FiBAN's annual angel investments show impact

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FiBAN's annual angel investments show impact

FiBAN's annual study of investments and exits shows the impact of angel investments. FiBAN members care about the societal impact of their investments. The Interim CEO of FiBAN says that private investing happens outside of FiBAN and we reach a significant portion of Finnish angel investors.

Nearly half was invested in new startups.

Finnish angel investors have remained active. The median investment round increased from €250,000 to €290,000 from the previous year, with a total of 791 investment rounds. In Finland, the interest in new companies has been revived after the Pandemic, according to FiBAN chair of the board Kim V is nen.

The median investment size was at the level of 2021, at 20,000 euros. Half of all the investments made through the network are made by less than ten percent of FiBAN's angel investors. They are so-called super angels whose investments range from hundreds of thousands to millions of euro at a time.

Finnish angel investors have backgrounds in leadership, as well as in their own enterprises. Angel investors are the first believers for many startups. Angel investors have extensive experience in leadership and business development. The networks and the desire to develop the companies are what they bring into the startup. That is why angels are often desirable partners for start-ups, says Annukka Mickelsson, Interim CEO of FiBAN.

FiBAN provides training and education for its members to support angel investing. Angel investing often starts with smaller amounts and the amounts grow as experience grows. Previously accumulated wealth is often reinvested in new growth companies. Mickelsson adds that angel investing is important for the whole startup ecosystem.

The number of exits decreased slightly compared to the record year of 2021, when 168 exits were made. There were 122 exits in the year 2022, of which half were acquisitions and one-third were bankruptcies. Bankruptcies remained the same level as in previous years.

Angel investments are long-term commitments that should be evaluated over a longer time rather than annually. Even in difficult times, angels stand by entrepreneurs. V is nen, and we are with the startup for up to a decade.

Exits have changed as various option systems have become more common in large corporate acquisitions. It's become increasingly common to keep the management involved in the transformation after the acquisition, according to Mickelsson.

The expected range of returns on investment is very broad compared to stock investing. However, high-return exits are rare, but an individual exit in Finland can have a return on investment up to 100 x. A third of angel investments usually drop to zero, but in some cases the value of investment can be extremely high. The profits are often reinvested in startups after taxes, says Mickelsson.

The high valuations of early 2022 manifested as a temporary increase in profitability. At the beginning of the year, valuations were high, and exits were larger than usual. These temporarily showed as an increase in exit values, according to Mickelsson.