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Funding ain’t what it used to be. Rather than bank backing or venture capital investment, startups today have the opportunity to mix and match a range of alternative investment options to get their business up and running. Case in point: crowdfunding. It isn’t just asking friends and family for their support, but rather a variety of types with differing guidelines.
Choosing the right crowdfunding campaign is a delicate decision for each and every startup, with the majority of contemporary businesses selecting equity crowdfunding through platforms like Wefunder. However, debt crowdfunding investment is also becoming an option for those founders who do not want to give up part of their business for backing. Nonetheless, both have benefits and drawbacks to carefully consider, from gaining industry partners to putting up collateral against lower repayment rates.
You Scratch My Back, I Scratch Yours
Crowdfunding is not free funding from the public – at least not in the world of business and startups. Non-charitable crowdfunding campaigns usually include an incentive for investors to put their money where their mouth is. Equity crowdfunding is one example: Investment entitles the backer to part of the business. Platforms like Wefunder and Seedrs show that this can and does work for both sides of the investment agreement – but must be entered into with a solid understanding of the pros and cons of such a deal.
The best part of equity crowdfunding is that startup founders are not required to put up their personal assets as collateral. Furthermore, the backing from investors and industry insiders will offer knowledge and contacts to strengthen the business as a whole – in essence, equity crowdfunding partners grant a world of ambassadors.
On the flipside, equity crowdfunding means founders must give up a stake of the business to secure investment. This means control and profit sharing must be considered. Since there is much more sharing of risk in this type of crowdfunding, satisfying investors to commit can be more difficult. Each and every equity partner literally needs to “buy-in” to the company vision. This can be especially difficult for startups with a niche concept or working in a specialized industry.
Keep Company Capital But Remember The Collateral
While popular, equity is not the be-all and end-all in the crowdfunding discussion. In fact, more startup founders are unlocking the potential of debt crowdfunding to realize their business goals without giving up a stake in their startup. See FundingCircle, OnDeck or BondStreet for this in action, but again there are positives and negatives to such an arrangement.
In this style of crowdfunding, founders are not required to give up part of their company to secure funding and the shares will not be diluted. If the startup later becomes very profitable, the startup simply needs to pay back the debt and remain in control of the profits. Alternative collaterals are something to consider.
Collateral is the major con here. Inherent in debt crowdfunding is collateral to back said loan. The logic is that this money will be paid back as long as the collateral is agreed upon – but this can be more difficult with startups which may not have something to collateralize.
Further, the founder might use their car, house, investment – ultimately it is negotiable. It is important to keep in mind that with solid collateral, the interest rate will be lower. The higher the risk, the higher the interest rate – and collaterals influence the risk rate of any given loan.
Let’s Talk Investors
It is worth putting the startups to one side to consider what this new paradigm means for the investors. Rather than simply venture capital, investors have a world of options at their disposal. Between the two crowdfunding options previously discussed, investors are less at risk to invest in debt crowdfunding rather than equity crowdfunding. This is since there is at least something agreed upon for collateral to return the investment no matter what happens.
This is not something that would ever be backed by a bank. Debt crowdfunding is connecting entrepreneurs with potential investors who are keen to connect with alternative investment but not as keen to embrace risk as equity investment.
These are exciting times for investors as there are simply more options available than ever. Crowdfunding through equity or debt should be seen parallel to the stock market. Investors have the option to invest in stocks (equity) and bonds (debt), diversifying options and exposure accordingly.
The Best Combinations For Startups
The fact of the matter is that most startups will probably find a mixture of both equity and debt as the best option for their business. A healthy balance between equity and debt makes a better equation – for example, if the startup has too much debt it will become very expensive, while if they give away too much equity they might lose control and reduce long-term profits.
There is no escaping that with more ways of financing, startups need to tap further into financial engineering to understand their best possible return and long-term objectives. Whether debt or equity crowdfunding is the calling, the economic reality remains. This means to extinguish the debt as soon as possible or to partner with investors and keep them for life. In both cases, startups can succeed – but strong economic understanding is key before taking the crowdfunding plunge.
Ten Raiffeisen Bank International (RBI) network banks in Central and Eastern Europe (CEE) support the group-wide program with their own FinTech initiatives “Elevator Lab Challenges” and “Elevator Lab Bootcamps”. This supports local FinTechs in the ecosystems in Albania, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Kosovo, Romania, Russia, Serbia, and Slovakia. Elevator Lab’s reach makes the program the largest FinTech network in the CEE region.
