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Access to capital is an essential part of companies' growth story, and we will use our experience and network of investors to help get the funding you need.
There are different funding opportunities according to the start-up phases:
2. Bargaining stage. The business plan is thoroughly studied. Some form of due diligence is also completed. A key issue is how much an angel should expect to receive for varying levels of investment.
3. Value creation stage. In addition to providing the much–needed capital, most angel investors assume the role of advisors in the start-up. They can help the entrepreneur with contacts and with advice on how to run the company. Many angel investors take full–time or part–time jobs in companies they invest in.
4. Exit stage. Most angel investors do not specify a particular exit mechanism. Usually, what they want to see is a company that is run professionally enough to create value.
Venture capitalists are a type of private equity investors that pull together assets from institutional investors and invest them into new, innovative and fast-growing start-up companies that cannot receive financing from other sources.
Venture capital can be provided through two types of financial arrangements: milestone financing (full financing) or round financing. Milestone financing is where the VC firm contractually commits to providing all capital upfront, provided specific financial and non-financial hurdles are met. Round financing involves the staging of capital, where a smaller pool of capital is provided for a specific stage or round of financing.
Venture financing usually takes place in “rounds,” which have traditionally had names and a specific order. First comes a seed round, then a Series A, then a Series B, then a Series C, and so on to acquisition or IPO. None of these rounds are required and, for example, sometimes companies will start with a Series A financing.
UnitedAngels VC - Pre-seed to A-round investments.
Superangel - Early stage investments.
Karma Ventures - Late seed and A round investments.
SmartCap - Early stage investments.
ContriberVentures - Investing into NewNordic teams.
Change Ventures - Seed stage investments.
SEB Venture Capital - FinTech investments.
Tera Ventures - Seed and early stage investments.
Trind VC - Seed investments, focus on ICT.
Lemonade Stand - Early stage tech startup investments.
Crowdfunding is an emerging source of financing involving open calls to the public, generally via the internet, to finance projects through donations, monetary contributions in exchange for a reward, product pre-ordering, lending, or investment.
Equity crowdfunding is becoming more of a real substitute to traditional equity financing for start-ups. The primary target investors of start-ups on equity crowdfunding platforms are often unsophisticated investors. Unsophisticated investors do not have the expertise to comprehensively research and evaluate potential investments, and as their invested amount typically is small, their cost of doing so could quickly surpass the benefit.
Fundwise - Equity crowdfunding.
Estateguru - Real estate crowdfunding.
Funderbeam - Equity crowdfunding.
Heateo haridusfond - Grants for education.
InnoEnergy - Innovation engine for sustainable energy across Europe. Invest at every stage.
Estonian Research Council - Making investments in the field of ICT, health technologies or resource efficient management.
United Partners - Investments and finance advisory.
There are different funding opportunities according to the start-up phases:
Seed and angel financings
Angel investment concerns mainly seed and early stage companies, including young companies that are beyond the start-up phase, but need capital to develop their product or business strategy. The main investment targets for angel investors are start-up companies. Generally, angel investors require return rates that are about forty to fifty per cent of their original investment. However, the actual returns of investment vary tremendously and can be much lower. A typical time span of investment can be considered approximately five to ten years. Consequently, in case of angel investment, the entrepreneur must be aware of the angel investor’s preferences of expected returns as well as for how long time they are willing to invest in the start-up company.Stages of angel investment process.
1. Screening stage. Learning about the opportunity and meeting the entrepreneur. Angels usually receive a summary business plan. Angels should also try to understand who the potential acquirers may be for the company in the future. A start-up might demonstrate profitability, have a solid business plan, and be led by an entrepreneur with a proven track record.2. Bargaining stage. The business plan is thoroughly studied. Some form of due diligence is also completed. A key issue is how much an angel should expect to receive for varying levels of investment.
