1/2018 startups, accelerators and role of tekes – evaluation report

117 Pages·2017·2.78 MB·English

REPORT 1/2018
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STARTUPS,
ACCELERATORS
AND ROLE OF
TEKES
EVALUATION REPORT
Halme, K., Salminen, V., Wiikeri, J. (4FRONT Oy);
Rouvinen, P., Kotiranta, A., Pajarinen, M. (Etlatieto Oy);
Barge, B., Walker, A., Miller, C. (The Evidence Network Inc);
Borella, P. (Boro Ltd), Autio, E. (Idea Group LLP)
Disclaimer:
This evaluation was commissioned by Tekes – The Finnish Funding Agency for
Innovation to Forefront Oy and carried out by the evaluation team comprised
of 4Front Oy., Etlatieto Ltd., The Evidence Net work Inc., Boro Ltd, and IDEA
Group LLP. This report is the product of the authors, and responsibility for the
accuracy of the data included in this report rests with the authors. The findings,
interpretations, and conclusions presented in this report do not necessarily
reflect the views of Tekes.
ISSN 1797-7339
ISBN 978-952-457-635-2
Cover photo: Mikael Ahlfors
Graphic design: Maria Singh
Page layout: DTPage Oy
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TABLE OF CONTENTS
FOREWORD ........................................................................................4 4 TEKES IMPACT ON ACCELERATOR MARKET ............................85
ACRONYMS AND ABBREVIATIONS ..................................................5 Finnish accelerator market and the VIGO programme .............85
SUMMARY ..........................................................................................6 Performance of the VIGO accelerators .....................................94
TIIVISTELMÄ ....................................................................................9 5 CONCLUSIONS AND RECOMMENDATIONS .............................102
1 INTRODUCTION ........................................................................12 REFERENCES .................................................................................113
Background and Objectives of the Evaluation ..........................12 APPENDICES
Approach and Methodology ......................................................14 1 Tekes impact model .........................................................116
2 FINNISH STARTUP ECOSYSTEM AND TEKES ..........................17 2 List of interviews ..............................................................117
Startups and the evolution of startup policies .........................17
Evolution of the Finnish startup ecosystem .............................24 Annexes to the main report:
Tekes activities in the startup ecosystem ................................29 Annex report 1. Extended survey report (by The Evidence Network Inc.)
Annex report 2. How to benchmark accelerators and other Business
Summary of previous evaluations of Tekes startup
Support Programs? (by The Evidence Network Inc.)
and accelerator activities ..........................................................35
3 TEKES IMPACT ON STARTUPS ................................................40
Evidence from econometric analyses ......................................40
Evidence from the surveys........................................................61
NIY experiences & spill-overs – evidence from interviews .......78
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FOREWORD
Start-up companies has several dynamic effects in eco- the gap between early stage technology firms and interna-
nomic renewal. The national start-up business environ- tional venture funding. the Vigo Programme in 2009.
ment has developed significantly over the last ten years. As of January 2018, Finpro – the Finnish trade pro-
Finland offers a good innovation environment to start- motion organization – and Tekes – the Finnish Funding
ups and growth-oriented businesses. It is remarked that Agency for Innovation – have been united as Business
Finland has improved its relative position especially in Finland. This change gives more opportunities for start-
entrepreneurial culture, and Finland is now one of the ups to grow internationally.
best performing countries for example in R&D activity Well-functioning innovation environment for start-
and patents. ups and accelerators help business activities to grow by
The majority of startups use Tekes funding to gain a bringing radical innovations to the economy. Such de-
deeper knowledge of international markets, collect cus- velopment expand innovation activities to new business
tomer feedback, and develop their teams and the first fields. A goal for this impact study was to find the im-
versions of their products. The most promising compa- pact effects for 1) Tekes-funded start-ups; 2) Tekes NIY
nies may be selected to the Young Innovative Compa- funding; 3) Accelerators Market in Finland and VIGO.
ny (NIY) funding scheme, which helps them to rapidly The main question of the evaluation therefore was how
expand into international markets. Funding is primarily Tekes activities for start-ups have improved their suc-
awarded for the development of business activities. It cess in the global market.
can be used to strengthen a team, to develop a business This impact study was carried out by the evaluation
model and growth strategy, and to open up new markets. team from 4Front Ltd., Etlatieto Ltd., The Evidence Net-
Tekes has been active in operating with VIGO acceler- work Inc., Boro Oy and IDEA Group LLP. Business Fin-
ator, which was active 6 years (2009-2015) launched by land wishes to thank the writers for their thorough and
The Finnish Ministry of Employment and Economy. Tekes systematic approach. Business Finland expresses its
carried out the programme and monitored a coordinator, gratitude to steering group and all others that have con-
which made possible a co-operation between contact per- tributed to the study.
