I had a chat in LeWeb with Joi Ito of Neoteny. He is also the CEO of Creative Commons and on board of numerous companies and non profits. Joi, like other investors in LeWeb, are still investing despite the downturn but like he said - it’s easier to make out the better companies from the noise in times of economic crisis. He also has some tips for Nordic and Baltic companies, so do have a look.

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.

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.

Timo Paloheimo has listed a good bunch of Finnish web startups in The Next Web using various sources, including his own blog Startupbin and ArcticStartup. He’s also categorized them quite extensively under different subgroups, including e.g. social networking, e-commerce, business tools, and mobile. The list is likely nowhere complete, though, and there have been some additions already in the comments section in Startupbin.

We at ArcticStartup recognize there isn’t any good way of easily getting comprehensive information about the startups in Finland, or in other Nordic and Baltic countries for that matter, at the moment. That’s why we have been working on Nordic and Baltic wide ‘CrunchBase’, which should come out very soon. Our hope is that a common startup directory will benefit everybody in the industry. Stay tuned, we’ll reveal more soon!