Fast Track To The Group-Wide Elevator Lab Partnership Program
The winners of the “Elevator Lab Challenges” will receive a wild card for the semi-finals (remote video pitches) of the group-wide FinTech Partnership Program and therefore have the chance to reach the finals in Vienna in October 2019 and further to do a PoC together with RBI Group.
Participants get the chance to develop a pilot project with RBI’s local banks to develop concrete FinTech solutions with the help of experienced mentors and access to real customer data. This makes the Elevator Lab Challenges a unique FinTech incubator – an equity-free collaboration with a local bank to get solutions ready for the market.
“Elevator Lab Bootcamps” aimed at early-stage FinTechs are new in this year’s Elevator Lab round. The network banks are thus responding to the need to support founders from the outset and identify business opportunities in the banking industry.
Iberdrola is a leading energy company & pioneer in digitalizing and automating the electric network. With assets worth €113bn, Iberdrola is one of the largest electric utilities in the world, providing energy to more than 100 million people globally. In 2008, Iberdrola’s Startup Program was established with €70 million available to invest in innovative technologies.
STORM RESILIENCE addresses the challenge of assets frequently being tested by severe weather and unforeseen events that can threaten or damage the electrical system. Downed trees and downed lines are two of the biggest problems when trying to get the power back on. To keep their service operating and to restore it promptly when damaged is a key priority.
Looking For Solutions To Improve Prevention, Storm Recovery & Insurance Risk Coverage
For that reason, Iberdrola is looking for proposals to improve predictive analysis, prevention and recovery tasks of weather event effects which can affect their costumers’ service. Additionally to solutions to minimize the impact in Iberdrola’s electric facilities, insurance risk coverage solutions are interesting as well due to a current limitation in insurance markets. In total, Iberdrola is looking for startups in three main areas:
Prevention: Improving operations, maintenance & engineering work, including but not limited to big data & analytics and drones to assess and monitor electric facilities before the storm happens.
Storm Recovery: Improving operations, including but not limited to big data & analytics and drones to assess and plan activities after the storm happens.
Insurance Risk Coverage: Besides the operational and service impact, weather events have an economic impact associated. Iberdrola is interested in solutions that can help to reduce the economic impact.
Pilot Project & Chance For Investment
For this Startup Challenge, Iberdrola has parted up with its Corporate Venture Capital arm, Perseo. “Iberdrola continues its commitment to improving customers’ quality of service by using vanguard technologies. In that way, Iberdrola, in collaboration with Perseo, has launched STORM RESILIENCE for companies in the sector of Artificial Intelligence and Big Data”, said Óscar Cantalejo Sánchez, Investment Manager at Perseo.
The winning company will have the possibility to perform a pilot within the group’s ecosystem – combining the startup’s capabilities with the resources & market reach of Iberdrola. If the pilot succeeds, Iberdrola will add the solution to their current portfolio of providers to minimize the impact of extreme weather events. On top of this, the startup will be evaluated by Perseo for a potential investment.
The office is your creative space, the kitchen where the sausage is made, as Mad Men’s Bert Cooper puts it. In other words, your office should be set up as a welcoming, comfortable environment for all employees. Whether you’re operating cubicles, an open-plan office, or have a luxury of giving every employee a private office, there are ways to make this space more people-friendly.
#1 Don’t Scrimp On Comfort
When it comes to office furniture, many businesses tend to make savings, which leads to many employees having back pain, which affects their productivity. Consider looking for some ergonomic chairs with lumbar support, lumbar cushions, and even standing desks for those prefer doing business with feet firmly on the ground, pardon the pun. Such flexibility will give your employees to choose what works best for therm. It’s wrong to force all the employees to use a bar stool as an office chair just because it’s trendy.
#2 Create A Few Quiet Spaces
No human employee can be at the productivity peak all day long – everyone needs a break. Whether this is just a few minutes to have a cup of tea or coffee or to get a bit of fresh air on the balcony or office backyard, these spaces offer a refreshing respite, allowing your honeybees to meditate, their minds to wander off, or even take a short nap after a stressful episode.