sons, portfolio companies and accelerators. Vigo was a new
Helsinki, February 2018
type of acceleration program designed to complement the
Finnish innovation ecosystem. The programme bridged Business Finland
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ACRONYMS AND ABBREVIATIONS
B2B Business-to-Business
CAGR Compound Annual Growth Rate
CEM Coarsened Exact Matching
DID Difference-in-differences analysis
ETLA Economic Research Institute of Finland
FDI Foreign Direct Investment
FIBAN Finnish Business Angel Network
FINAC Finnish Business Acceleration Network
GEI Global Entrepreneurship Index
HGF High Growth Firm
ICT Information and Communication Technologies
IPO Initial Public Offering
MEE Ministry of Employment and the Economy
NIY Nuoret innovatiiviset yritykset (Young Innovative Companies, YIC)
OECD Organisation of Economic Cooperation and Development
R&D Research and Development
SME Small and Medium-sized Enterprise
Tekes The Finnish Funding Agency for Innovation (2018=Business Finland)
TEN The Evidence Network Inc.
VAINU Vainu.io software
VC Venture Capital
VIGO VIGO Accelerator
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SUMMARY
This evaluation provided an assessment of the role of effect’, i.e., that it is not simply that Tekes is able to
Tekes activities in the Finnish startup-ecosystem as well pick better companies to fund but also that its fund-
as provide recommendations on how Tekes can improve ing has some positive causal effect on startup per-
its impact on the Finnish startup and accelerator eco- formance. The survival rates of Tekes startups and
system. The evaluation focused on Tekes R&D funding counterparts are largely similar, although the Tekes
for startups, NIY programme and the VIGO programme. startups have higher dispersion of growth outcomes
The evaluation utilised several different methods and (vs non-treated counterparts), which is consistent
approaches, including econometric analyses, web-based with desired risk-taking by Tekes.
surveys, interviews and case-studies. • Tekes funding has complemented private VC
The evaluation concluded that, although the start- funding. The findings from econometric analyses,
up ecosystem has developed largely independent of in line with previous studies, suggest that Tekes
Tekes, its role in catalysing and shaping the startup funding complements private VC funding.
ecosystem should not be neglected. Tekes (Business • Tekes has boosted startups’ capabilities and
Finland) remains an important ‘feeder’ and its main ac- growth. Findings from the surveys suggest that
tivities are highly relevant tools to support the startup Tekes funding has had significant positive impact
ecosystem also in the near future. Tekes should main- on startups’ capabilities and performance. NIY pro-
tain its role as a ‘feeder’ instead of a ‘leader’ in the eco- gramme participants attribute the most impact on
system. In addition, there could be an opportunity for their ability in getting into international markets
strengthening the ‘facilitator’ role in the future. and capacity to raise capital. Other startups attri-
bute greatest impact on their improved R&D activ-
Regarding Tekes impact on startups, the evaluation ities and product/service offerings.
concluded that: • Less significant impact on networking and link-
• Tekes funding has had a clear positive impact on ages. The survey findings indicate that the impact
startup growth. Evidence from econometric analy- on companies’ networks and linkages has been less
ses suggests that there is impact beyond ‘selection significant than on other capabilities. This suggest
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that there is an opportunity to further improve the Regarding Tekes impact on the accelerator market,
impact on networking and linkages with different the evaluation concludes that:
forms of non-financial support. • Finnish ‘accelerator market’ is diverse and het-
• Increased impact with non-financial support. erogeneous, corporate venturing important
Companies that use non-financial support (e.g. trend – no major interventions needed. All in
mentoring, advisory or networking) to a greater all, the analysis suggests that the accelerator / ear-
degree attribute higher average impact to Tekes ly stage VC market is shaping up and several pri-
on improvements to their capabilities and perfor- vate sector actors have emerged. Especially corpo-
mance. However, most companies only used non-fi- rate venturing/acceleration appears as an important
nancial support offerings to a low degree, or did not trend. Currently it seems that there is no rationale
use them at all. for new major public intervention to boost it. Howev-
• NIY flexible but room for improvement. NIY er, further knowledge transfer and facilitation would
funding was praised especially for its suitability to help to develop the ecosystem.
commercialisation and scaling up the business in- • Despite its limitations, VIGO has catalysed the
ternationally. The companies, in general, also seem accelerator market. The interviews and analysis of
to value the NIY funding process and the mandato- VIGO founders suggest that the VIGO programme –
ry ‘milestones’ which help in crystallising goals and despite its apparent and widely acknowledged flaws
business plans. However, there is also room to fur- – has had a clear (although limited) role in catalys-
ther improve the flexibility of the NIY programme ing the Finnish accelerator and early stage VC mar-
by, for example, better allowing rapid pivoting and ket. It seems that the positive outcomes are largely a
reallocations of the funding. result of active entrepreneurs’ own activities, and the
• Despite good results, broadening the NIY scope role of the VIGO programme was limited but not in-
not feasible. It seems that increasing the number significant. VIGO programme helped to build experi-
of companies would mean that lower quality startups ence to the Finnish early stage VC investment market
would be accepted, i.e., the programme can probably ecosystem and provided valuable learnings and ex-
only grow as the population of aspiring startups in periences of different models.
