPalMonty Widenius, one of the founders of MySQL whom later made a successful $1B exit, has invested through Open Ocean Capital to MoiPal - Ironstar Helsinki's social gaming world. We previously told Monty investing into Against Intuition.

“I am excited to invest in the MoiPal world and help it grow even faster in the future”, says Monty. “I have always been interested in virtual worlds and seen how the communities around them continue to grow. The thing that really stands out to me with MoiPal, is the way it combines the social networking aspects similar to Facebook, with the caring of your online character, like you do with Tamagotchis or in games like Sims. I am looking forward to adding educational aspects into the game, so that players learn useful things while they play. When you combine this with open interfaces and engage developers out there to expand our world in their own directions, I think we can achieve something really Great!”

“We are thrilled to have Monty on board”, says Joakim Achrén, founder of Ironstar Helsinki. “The investment will give us a stable ground for growing MoiPal to the top league." With such strong words from the founder - it can be argued that the investment is in the seven-figures, even though it is not disclosed.

MoiPal has gathered some 120 000 members during its first year of operations. The company has some interesting innovation in the pipeline as well, they are adding open API's for developers to leverage on the sprites in the game as well an Open Social Application approach so anyone can participate in extending the virtual world.

It seems that during the last 12 months we've reported on a lot more investments from well known investors than during the boom times. Congrats to the MoiPal team for scoring an excellent investment and a resource that Monty definitely is.

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Social Music Marketplace gogoyoko Raises ISK 100 Million

gogoyoko logoDespite of the downturn and bad overall economical situation in Iceland, the new social music service gogoyoko (see our previous intro)  has secured 100 million Iceland Kronur (slightly more modest in euros: EUR 0,69M; USD 0,89M) in funding from Icelandic The New Venture Business Fund (90 %) and private investor Vilhjalmur Thorsteinsson (10 %).

The purpose of the funding was not disclosed, but in the company's newsletter it is stated that the firm has been growing steadily and just moved to a bigger office. gogoyoko is still looking for more people and prepares for increasing international marketing activities this year. gogoyoko has gotten advice and steering for the fundraising and  product development process from Norwegian  "New Media Innovation House” Ignitas that also has taken an equity stake in gogoyoko. Ignitas has been previously involved in selling Norway's #2 social network Biip.no to media enterprise Egmont/Nettavisen.

gogoyoko provides artists and other music right holders a social marketplace allowing them to sell music directly to consumers worldwide without middlemen. The service is currently running in closed beta, planned to be publicly opened in April. gogoyoko's service is promised to include interesting features like a custom music player embedable to any site through which the users can stream (ad-funded) tracks and albums for free. The player is also supposed to include a music store interface. On gogoyoko's portal, artists can create their personal sites, write news, blog entries, upload discography, pictures, videos, and enter gig information to gogoyoko's global map.

The firm's updated intro video:

Gogoyoko from Gogoyoko on Vimeo.

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Axel Technologies Raises EUR 2.4M for Mobile TV Technology Commercialization

Axel Technologies logoAxel Technologies, a Finnish multistandard mobile TV technology startup, has received EUR 2.4 million Series B investment from Nexit Ventures and Finnish Industry Investment Ltd. The investors are the same as in the first round approx a year ago. The funding will be used to strengthen Axel’s sales and marketing operations to cover the global market, and to "intensify R&D efforts focused on anticipated developments in the mobile TV market", i.e., bridging the gap between the fragmented regional and global mobile TV technology solutions and standards.

Axel bannerAxel Technologies develops mobile TV technology enabling device manufactures to bring mobile TV to all portable devices, like mobile internet devices, portable media players, netbooks, and car navigators. Axel claims to support all most important mobile TV standards, and provides also Java and native UI client with features like service guide, purchases, live TV and on-demand video. Axel also statedly has the world’s only authentic DVB-H field test network.

So far mobile TV hasn't taken off that well globally outside Japan and South Korea,  although Axel Technologies' press release quotes estimates that mobile TV subscribers are forecasted to reach 250 million by 2010. There are quite a many obstacles still in getting profitable business running around mobile TV, though, as the value chain is pretty long and complex with many stakeholders (manufacturers, wireless carriers, content providers, technology providers, broadcasters, ...). Even in South Korea the popular services are apparently not profitable. Anyway, Axel aims to remove the technology bottleneck, after which "the content offered by broadcasters and operators will determine the success of the service” as Pekka Salonoja, General Partner of Nexit Ventures and the Chairman of Axel Technologies, comments.