#3 Decorate It
Since your employees spend a lot of time in your office, you should as well make efforts to add decorations to make it more aesthetically pleasing. It doesn’t have to be flashy colours or funky street art, just a few things that make it look less like an office and more like a laid back lounge, where those people would like to spend a part of the afternoon. An inspiring monochromatic wallpaper can replace the monotony of white walls, and some real art and bookshelves can give the space more character. The bookshelves can in return provide great and easily accessible storage for file folders.
#4 Add Office Plants
Furniture, carpets, AC units, and even computer equipment produce harmful toxins that pollute the indoor air. It’s estimated that a typical office space contains over 300 different airborne pollutants, and yet a single office plant is able to remove the harmful toxins in the 10 square feet space around it. Instead of making a wild guess which plants would thrive in your office, nowadays you can even rent a plant or two from a company that specializes in the installation, maintenance, and replacement of greenery in both indoor and outdoor areas.
#5 Make More Light
While a run of neon lights on the ceiling used to be a standard in 99% of the offices, now it was proven that despite their economy, those unnatural flickering tubes aren’t making anyone neither comfortable nor efficient. While the best option is natural light, your office orientation and the number of windows may not be enough for certain tasks. LED task lights aren’t as expensive as they used to be a few years ago, and apart from having better colour temperature range than other alternatives, they give off less heat as well. The savings you make through LED lights throughout the office can allow you to throw in a few of those modern Edison filament bulbs for a more relaxing ambiance lighting.
#6 Optimize Temperature
It’s no one’s idea to work in an office that is too cold in summer and too hot in winter. In both scenarios, the office environment isn’t balanced with the outdoor temperatures, which may lead to employees’ discomfort. Instead, you should let your employees decide on the office temperature, but don’t allow the gents in suits crank down the thermostat when ladies are cold. Provide comfy sweaters and blankets for the chilly days. While everyone has different temperature preferences, you shouldn’t let one person who is always cold make the most decisions.
Although every company or workplace has its own indoor environment depending on the preferences of the owner and the business the company is dealing in, it’s important to understand that companies with employee-friendly, and work-friendly environment experience fewer productivity issues. Employees in these spaces are more content with their surroundings and often find themselves working there not only because of financial advantages but also because they like it.
Let’s face it: mobile development services are not cheap. During the delivery of a product, there are lots of bills for entrepreneurs to deal with. So prior to diving right into the process, it may be worth taking some time to plan your app development and marketing budget. This greatly helps entrepreneurs to find out if they can cut expenses and, if so, how to do that.
#1 Start With Defining Your Goal
There are lots of reasons for building an app. The most common are:
Expand opportunities: When you already have a physically present brand or e-commerce website, you may want to provide your customers with the mobile experience. The number of mobile users grows rapidly, and even such giants as Asos, Lush and Walmart adjust their services to keep up with trends.
Bring an idea to life: If you have a million-dollar idea but little or no technical background, you may outsource the development to other countries. At least, that’s what Slack, Skype and Opera creators did.
Withstand competition: Mobile solutions come handy in each and every sphere. They are a great asset to businesses that want to make their products stand out or even outrun their competitors.
Engage customers: It’s about building a high-quality product not only for your current customers but also for potential ones. Nike built an engagement platform by releasing the Nike+ running app which became extremely popular.
#2 Choose The Platform
The choice of platform is extremely important when it comes to budget planning. And the cost to create an app will actually depend on whether you choose to release your app for iOS, Android or both. Android development is usually more expensive than building an app for Apple users. Why so? Android-based devices support a number of screen resolutions in addition to various OS versions the app should be optimized for.
The best way to choose a platform is to check what devices your target audience uses. Finally, make sure to check what solutions developed your competitors.
#3 Find The Team Of Developers
It’s in-house or outsourcing development you need to choose from. Since you have to find professionals, it may be more difficult to hire in-house devs. And don’t forget about salaries, hardware, and software provision, office rent, etc. – quite a lot to handle, especially for young startups.
Middle-sized or big outsourcing companies also provide high-quality development services. By the way, their prices are usually cheaper than those of in-house devs. A variety of startups choose to outsource their product development, and Google and Microsoft are using this approach too.
#4 Evaluate The Features
The number of features you want to add directly affect the cost. So measure twice. First, create a list of features your app won’t do without. Start with the basics – registration and profile management and then move to more sophisticated options like integrations and other platforms.