Finland grow in years to come.
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• VIGO accelerators have contributed to the emer- 2. More attention to linkages and spill-over effects.
gence of high growth ventures. Despite some lim- In order to improve its broader economic and social
itations, the analysis of the VIGO accelerators’ port- impact, and in line with the first recommendation,
folio companies suggest that VIGO accelerators have Tekes (and Business Finland) should put more at-
contributed to the emergence of new high-growth tention on directly promoting the spill-over effects
companies in Finland – although with mixed results. of its funding services (i.e. promoting the transfer
of knowledge, technologies, talent, etc. in the start-
The following recommendations are given for Tekes up ecosystem).
(and Business Finland) in order to further develop the 3. Fine-tune existing products and services – and
Finnish startup ecosystem and to boost startup devel- keep exploring new ones. Tekes’ main instru-
opment. The recommendations are elaborated in more ments for startups seem to be working reasonably
detail in the main report. well. However, there is some room for further adjust-
1. Adopt stronger role as ‘facilitator’ and better syn- ments and improvements as well as exploring new
chronise activities with other actors. Tekes should kinds of products and services. These are elaborated
maintain its strong ‘feeder’ role in the startup ecosys- in more detail in the main report.
tem by providing funding and other support for the 4. Explore more market-driven selection process-
most potential Finnish startups. At the same time, es. Acknowledging Tekes’ important ‘gate-keeping’
Tekes (as part of Business Finland) should explore role in the startup ecosystem and the importance
options for improving its role as a ‘facilitator’, for ex- of company selection in Tekes impact model, Tekes
ample by increasing knowledge transfer, making the should explore and experiment more market-driven
ecosystem more transparent, facilitating policy level selection processes. This could mean for example
discussion on ecosystem bottlenecks and strength- strengthening the NIY expert panel review process
ening linkages to leading startup ecosystems. Tekes (for example by extending the expert pool with inter-
should also better synchronise its startup activities national industry experts); exploring the opportuni-
with other ecosystem actors such as accelerators, VCs ties of using artificial intelligence for making fund-
and startup communities. Tekes should also consider ing decisions; and putting more weight on private
utilising more challenge-driven approaches and bet- investor involvement in startups when making the
ter aligning its startup activities with societal chal- funding decisions.
lenges, for example by allocating larger share of the
startup funding through challenge competitions or
other challenge-driven funding instruments.
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TIIVISTELMÄ
Tämä arviointi on tuottanut tietoa Tekesin roolista ja vain siihen, että Tekes valitsisi parempia yrityksiä
vaikutuksista Suomen startup-ekosysteemissä, sekä rahoituksen piiriin, vaan myös rahoituksen kausaali-
esittää suosituksia Tekesin (Business Finlandin) vai- seen vaikutukseen startup-yritysten kasvuun. Lisäk-
kuttavuuden lisäämiseksi. Arvioinnissa tarkasteltiin si Tekesin rahoittamien startupien toteutunut me-
erityisesti Tekesin startupeille suunnatun t&k-rahoi- nestys vaihtelee vertailuryhmän yrityksiä enemmän,
tuksen, NIY-ohjelman ja VIGO ohjelman vaikuttavuut- mikä viittaa oikeansuuntaiseen riskinottoon rahoi-
ta. Arvioinnissa hyödynnettiin useita menetelmiä ja tettavien hankkeiden valinnassa.
lähestymistapoja, mukaan lukien ekonometrisia ana- • Tekesin rahoitus on täydentänyt yksityistä VC-ra-
lyyseja, sähköisiä kyselyitä, haastatteluita ja tapaus- hoitusta. Ekonometristen analyysien perusteella
tutkimuksia. Tekesin rahoitus täydentää yksityistä VC rahoitus-
Arviointi toteaa, että vaikka Suomen startup-ekosys- ta. Tulokset ovat linjassa aikaisempien tutkimusten
teemin viimeaikainen kehitys on ollut suurelta osin riip- kanssa.