Full press release.

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Online Backup Service Kabooza Gets SEK 7 Million

Kabooza logoSwedish online backup service Kabooza has gotten SEK 7 Million (EUR 0,65M; USD 0,84M) investment from Aggregate Media, a Swedish VC fund. The money will be used in marketing Kabooza's online backup service through various media. Aggregate Media invests in smaller and middle-sized companies in Sweden who have a big potential in the consumer market and benefit from getting a bigger marketing budget.

Kabooza ScreenshotKabooza offers unlimited storage for personal files and photos, providing a simple backup service, which automatically copies the defined files from the local computer to the firm's secure servers. Despite the unlimited storage there is a max limit of 25 GB upload per month per user (Update: this was apparently just a beta version limitation and has been removed). The users are able to access the files remotely over the Internet as well. In addition, the company offers a possibility to generate online photo albums directly in the same service. The albums look nice with ability to comment the pictures, though it is nothing special. The service is only available for Windows XP and Vista for now.

Kabooza offers the service with a subscription, starting from 1 year at USD 49.95 up until 5 years at USD 199.95. Not that costly for unlimited storage, but then again not having any free trial period, and asking straight to sign up for one full year might turn off potential customers (Update: there is a 100-day money back guarantee, though.). However, Kabooza may be aiming to sell the service directly via ISP's and other service providers, since in the registration process it is possible to enter an 'activation code', which can be gotten from 'resellers'.

Aggregate Media's operating pricinple sounds interesting: according to the website, the holding company has four different funds owned by around ten greater media companies. So, the media companies make investments into the startups, get equity share, and then the startups spend the investments on the media companies' media space. How sweet is that? [Of course, I might be missing some details...]

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Casual Gaming House Playdo Raises $4.3M

SpineworldPlaydo AB, a Sweden based casual gaming house, has raised $4.3M financing round led by Miniclip Ltd. and Northzone Ventures in December 2008 (via). Playdo has been creating casual games since 1999 and has also entered the market for virtual worlds with Spineworld, a game released in April 2008. The financing was organised by GP Bullhound and will be used for development of Spineworld,  as well as marketing and sales of the game.

Eventhough Spineworld is a relatively new game, it already has some one million registered users. It is distributed through Miniclip. Miniclip is one of the most famous casual gaming sites in the world and thus explains the success behind Playdo's games. The business model behind Spineworld is simple, users pay a €3.95/month membership fee which gives them access to quests, virtual goods, and other features in the game.

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Russian Investment Bank to IPO FriendFinder Networks

While we cover the startup market, we do keep an eye on the investors as well and this is a story from the East that needs to be told. Renaissance Capital, a leading Russian investment bank, will be the sole underwriter of the $460 million FriendFinder IPO in the United States.

FriendFinder is the parent company of the notorious AdultFriendFinder ads that can be found all over the internet. Penthouse is also one of the products of the company and has one previous failed IPO attempt behind it from 1993. The company is in good health as it's net revenues for the first nine months of 2008 were $262.4 million, resulting in operating income of $36.1 million and EBITDA of $66.6 million.

Renaissance Capital, head quartered in Cyprus (like many Russian companies), has been relatively active in the startup scene lately. They were the one of the underwriters of the Yandex IPO, which was later postponed due to market conditions.

Furthermore in the internet sector, Renaissance Capital was an advisor in the sale of 30 percent of Mail.ru stock for $165 million to Naspers of South Africa in January 2007. Mail.ru is the one of the largest internet portals in Russia. Renaissance Capital also played an advisory role in the 55% acquisition of Rambler by Prof-Media in October 2006.

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XIHA Raises Chinese VC Funding

XIHA is a Finnish startup developing XIHA Life, a multilingual social media platform and an online community targeted at people living outside their home country, and the multilingual people around the world. XIHA invites users of any language, but adjusts the user experience to each user so that they only see automatically the content they understand. Despite the current economic climate, XIHA has raised a significant amount of risk capital from a Chinese VC.

