i2m - Ideas to market, a UK based research firm, has released some very interesting figures in terms of startup financing, according to Sun Startup Essential Blogs. They have researched some 800 entrepreneurs and small business owners over a variety of areas.

The key findings of the financial research has shown that about 40% of startups seek under 10,000 GBP to become profitable while 30% seek between 10,000 and 100,000 GBP to become profitable. Only about 15% of startups seek more than 100,000 GBP to become profitable.

In the findings, Permjot Valia, a business angel and member of the British Business Angel Association describes that the engine of Britain’s entrepreneurial industry is friends and family. If you take this thinking to the Nordics, I’d say the results would be tilted towards the 100k€ mark.

This of course raises questions of other sorts - are we really able to bootstrap up here? Do we take the financial status for granted and regard that something as of a given right even in a startup? Provocative questions to ask, but what are your thoughts - which category would you reckon would be the largest in your home country?

Photo by jenn_jenn.

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)

The 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.

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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