Entrepreneurship and venture capital market in Finland

International Journal of Entrepreneurship and Innovation Management

Volumn 1, Issue 2, 2001, Pages 194-216

  Virtanen, Markku ^a  

^a Building Services and Material Technology   (Finland)

Author keywords

Entrepreneurship; Finland; new ventures; risk financing; venture capital; venture capital market

Indexed keywords

EID: 70349827094     PISSN: 1368275X     EISSN: 17415098     Source Type: Journal    
DOI: 10.1504/IJEIM.2001.000453     Document Type: Article

References (36)

1. This paper is a revised and updated combination of two earlier papers: (1)
2. Koskinen, A. and Virtanen, M. (1998) ‘Scandinavia: Finland’, in A. Morrison (Ed.) Entrepreneurship: An International Perspective, Oxford: Butterworth-Heinemann; and (2)
3. Virtanen M. ‘Risk financing and venture capital market in Finland’, in Proceedings of the First Finnish SME Research Forum, Turku School of Economics.
4. Lumme, A, Relander, K.-E. and McGrath, R.G. (1995) ‘The determinants and barriers to rent expectations in the most promising technology-based growth ventures in Finland. Empirical evidence from a nation-wide study’, Paper presented in EFER 6th Conference: Europe’s 500 Roundtable of European Entrepreneurs. Restoring Growth and Employment through Dynamic Entrepreneurs, DeVlerick School voor Management, Gent, Belgium.
5. Bruno, A.V. and Tyebjee, T.T. (1982) ‘The environment for entrepreneurship’, In C.A. Kent, D. Sexton and K. Vesper, Encyclopedia of Entrepreneurship, Prentice Hall, pp.289–307
6. Yritykset/Enterprises 1997:3. The figures are all based on enterprise data of Statistics Finland.
7. Koskinen, A. and Virtanen, M. (1998) ‘Scandinavia: Finland’, in A. Morrison (Ed.) Entrepreneurship: An International Perspective, Oxford: Butterworth-Heinemann.
8. Kelly, P. (1998) ‘Financing start-ups: the US and UK experience’, Presentation in Innonet Enterprise Conference, Innopoli, Finland, January 1998.
9. Morrison, A., Rimmington, M. and Williamson, C. (1998) Entrepreneurship in the Hospitality, Tourism and Leisure Industries, Oxford: Butterworh-Heinemann.
10. Busenitz, L. and Lau, C.-H. (1996) ‘A cross-cultural cognitive model of new venture creation’, Entrepreneurship, Theory and Practice, Vol. 20, No. 4.
11. Koskinen, A. (1995) Yrittäjyyden prosessin synty. Yrittäjien orientaatio ja uranvalinta (The birth of entrepreneurship process. Entrepreneurs’ orientation and career choice.) Helsingin kauppakorkeakoulun Pienyrityskeskuksen julkaisuja M-73, Helsinki.
12. Koskinen, A. (1986) Starttiyrittäjät ja yritystoiminnan käynnistäminen (Start-up entrepreneurs and starting of the business.) Työvoimapoliittisia tutkimuksia Nro 66, Suunnitteluosasto, Työvoimaministeriö, Helsinki.
13. Committee Report (1996)
14. Koiranen, M., Hyrsky, K. and Tuunanen, M. (1998) ‘Innovativeness and risk taking propensity: a comparative study on Finnish and US entrepreneurs, small business owners and managers’, in Virtanen, M. (Ed.) Proceedings of the Conference on Growth and Job Creation in SMEs, Helsinki School of Economics and Business Administration. Small Business Center, M-80. pp.115 – 137.
15. These companies are members of the Finnish Venturing Association.
16. Finnish Venture Capital Association (1997).
17. Finnish Venture Capital Association (1995).
18. Finnish Venture Capital Association (1996).
19. In some countries banks are not allowed to participate in the venture capital market.
20. Authorized venture capital means the total amount of money which investors promise to invest in a venture capital company. The total amount of funds may be governed by the venture capital company or it may be governed by the investor as long as it will be needed as an investment in portfolio companies.
21. Classification of venture capital companies have been changed in 1997 by including some investment companies as venture capital firms. Thus the sum of the stock of authorized capital plus new authorizations is not equal to the total authorization.
22. New investments here include all the investments, i.e. also second and late-round investments.
23. In 1996 captive funds of banks and private funds invested FIM 356 million (71%), public funds FIM 117 million (23%) and regional funds FIM 31 million (6%).
24. Ruhnka, J.C. and Young, J.E. (1987) ‘A venture capital model of the development process for new ventures’, Journal of Business Venturing, 2, pp.167–184
25. Naughton, R.M. (1991) ‘Venture capital: the developing literature’, in M.B. Green (Ed.) Venture Capital: International Comparisons, London: Routledge.
26. Abetti, P.A. (1992) ‘Planning and building the infrastructure for technological entrepreneurship’, Int. J. Technology Management, Special Issue on Strengthening Corporate and National Competitiveness through Technology, pp.129–139.
27. Miller, R. and Cole, M. (1987) Building the Next Silicon Valley, Lexington, MA: C.S. Heath.
28. SVH Coopers and Lybrand (1998) The Economic Impact of Venture Capital in Europe, and EVCA’s www-pages.
29. Wetzel, W.E. Jr. (1982) ‘Risk capital research’, in C.A. Kent, D. Sexton and K. Vesper, Encyclopedia of Entrepreneurship, Prentice Hall.
30. Mason, C. and Harrison, R. (1992) ‘The supply of equity finance in the U.K.: a strategy for closing the equity gap’, Entrepreneurship and Regional Development, 4, pp.357–380.
31. SITRA is an acronym for The Fund of Finnish Independence. In addition to activities of promoting the Finnish economy and technical development it acts as a venture capitalist. SITRA has been a pioneer in the Finnish venture capital market.
32. Suomi, M. and Lumme, A. (1994) Yksityishenkilöiden pääomasijoittaminen Suomessa. (In Finnish with English summary: Informal venture capital in Finland.) SITRA 141, Helsinki.
33. Landström, H. (1993) ‘Informal risk capital in Sweden and some international comparisons’, Journal of Business Venturing, 8, pp.525–540.
34. Suomi and Lumme [30, p.57] emphasize that the reliability of this estimate is questionable but give as a benchmark quite similar figures from Scotland where the size of population is equal to Finland.
35. Hisrisch and Peters (1992, p.275) state that “The informal risk capital market is by far the most misunderstood and inefficient type of risk capital since it is composed virtually invisible group of wealthy individuals”.
36. This result may be a consequence of reference groups in data gathering.