Jani comments it's hard to find risk capital in Finland to support global growth. According to Jani the Finnish VC's thought the risk was too big. Out of the international VC's Jani thought Chinese were the best, as they have both money and vision.

The amount of investment was not disclosed. However, the amount is rather significant, as the founder and CTO Jani Penttinen says with it the company will open offices in the US, Switzerland, and China, and will hire ten more people, developers and business roles, to achieve 24h global operations. Another ten will be hired later depending on the economical climate. There is also more money coming if certain growth targets will be hit. XIHA has strong Chinese roots due to Jani working in the country, and Jani's spouse Sun Xiaowen being Chinese. "Xiha" means 'fun' or 'happy' in Mandarin Chinese, and also 'Hip-Hop' in Cantonese.

As of now, XIHA is still losing money, but the goal is to get to profitability by the end of the year. So far the main income source has been downloadable games, but XIHA is planning to expand to other digital products as well. Below is a quick interview with Jani Penttinen from Slush Helsinki.

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Gaming Defies Down Turn With Venture Capital

Games to the people!Jussi Laakkonen, CEO of Everyplay, has done extensive research in terms of investments to the gaming industry in the recent years. We also covered Jussi's previous findings in ArcticStartup close to two months ago when he reported that approximately 2 to 4 million USD are invested into the casual gaming market each week.

Jussi has compiled a nice 2 blog post analysis into the market with discoveries such as investments peaking in July 2008 to the amount of 71M USD in total to the industry. He has also added the MMORPG market to the analysis. It's clear that the two largest segments in the gaming industry, receiving funding are the MMORPG and the casual gaming segments.

Some of the largest investments made were 9You's 100M USD, 83M USD into Big Fish Games, 29M USD into Zynga Games and Gaia's 11M USD financing rounds.

So with regards to my previous post on Betware from Iceland, I asked whether we should cover the gaming industry more, a clear answer from you was - yes, please. We'll get more insight into this industry in the future as the market is one of the most attractive ones in many ways, not only investments, at this moment.

However, have a read at the full analysis into the investments by Jussi Laakkonen of Everyplay - Part 1 and Part 2.

Photo by A*A*R*O*N (CC:by-nc-sa)

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Nordic Startups At The European Venture Summit

To continue from our partnership with the Nordic Venture Forum we have partnered with the European Venture Summit to bring more visibility for Nordic and Baltic startups among the investors in the region.

European Venture Summit is two day long conference in Dusseldorf, Germany in 1st and 2nd December that will give some of the most promising companies from Biotech & Industrial Biotech, ICT and New Energies the opportunity to grow their businesses across borders by facilitating contacts to an experienced and international network of venture capital and corporate investors, strategic partners and expert advisers.

Some of the companies present include Qrodo (SWE) - Easy to use internet service for live sports events using low cost equipment and infrastructure, Mobispine (SWE) - Mobile Internet and messaging, Valimo (FI) - Your ID online, and Vocab (SWE) - Mobile intelligent learning.

You can register here and choose from different packages the one that's to your liking. They include everyting from access to company & research presentations to up to 6 pre-arranged meetings from a selection of 15 potential One2One partners.

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Good Times: Rest in Peace

Sequoia CapitalThe recent weeks' downturn in the global economy has dramatically tightened the availability of funding for companies, not only startups but large companies alike. The downturn that started from the US with the uncovering off the sub-prime "fraud" has echoed its effects to all corners of the world as connections between financing houses begin to unravel.

Sequioa Capital, one of the most famous startup financing houses in the US, has held a secret meeting earlier this week. A slideshow from the meeting has fled to the public unraveling the contents of the meeting - short and long term scenarios for the world economy. The contents of the document are not very positive. If the name of the presentation is "RIP - Good times", I think it says all.

I've also heard while discussing with Nordic entrepreneurs that the financing market has, also in Europe, tightened dramatically. This of course means that those seeking funding rounds form the public will face tougher times in years.

I'm expecting we'll see a huge rise in applications to the government institutions that support and finance entrepreneurs as the private markets tighten. It is natural for entrepreneurs to seek financing at all costs, as it is their only way to survive if they do not have a positive cashflow. This however, in my opinion and even at the cost of receiving a ton of hate mail, does not give the institutions any right to loosen their funding - just to support the companies and keep people employed.