#5 Estimate Your Future Profit
Software development requires clear revenue goals just like any other business does. App building is expensive, and you should already be wondering when these expenses are going to pay off.
By analyzing the demand on similar apps, you can easily calculate an appropriate revenue. Mind though that there are lots of pitfalls as it’s impossible to foresee users’ behavior.
I hope that this information will help you to estimate the budget needed to create your mobile app. Unfortunately, development services are not the only expenses to bear. So make sure to add marketing expenses as an important part of your app’s success. Here are a few steps for calculating your app’s marketing budget.
#6 Decide On The Number Of Installs
First of all, you need to know how many users you’re going to attract. This will help you to define the average marketing budget. Smart Insights calculations show that to hit the top of, for example, the music category in App Store, your app should have about 111,551 daily installations. And if you’re not interested in building music apps, just find out how many downloads top-rated apps in your category have.
#7 Define The Cost Per Install
The cost per install (CPI) defines how much customers are going to pay to generate a single installation. Currently, the approximate prices are between $1,2 and $1,6. Let’s do some simple calculations. Taking into account the $1,2 cost per install and multiplying it by 111,551 (the number of installs needed to get on top) we’re getting $133,861 of daily CPI investments. But to hit the top your app should keep the position for at least a few days.
#8 Get The Downloads
Still, it’s not that simple to get on top of any category and generate this number of installs. You will most probably need to hire a marketing analyst to test ads on Facebook, Twitter, and other platforms as well as check their efficiency. As soon as the campaign is launched, marketing analysts will find out where users come from, how long they use the app for and so on.
Instead of hiring marketing analysts, you can use automated services for app marketing. These services analyze user behavior and choose the best platforms to promote your app.
Wrapping up, I’d like to say that app budget planning may indeed seem complex. There’re lots of points to take into account. What I suggest is paying enough time to study all possible pitfalls of your future product to bring an efficient and unique solution to life. And, of course, not exceed your budget abilities.
G4A Partnerships combines Bayer’s existing programs (Accelerator, Dealmaker, and Generator) into a joint initiative aimed at various stage startups in the healthcare sector to focus on co-creation and scaling by committed partnerships.
Through focusing on collaborating in specific digital health focus areas such as digital therapeutics, voice and neuro-tech, and patient engagement platforms, Bayer concentrates on longer-term collaborations and investments.
Changing The Experience Of Health
Driven to make a difference and change the experience of health together with the brightest entrepreneurs, Bayer realizes this mission through commercial partnerships, healthcare technology funding, mentorship, and access to exclusive networks.
“For us, it’s all about developing new health solutions that can change the experience of health,” says Dr. Zsuzsanna Varga who’s heading G4A Partnerships. “We’re convinced that long-term collaborations with digital health companies sharing the same passion and vision are the best way to achieve this.”
Growth & Advance Track For Startups In Different Stages
The G4A Growth and Advance Tracks offer a gateway to partner with Bayer in the digital health space. Partners benefit from Bayer’s global presence and business acumen to grow their healthcare startup.
This track is designed for companies in the pre-product launch stage. In addition to healthcare technology funding, Bayer provides a dedicated workspace and mentorship with industry experts.
The Advance Track is for more mature startups with a product in the market. Selected companies will be working jointly with Bayer experts to drive a commercial partnership co-funded by G4A. Successful companies will receive EUR 50K – 100K with follow-on milestone-based payments. Plus, the access to the G4A network and family.
Since its launch in 2013, Bayer has supported over 149 digital health companies. This has resulted in 29 direct collaborations with companies such as Agamon, KinAptic, Turbine, and xbird. Bayer now operates G4A in 12+ countries, developing and promoting collaborative health care projects around the world.
To partner with Bayer, review the 2019 challenges here and apply by 31 May.
Who would understand what it means to be busy better than entrepreneurs? The two terms are closely related. Entrepreneurs bear the burden of the world on their shoulders. Being the people responsible for their business’ success, they have to wear different hats at the same time.
Because of all these daunting duties, time-management and productivity are key focus areas. Is there any possible respite for them? The answer is, yes. With the advent of modern technology, there are tools and software available that can help an entrepreneur save time and increase productivity.
For this post, we chose tools and we critiqued each of them thoroughly. After careful curation, we present you the six tech tools that will make your entrepreneur life easier.