3. Value creation stage. In addition to providing the much–needed capital, most angel investors assume the role of advisors in the start-up. They can help the entrepreneur with contacts and with advice on how to run the company. Many angel investors take full–time or part–time jobs in companies they invest in.
4. Exit stage. Most angel investors do not specify a particular exit mechanism. Usually, what they want to see is a company that is run professionally enough to create value.
Angel funds in Estonia:
EstBAN - Seed stage investments.Venture financings
Venture capital is early-stage equity funding provided to potentially high-growth companies. Generally, venture capital funding follows after the founders’ self-funding and/or seed-funding stages and is used to facilitate growth, increase scale, and ultimately monetize the investment through the liquidity event. The investor providing the capital receives a portion of the start-up’s equity.Venture capitalists are a type of private equity investors that pull together assets from institutional investors and invest them into new, innovative and fast-growing start-up companies that cannot receive financing from other sources.
Venture capital can be provided through two types of financial arrangements: milestone financing (full financing) or round financing. Milestone financing is where the VC firm contractually commits to providing all capital upfront, provided specific financial and non-financial hurdles are met. Round financing involves the staging of capital, where a smaller pool of capital is provided for a specific stage or round of financing.
Venture financing usually takes place in “rounds,” which have traditionally had names and a specific order. First comes a seed round, then a Series A, then a Series B, then a Series C, and so on to acquisition or IPO. None of these rounds are required and, for example, sometimes companies will start with a Series A financing.
Venture capital financing stages:
- Early stage (A-round). This is the first round in which a VC firm provides capital. On average, the amount of capital provided in the A-round varies between USD 1mn and USD 5mn, which is expected to finance the company between 6 months to 2 years.
- Mid stage. The key objective of this round is to convert top-line growth into profits.
- Late stage. Occurs after the A-round and B-round when a company has produced consistent sales, revenue growth, and profits and there is visibility into an exit.
- Exit stage. Company exits in the VC industry can occur through three primary avenues: IPO; acquisition by a financial buyer; acquisition by a trade buyer.
VC funds in Estonia:
EstVCA - The representative body of Private Equity & Venture Capital Industry in Estonia.UnitedAngels VC - Pre-seed to A-round investments.
Superangel - Early stage investments.
Karma Ventures - Late seed and A round investments.
SmartCap - Early stage investments.
ContriberVentures - Investing into NewNordic teams.
Change Ventures - Seed stage investments.
SEB Venture Capital - FinTech investments.
Tera Ventures - Seed and early stage investments.
Trind VC - Seed investments, focus on ICT.
Lemonade Stand - Early stage tech startup investments.
Crowdfunding
Crowdfunding is the use of small amounts of capital from a large number of individuals to finance a new business venture. Crowdfunding makes use of the easy accessibility of vast networks of people through social media and crowdfunding websites to bring investors and entrepreneurs together.Crowdfunding is an emerging source of financing involving open calls to the public, generally via the internet, to finance projects through donations, monetary contributions in exchange for a reward, product pre-ordering, lending, or investment.
Equity crowdfunding is becoming more of a real substitute to traditional equity financing for start-ups. The primary target investors of start-ups on equity crowdfunding platforms are often unsophisticated investors. Unsophisticated investors do not have the expertise to comprehensively research and evaluate potential investments, and as their invested amount typically is small, their cost of doing so could quickly surpass the benefit.
Crowdfunding companies in Estonia:
Crowdestate - Real estate crowdfunding.Fundwise - Equity crowdfunding.
Estateguru - Real estate crowdfunding.
Funderbeam - Equity crowdfunding.
Other investment funds in Estonia:
LIFT99 - RocketFuel (€1000) scholarship. Pre-seed investments.Heateo haridusfond - Grants for education.
InnoEnergy - Innovation engine for sustainable energy across Europe. Invest at every stage.
Estonian Research Council - Making investments in the field of ICT, health technologies or resource efficient management.
United Partners - Investments and finance advisory.