This may seem harsh, but the Nordic startup scene is still very small in terms of employment and thus does not pose a great threat to the GDP. Times like these serve as natural ways to bring about healthy change to the markets with companies that are truly innovative and have a chance of becoming profitable in the near future (ie. are already showing healthy amounts of revenue).

One must also remember that even in difficult times, it is usually the strongest that survive - creating more value in the long run to the individuals as well as economies they serve.

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Casual Games Market Hot - 2-4M USD Invested Per Week

everyplay.fiJussi Laakkonen of Everyplay has compiled a very extensive list of investments to casual gaming startups in the US and Europe.

Laakkonen has compiled the list from public resources such as VentureBeat, TechCrunch, GigaOm, etc. He admits that there are possibly a lot of investments missing as they based on PR, which naturally works best in the US.

From the Nordics and Baltics, in the list are investments to Apaja Online Entertainment and Sulake, so I'm guessing there are many more smaller seed investments made to smaller Nordic and Baltic companies which aren't present in the list.

What's your take - is the casual gaming market the hottest corner of the internet industry at the moment?

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Partnership With The Nordic Venture Forum

We have partnered with the Nordic Venture Forum to bring more visibility for Nordic and Baltic startups among the investors in the region.

Nordic Venture Forum is a day long conference in Copenhagen, Denmark that will give the 50 most promising companies that have qualified to the conference a chance to present their business model to a long list of business angels, VC funds and other investors. 

The Forum facilitates quality local and international deal flow, which aims to highlight the high level of growth companies in the Nordics and to increase the appeal of the Region for local and international venture capital and corporate investors as well as potential institutional investors in venture capital funds.

Nordic Venture Forum report that the impact studies of the Forum results show that 58% of the presenting companies managed to raise new investments following the event. An impressive percentage and if the raised funds are even in that ballpark it's definitely something to look out for to those startups that fill the application criteria. To qualify a startups needs to 1) be an independent company with operational headquarters in the Nordics, 2) active in ICT, life sciences or clean technologies (energy & environment), and 3) seeking growth funding in the next 24 months.

The applications are closed for this year but be on the lookout for next year and talk to the the organizers to see if the conference is a good match with your startup.

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An Interview With Daniel Blomquist, Creandum

I did an extensive interview with Daniel Blomquist from the Venture Capital firm Creandum. Daniel is an associate at Creandum and profiles innovative companies that have the potential to become market leaders in niche markets. He shares great insight on Nordic companies and gives some first hand tips on venture financing.

Many thanks to Daniel at this moment!

What’s the big idea behind Creandum, what's the philosphy so to speak?
Creandum was founded based on two important strategic principles. Firstly, from a market perspective, we identified a market opportunity due to the lack of professional venture capital investors in Nordic early-stage technology companies. We have seen through extensive analysis of the Nordic venture capital market that significant value has been created in companies that are less than 5-6 years old, which means that one has to invest early to be part of these successes. Secondly, from a resource perspective, we noticed that in many successful US early-stage venture capital firms, the investors often had entrepreneurial and technology backgrounds. This was rarely the case in Europe or the Nordic region. That’s why everyone at Creandum has an entrepreneurial background being involved in building and growing start-ups. Some have also worked as business angels before joining Creandum.

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Dopplr Secures Financing From a Star Line-Up

Dopplr, the Helsinki and London based startup, has secured second round financing from a very admirable group of investors including Esther Dyson, Tyler Brûlé, Thomas Glocer, Yat Siu, Aditya dev Sood, Lars Hinrichs, Joshua Schachter, Brian Behlendorf, Ami Hasan, Daniel Sachs, Joshua Cooper Ramo, Kim Weckström, and Azeem Azhar. Saul Klein, who invested in this round, also invested in the previous round together with Martin Varsavsky, Reid Hoffman and Joichi Ito.

“Dopplr is leading the way in intention sharing services online. It is valuable to know where your trusted friends and colleagues will be, and where you could meet them next,” said Lisa Sounio, CEO of Dopplr. “Partner brands on Dopplr will also give you relevant information and offers tailored to you. For example, when you tell Dopplr your plans to go to Hong Kong, you might get the latest intelligence from Monocle and offers from boutique hotels picked by Mr and Mrs Smith.”