This software is a powerful cloud storage platform that can be used for file synchronization as well. With this software, digital professionals and entrepreneurs have been storing and accessing the files from any device from anywhere across the globe. A free account gives you up to 2GB of storage per user.
This cuts your expenses on extra physical memory devices. Dropbox also keeps the data free from breaches making it a safe and secure option for storage. The one-click share feature lets you enjoy the liberty of working collaboratively on the files.
Email marketing has the highest return on investment (RoI) and is a great way to connect to your prospects (partners and customers) instantaneously. You can promote your online business by drafting aesthetically pleasing emails by tweaking the details by using MailChimp.
MailChimp also provides a marketing analysis and management system for your entrepreneurial adventures by reporting marketing analytics and statistics that can boost online email marketing.
An online time tracking tool that is highly recommended for small businesses. OnTheClock is an amazing software that gives additional features like payroll integration, project and payroll reporting, paid time-off (PTO) tracking, GPS tracking, multiple location punch-ins, and other tools that will take care of all your quintessential business needs.
The software is supported by mobile phones as well and comes with a handy mobile time clock application. This dead simple software is trusted by more than 8000 companies worldwide. Probably the only software in the market that combines these features in one product – a good deal for every entrepreneur.
Sometimes being an entrepreneur requires quick gatherings and answers that are not possible through emails alone. For a more faster approach, a conference call from Skype can just be the thing that a business needs. You can have internal meetings and Q&A sessions with the help of conference calls/meetings with Skype.
Also, the geographical borders create absolutely no obstruction in the internet-based conference calls. For example, you can connect to your employees in remote locations and in different countries by means of a single click. Apart from phone and video calls, you can even share files with your employees.
Social media management has never been easier before the advent of Hootsuite, an online social media scheduling and management tool that most of the entrepreneurs around the world rely on. Take care of all your social media accounts from one platform and schedule multiple posts across these profiles.
Hootsuite optimizes the time of posting for maximum views and engagement. Posting at the right time can be a boost for your business, the converse of which will be a nuisance. To make a country-wide or worldwide impact customer engagement relies heavily on the timing of the post, and Hootsuite makes management easy.
A powerful project management tool that lets your business be organized seemed a far cry before Trello was launched. Trello can be used as a digital whiteboard where you can paste cards and each card will have checklists, files, and comments.
Trello is very versatile and lets you keep a bird’s-eye view on every project by creating an email course, writing an ebook and organizing specific projects. Managing a team professionally, holding briefings and brainstorming is a cake-walk due to Trello.
Which Tools Do You Choose?
All the tools mentioned above have their own niche and panache. They are the most trusted tools that have proven to be very handy for every type of business. The selection of the tools will depend on the functionality and nature of your business.
When it comes to paid tools and software you need more features for less money. That is why OnTheClock is one tool that we’d recommend for your business. Not only does it give you superb time-management features, but can double up as payroll management and integration tool.
Being an entrepreneur, you need to be a team player to work as a team and achieve your goal. A well lead team can do wonders for your business and without motivated members in your team, you will not be able to reach heights. So, it is crucial to have effective leadership skills.
However, entrepreneurs are not born leaders. You need to develop and sharpen your leadership skills to handle a challenging situation. Though every entrepreneur has their own style to lead people, they can adapt some of the proven leadership skills to influence their co-workers. If you are willing to work on these skills, this article will provide you with a guide on effective ways to sharpen your leadership skills.
#1 Build Up A Strategic Vision
You have built an organization with your innovative business ideas, and passion. But, is this enough to make your company reach heights? With time you certainly need to sharpen your strategic vision too so that your organization keeps up with the growing trends. It’s about understanding and indulging in the broader view of the company and its employees. Moreover, strategic vision lets you connect your short-term goals to the long-term ones for yourself, your employees, investors, and customers to make them believe in your vision.
#2 Grasp A New Learning Every Day
Break that entrepreneur’s know-it-all mentality and keep your mind open to learning. Leaders are amenable to know new information and learning to improve leadership skills. Also, in this fluctuating and capricious market, you need to be a constant learner to stay updated with all the happenings.
For instance, if you fumble or hesitate to speak in public, you should find ways to strengthen it. For this, you can either take public speaking course or practice in day to day life by talking to different people with confidence.
