In June 2023, our partner organisation Finnish Business Angels Network (FiBAN) sent a startup survey which received answers from 90 startup entrepreneurs. Learn more about the survey highlights, such as reasons to seek angel funding and insights on application diversity.
Startups seek more than just funding from business angels – diversity, clearer instructions, and more thorough feedback are requested.
Last June, FiBAN sent a startup survey which received answers from 90 startup entrepreneurs who have sought funding through the Finnish Business Angels Network.
80% of the respondents stated that, in addition to seeking funding, they also look for industry expertise, networks, and strategic knowledge from angels to support their growth.
Angel investors’ networks are seen as valuable, particularly for internationalization, growth strategy, and commercialization. While the majority of feedback was positive, startup entrepreneurs expressed a desire for increased focus on enhancing diversity, transparency of the evaluation process, and clearer guidance for funding applications.
According to FiBAN’s data, male-dominated teams still prevail: among startup teams seeking angel investment, only 6% are composed solely of women, while 49% are composed solely of men. 45% of the applying teams are mixed teams with both women and men as founders.
Attention to diversity is requested
Among teams that have progressed to the investment negotiation phase, 52% of teams consist only of men. 41% of these teams are composed of individuals of different genders, and 7% are composed solely of women. The negotiation phase is where companies and investors perform due diligence and agree on the terms of investment.
Diversity of teams and ideas are requested by angels too. “More diverse teams also predict better success for startups,” says FiBAN’s CEO Tiina Laisi-Puheloinen.
Validate your business before seeking an investment
However, according to FiBAN’s application data, companies often paint a rosier picture of their situation. Most of the respondents assessed their companies to be in the product’s initial version (MVP/seed), product-market fit, or rapid growth stage (scaling). Only a small fraction considered themselves to be in the ideation phase among the respondents.
A significant portion of companies seeking funding from FiBAN are not yet ready for an investment – the product and idea may be great, but credible numbers are still lacking.
“As an entrepreneur, it’s good to assess your company from the perspective of whether you would invest in it yourself if you were looking at it from an outsider’s point of view”. Moreover, “it’s important that the business has been validated to some extent before investors join in. Angels as well as other investors want evidence of the viability, scalability, and demand. ” Laisi-Puheloinen emphasizes.
Having been a startup entrepreneur herself, she understands the challenges of seeking funding. “Applying is a tough job for every entrepreneur, but I’d encourage you not to give up. Though submitting an application doesn’t guarantee funding, you can always reapply for funding when your business is a bit further”, she adds.
Survey Results Highlights
80% of startups seek more than just funding
- Startups look for industry expertise, networks, and strategic guidance for growth from business angels.
- Angel investors’ networks are seen as valuable for internationalization, growth strategy, and commercialization
Diversity and More Guidance Requested
- Startup entrepreneurs say they wish to see more diversity within the startup ecosystem.
- More clear guidance for the funding process and application are requested.
This recent survey revealed critical insights into startups seeking angel investments. The data emphasizes the demand for more diverse startup ecosystems and clearer funding guidance. Moreover, FiBAN’s CEO, Tiina Laisi-Puheloinen, highlights the importance of validating businesses before seeking investments and encourages persistence in the face of funding challenges.
The survey’s key takeaway: startups aspire for more than just capital; they seek supportive partnerships and a more inclusive entrepreneurial environment.
Stay tuned for more news and updates related to BAKE Project, aimed at enhancing the relationship between entrepreneurs and Business Angels, creating a brighter future for all!