Despite seeing a lot of attention from both the press and investors, there are some questions that people look answers for. One cannot miss the (despite somewhat questionable) data from Compete.com. According to Compete.com, Dopplr reached just over 50k UVs in August. If you're making money from commissions on hotel bookings and such, you need a lot more traffic to make the business model work and therefore focusing on such a small group of people travelling so much might be difficult. Furthermore, Mike Butcher at Techcrunch UK makes a solid point about the dilution of ownership with so many investors. It could be that once you get enough popular investors on board, the odds of you failing are smaller as these investors are looking forwards to making a return (hence they echo the name as much as possible).

Having these questions answered would be interesting, but nevertheless you have to give it to the Dopplr team for getting financed in such a tight market - we haven't heard that many similar stories lately.

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Web2People - the Russian YCombinator

I talked a while back to Gleb Kaplun, a Russian investor from St. Petersburg, about their company Web2People. We followed up on that and I got really excited with the possibilities it creates. Web2People is a venture company established to help young innovators start their business with the very basic resources and fundamentals. The focus on the innovation is on Internet services and web applications.

Web2People offers companies the physical office space and resources to get the idea of the ground. Once somewhat in the air, Web2People has mentors and professionals to help the entrepreneurs to make the idea fly. Web2People can help the companies with anywhere from paperwork to contacting investors from Europe to get further financing.

Although, Web2People does not give any funding for these companies, they consider themselves seed stage investors as they provide the basic facilities needed to get the idea off the ground. Thus, they don't see themselves as another incubator without ambitious goals. The first startup centre is located just north of St. Petersburg.

Web2People runs projects divided into 2 sessions and 4 seasons. Each season lasts 3 months and is very specifically documented to create achievable goals and targets. Therefore the co-operation period with Web2People is usually 6 months - the first 3 months being put into growing the product into a prototype and the last 3 months allocated for fund gathering.

All in all, a very interesting concept and a very welcome I suppose with regards to the Russian market where there isn't that much help from the government as we are used to here in the Nordic countries. I'm guessing Gleb will see himself a good pool of interesting ideas to take to the next level.

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Nokia adds $150M to Nokia Growth Partners fund

TechCrunch has the story that Nokia has just added $150M to Nokia Growth Partners fund. The total capital in the fund is at the moment around $250 million. Some of the companies the fund has invested into in the past that have made it are BitBoys (sold for $44M), Global Locate ($143M) and Coding Technologies ($250M).

The focus of the investments, according to TechCrunch, are now in China and India. Not a bad strategy as Nokia hasn't been all that strong in the US, where the iPhone is reaping success.

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MoneyTalks Forum Special

Another Technopolis event coming up is MoneyTalks™ Forum Special on 8th of May, claimed to be the largest investor event in Finland during the spring of 2008. The event is invitation-only and targeted to VCs, business angels and promising high-tech & innovation based start-ups seeking financing. Companies interested in pitching in the event should check for further information.

The bi-annual special event promises to feature the rising stars of the Finnish high-tech scene and prominent early stage investors from Finland and abroad. Participants should have plenty of opportunities for one-one-one meetings with investors and entrepreneurs.

Photo by cpalmieri.

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Arctic Startup secures funding

We’re funded!Being the founder of the blog, I'm very very glad to announce that we have secured funding from two Finnish venture capitalists. The money will be used to hire a full time blogger and expand the services overseas to other Scandinavian countries. We are still in talks of publishing the two private investors in the near future.

We're thrilled of course, needless to say. However, we won't be selling this blog so the focus will be kept critical and analytical in the future as well. The blog was started in 2007 with a suspicion that I will have time to continue writing it. Soon it gathered momentum and I had sort of an obligation from the fans and companies to continue on the track I've chosen. With this funding I see that our efforts have not been in vain.

A huge thanks to all the readers and companies involved - I'm starting of the day with a bottle of champagne :)

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Eniram takes in a significant boost from Conor Venture Partners

EniramEniram received a major investment from Conor Venture Partners earlier this month. The exact amount was not disclosed, but it's believed to be around €1 million (major by Finnish standards). The purpose of the investment is to strengthen Eniram's marketing and sales operations in order to expand globally.