#3 Develop Self-Awareness
To lead a team, one of the most crucial capabilities is to master your inner instincts, intuition, and power. In short, you should be self-aware and confident about inner strengths and harness your weaknesses. You might be wondering about how one can be more self-aware. Some of the suggested ways are to understand your thought process behind taking any action, not to let your emotions overpower any decision, be patient and not to take an impulsive decision, etc. Moreover, you need to be good at assessing the results and have the curiosity to learn and grow.
#4 Be An Observer
Although you are the one who initiated the business idea, your entrepreneurial success depends on your team. If they won’t be motivated to work with you, the retention rates for your organization will increase. So, to be successful, you need to make sure that your team walks along. You need to be aware of the mindset of new and existing employees. This way, you will only have the right talent in your organization. Moreover, you should also invest time and money to train and coach your team in order to keep your organization growing.
#5 Dress To Impress
If you are meeting for business purposes and come wearing a t-shirt with torn jeans, your staff, investors, partners or customers will not take you seriously. Hence, you need to dress formally (at least sometimes) to influence others. Also, according to researches, if styled properly for the occasion, you feel more confident and this will show in your body language and gestures. Moreover, don’t limit the dress code to yourself, you can ask your staff to dress up for in-house meetings.
#6 Pay Heed To Other’s Opinion
To be an able entrepreneurial leader, you should never hesitate to seek advice from other people. In your initial period of entrepreneurship, try to work with a mentor, business coach or read articles and books daily. You can learn through other people’s mistake and success stories. From this, you can gain leadership improvement ideas which help in effective decision making in difficult times.
Of course, you are loaded with work and have no time to pay attention to anything apart from your tasks. But, to keep your organization growing, don’t overlook the impact of being a good leader on the success of your organization. The above tips will help you gain insights into being a successful entrepreneurial leader.
Starting a new business brings many challenges with it: from finding a viable product to marketing and selling it to customers – founders constantly face potential pitfalls. While all these decisions are crucial in building a successful company, the location of a business has become an increasingly important factor too.
European startups are often thought to be lagging behind their US-based counterparts – an aspect that Andreas Spechtler, founder of the Startup Executive Academy (SEA) and CEO of Silicon Castles, the company behind the program, had in mind when building the Academy. Spechtler has experience in both the corporate and the startup world, qualifying him to know what a founding team needs to build a globally successful company.
Baba Shiv: Lead Professor At SEA
For the third time, the SEA brings Baba Shiv, a world-leading marketing professor from the Stanford Graduate School of Business, to Salzburg’s Castle of Urstein. Shiv and Spechtler developed a curriculum for the Startup Executive Academy that is tailored to the needs of startup founders and executives. „The Startup Executive Academy was amazing and totally changed my thinking about how to create a company and what is really important to be successful. I was able to implement a lot from the lectures and the experience of the other executives into my new startup. Also, we had a lot of fun at „our castle“. I can totally recommend this academy to any founder”, said Zeynep Demirbilek, CEO of Service Club.
The Startup Executive Academy aims to equip startup founders and executives with the tools they need to accelerate their business. Through hands-on sessions from pricing to investment proposals, participants are prepared to compete internationally.
Ongoing Network Support After 5 Days Go-To-Market Crash Course
Whether you are a first time entrepreneur, early-stage or scale-up business, the SEA is a 5 days go-to-market crash course packed with valuable information and actionable learnings everyone needs to create a prosperous business. After graduating from SEA, startups will become members of The Circle – a network that stays in touch to support each other.
Participants also profit from access to top executives, former managers, and entrepreneurs from leading companies such as Google, Dolby, Sony, Porsche, Huawei, Spencer Stuart, PWC, McKinsey, and more.
In short, here’s what’s in it for startup founders & executives:
5-day course to accelerate business and inspire growth
Education by Stanford, a world-class Faculty
Get together with a selected group of like-minded entrepreneurs
Hands-on sessions from ricing to an investment proposal
Deepening knowledge, developing skills
Learn how to overcome startup-specific challenges
Yoga & meditation classes to become more successful
On July 10, the last day of the Startup Executive Academy, the Academy opens up for Corporate Day, where startups have the opportunity to present their ideas to Corporates, VCs, and Business Angels.
To participate in the Startup Executive Academy, apply by 27 June at sea2019.com.