pumatonta Tekesistä, on Tekesillä kuitenkin ollut selkeä • Tekesin rahoitus on vahvistanut startupien ky-
ja tärkeä rooli ekosysteemin perustan rakentamisessa vykkyyksiä ja sitä kautta yritysten kasvua. Ky-
ja potentiaalisimpien yritysten kehityksen vauhdittami- selytulosten perusteella Tekesin rahoituksella on
sessa. Tälle roolille on kysyntää jatkossakin. Lisäksi Te- ollut merkittävä positiivinen vaikutus startup-yri-
kesin (Business Finlandin) aiempaa aktiivisempi rooli tysten kyvykkyyksiin ja menestykseen. NIY-ohjel-
eri toimijoiden välisen yhteistyön fasilitoinnissa on ar- maan osallistuneet yritykset arvioivat vaikutusten
vioinnin perusteella perusteltu. olevan suurimmat markkinoille pääsyyn ja rahoi-
tuksen hankintaan liittyviin kyvykkyyksiin. Muut
Startup-yrityksiin kohdistuneiden vaikutusten osal- startupit arvioivat vaikutusten olevan suurimmat
ta arviointi toteaa seuraavaa: t&k-toimintaan ja tuote- tai palvelutarjontaan liit-
• Tekesin rahoituksella on ollut selvä positiivinen tyviin kyvykkyyksiin.
vaikutus startup-yritysten kasvuun. Ekonometris-
ten analyysien perusteella tämä vaikutus ei perustu
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• Verkostoihin liittyvät vaikutukset ovat kuiten- NIY-rahoituksen volyymi voi kasvaa vain korkean
kin olleet vähäisempiä. Kyselyaineiston perusteel- potentiaalin startup-yritysten määrän kasvaessa.
la Tekesin rahoituksen vaikutus yritysten verkos-
toihin ovat vähäisempiä kuin vaikutukset muihin Kiihdyttämökenttään kohdistuvien vaikutusten osal-
kyvykkyyksiin. Tämän perusteella Tekesin rahoituk- ta arviointi toteaa seuraavaa:
sen vaikuttavuutta on mahdollista parantaa vahvis- • Suomalainen kiihdyttämökenttä on monimuotoi-
tamalla verkostoihin liittyvää ei-rahallista tukea. nen ja hajanainen − uusille merkittäville julkisil-
• Ei-rahallinen tuki vahvistaa vaikutuksia. Kysely- le interventioille ei tarvetta. Analyysin perusteella
aineiston perusteella yritykset, jotka ovat hyödyn- suomalainen kiihdyttämö- ja/tai varhaisen vaiheen
täneet sekä rahallista että ei-rahallista tukea (esim. VC-markkina on kehittymissä, ja alalle on syntynyt
mentorointi, verkostoituminen) muita enemmän, myös yksityisiä toimijoita. Suurten yritysten star-
arvioivat vaikutukset suurimmiksi. Suurin osa yri- tup-toiminta (ns. corporate venturing) näyttäytyy
tyksistä on kuitenkin hyödyntänyt ei-rahallista tu- nousevana trendinä, joka on syytä huomioida. Täl-
kea vain vähän tai ei lainkaan. lä hetkellä ei näyttäisi kuitenkaan olevan perusteita
• NIY-rahoitus on joustava ja toimiva rahoitus- merkittäville uusille julkisille interventioille tai toi-
muoto, mutta parannettavaakin löytyy. Yritykset menpiteille. Tiedonvaihdon lisääminen ja vahvem-
pitävät NIY-rahoitusta erityisen toimivana instru- pi yhteistyön fasilitointi voisi kuitenkin edistää eko-
menttina liiketoiminnan skaalausvaiheeseen. Lisäk- systeemin kehitystä.
si yritykset pitävät rahoitusprosessia ja siihen liitty- • Selvistä puutteistaan huolimatta, VIGO-ohjelma
viä välietappeja toimivana käytäntönä tavoitteiden on ”katalysoinut” kiihdyttämökenttää. Arvioin-
ja suunnitelmien täsmentämiseen. NIY-rahoitusta nin perusteella VIGO-ohjelmalla oli − selvistä ja ylei-
toivotaan kuitenkin kehitettävän siihen suuntaan, sesti tunnistetuista “valuvioista” huolimatta − selvä
että se mahdollistaisi nykyistä paremmin ”pivotoin- rooli suomalaisen kiihdyttämömarkkinan kehittämi-
nin” ja suunnitelmien nopeat muutokset rahoitus- sessä. Kehitys vaikuttaisi suurelta osin perustuvan
kauden aikana. yksittäisten yrittäjien ja aktiivisten yksilöiden roo-
• NIY-rahoituksen laajentaminen ei suositeltavaa liin, VIGO-ohjelman roolin jäädessä rajalliseksi. Oh-
hyvistä tuloksista huolimatta. Aineiston perus- jelma kuitenkin auttoi rakentamaan kiihdyttämö- ja
teella näyttäisi siltä, että NIY-rahoituksen laajen- varhaisen vaiheen VC-toimintaan liittyvää osaamis-
taminen johtaisi siihen, että mukaan pääsisi myös ta ja toi arvokkaita oppeja erilaisista malleista ja toi-
heikomman potentiaalin yrityksiä. Toisin sanoen mintavoista.