Eniram was founded in 2005 as a spin-off from US-based engineering consultant Edec, which remains a partner to Eniram. Eniram focuses on the maritime industry, providing system integration solutions allowing its customers to save costs and lower emissions through lower fuel consumption. The team reportedly has a great deal of knowledge of the industry and software development. The rumor also has it that Pekka Roine from Conor joined Eniram's board, bringing the company extensive experience of running technology and software business.

Press release.

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Launching soon: global business angel community First Line Angel Group

FLAGFirst Line Angel Group FLAG.fi, a Finnish business angel community with a global reach, is launching on 25-26th of February 2008 at EU EASY Event in Milano, Italy. FLAG.fi is stated to be the the first and only global portal dedicated to investors, entrepreneurs, and business angels.

The founder Peter Bougdanos, a well-acclaimed business angel, hopes FLAG will be "a solution to the startup situation in Finland and all over Europe". The problem statement manifests that many entrepreneurs and opportunities go unnoticed and/or unfunded in Finland - and also in Europe in general - because of a lack of a true angel community, consensus, support, and meaningful interaction among professionals in the field. This is something that was also identified recently in Growth Forum 08 as reported by Tomi. In addition many investors get caught up in long exit cycles, ending up tying up their valuable resources of time, money, and expertise.

The vision of FLAG is to become the first true Angel Group in Finland which mirrors the activities of angel groups in the USA. It's mission is to make Finland, Finnish companies, Finnish business angels, and the Finnish venture capital industry a healthy, competitive, and interactive community. FLAG targets to create a currently missing dynamic forum with both a professional and social function for business angels to meet and discuss angel investments. Peter Bougdanos aims to promote Finnish startups and help them "get the commercialization and business concept traction that many fail to do". Recent members of FLAG include online business traveller tool Dopplr and free news service forum ampparit.com.

The service will be Finland centric, but it's claimed that already over 3000 pan-European interested members have been identified, and the majority of them have expressed keen interest to enroll. FLAG also looks to integrate Middle Eastern and Asian flare of active members. It is planned to be the melting pot for existing angel associations, stand-alone organizations, network clusters, and independent actors on local, regional, and international levels, operating both online and offline.

FLAG will offer a whole community universe for connecting investors, with a wide spectrum of tools and services, including facilitating selling of companies angel-to-angel, and providing company information and management bios. FLAG also believes in giving back to the community and 25 percent of profits will go to funding stipends for young students, lower income families' teens, and budding entrepreneurs to gain international experience, overseas exposure and professional and academics skills.

Greek American Bougdanos has helped to foster nearly 50 startups in Finland, since moving from NYC after surviving 9/11/2001. His background includes investments in companies like Google, Skype, and Finnish Helmi Technologies, Nordic Koivu, FogScreen, Concilio Networks, and Trackway, among many others. Peter is also a founding partner of FirstRound Startup Center, which has a unique smart money approach to incubating fast track early stage companies.

It is great to see something of this scale being initiated in Finland, and hopefully FLAG will be able to give rise to new business angels activity and many new fast growing firms. If you're interested in joining FLAG, be sure to check the web page.

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Edit: I have heard there are some two-fold opinions on how Mr. Bougdanos works, so it's advisable that you first discuss with people who have worked with him before jumping right in, to make sure there is a good match (as would be good with any new relationship in general).

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Axel Technologies Gets Venture Funding

Nexit VenturesNexit Ventures, a venture capital firm stating to offer Nordic mobile companies a bridge to Silicon Valley markets, has announced an investment in Axel Technologies, a Finnish developer of mobile TV technologies. Other investor in the funding round led by Nexit is the company’s existing investor, a government-owned investment company Finnish Industry Investment Ltd. According to ITviikko the round was worth over one million euros.

Axel TechnologiesAxel Technologies will use the financing to growth and internationalization, focus being on developing sales, marketing, and customer support.

The company provides mobile TV middleware and client solutions, and is targeting to get on the wave of first commercial digital mobile DVB-H standard TV services expected to be launched in Europe during 2008. So far there have been only 3G-based services available.

According to Pekka Salonoja, General Partner, Nexit Ventures, Axel Technologies is already one of top five developers of mobile TV middleware globally, customers including AMD and Thomson. Potential clients for the firm are mobile phone manufacturers, semiconductor suppliers, and mobile operators.

Nexit Ventures' press release.

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