Niklas von Weymarn is a researcher turned startup investor. After several years in academia, he started in Metsä Group in 2012 as VP, R&D. In the Group, “my most memorable project was being part of the Metsä Group Äänekoski bioproduct mill planning project which eventually then became the largest wood processing plant on the Northern hemisphere with an investment cost of €1.2 bn,” says von Weymarn. To foster the collaboration between Metsä Group and innovative startups in the forest-based bioeconomy, von Weymarn took over as CEO of Metsä Spring, the Group’s Corporate Venture Capital (CVC) arm in 2018.
We spoke to Niklas to talk about the mission of Metsä Spring, their current projects and future plans.
Niklas, why was Metsä Spring founded and what is your aim?
Most new ideas related to the forest-based bioeconomy are found outside Metsä Group. This is a simple fact. An established business like Metsä Group must constantly develop methods to find these new ideas.
Open innovation is one example of how a large company can become aware of external ideas. Strategic collaboration with a key machine supplier and current customers can also lead to the discovery of new ideas.
For Metsä Group, we decided to further explore new ideas through a Corporate Venture Capital (CVC) activity. Being part of the CVC scene brings interesting, fast-developing startups into our pool and our role is to help develop such startups, whose business ideas, in the future, could become a part of Metsä Group’s business ecosystem.
With Metsä Spring, you are looking into innovations in the forest-based bioeconomy. Which technologies are you specifically interested in?
We do have areas of interest, but to be totally honest, we might not even know all the interesting new areas. That is why hearing diverse ideas from startups is so interesting for us.
In general, our interest spans from technologies enabling the upgrading of components originating from wood to new digital tools that could be used to improve forest-based value chains.
What is your main challenge in this area?
Scaling up the production method is time-consuming and costly. A so-called demo plant can easily cost tens of millions. This is a typical challenge linked with technologies aiming at producing a material or a chemical. Business ideas that are based on digital tools can often avoid this challenge.
Metsä Group is also quite active in developing its existing businesses. For example, Metsä Group has recently initiated investment planning projects, related to building a new bioproduct mill in Northern Finland, building a new sawmill in Southwestern Finland and renewing parts of the pulp mill in Sweden. If implemented in full, the total value of these investments would amount to approximately 2€ billion during 2019–2023.
What benefits does a collaboration with startups have?
For us, it is key to find partner startups that can benefit from Metsä Group’s industrial assets, our competence, and networks. As the typical aim of the startups we engage with is to take the first steps towards industrialization, having all the necessary competencies in the team, related to the industrial value chain, is crucial. In other words, we are happy to co-invest with such parties that strengthen the team and thus, help the startup to become successful and enter the market.
What can startups expect from working with you and your team?
Having an operative team within the startup and giving it full freedom to implement the day-to-day tasks are important principles. However, as we become a partner through equity investments, we support our startups in all ways possible. The success of our partner startups is a common goal.
When you decide to partner with a startup; what are some of the criteria you are looking at?
Two things stand out for us: the technology/product and the operative team. A startup must have a credible technology and product, and then a team that can use the technology to develop a feasible business model. The main aim of the phase, in which Metsä Spring participates, is to reach a proof-of-concept (PoC). This aim can typically be divided into a market PoC and a technology PoC, often also into a legal PoC.
What’s next for Metsä Spring?
The first year has been quite busy. I started alone in May 2018 and now our team, including Metsä Group colleagues, grew to about 15 persons. All basic systems needed to run a company like this are in place and we can now focus fully on finding and assessing potential startup partners. This hopefully leads to more investment decisions in the near future.
Metsä Group’s strategic objectives include, among other things, increasing the value of the Finnish forests, stop using fossil fuels in production completely, further increasing the generation of renewable energy based on side-streams, and ensuring that greater amounts of carbon are stored in forests and in wood-based products. This is why at Metsä Spring, we are looking at mega-trends, like climate change and issues related to plastic waste quite seriously. It is clear that betting on new, sustainable bio-based solutions is betting on a winning horse. The world will need many solutions to fight the challenges and creating a sustainable bioeconomy is definitely one of these solutions. So, any startup working on innovative solutions in these areas is welcome to join us on our journey to address these challenges.
What’s the best way for a startup to get in touch with you?
On our website, we have set up a short application form to get an initial idea of what a startup does. After a startup reaches out, our team will get in touch to discuss the idea in more detail.