When building a company, both the ability to learn and the ability to adapt are put to the test
What do you do if the company is in the growth phase and one of the financing options is the involvement of private capital?
There are several aspects and possible pitfalls, notes Mart Suurkask, CEO of AS Bercman Technologies, which creates smart city solutions, and shares his experiences on this topic. He notes that when growing a company, an entrepreneur goes through various stages of development very quickly, where the ability to learn and the ability to adapt are inevitably put to the test. “The saying, ‘the more I learn, the less I feel I know’ also applies to growing as an entrepreneur,” Suurkask is convinced.
If a company needs to involve private capital for growth, how to find the so-called right private capital for the company?
Every beginning is always difficult, and if possible, you should try to at least validate the business model or finance the prototype through yourself or your close family. From there, depending on the field of activity, it is reasonable to carry out a pre-seed investment round of angel investors, and this mainly to prepare the company for subsequent funding. Money is always invested in the company with conditions, and in order for early founders and owners to continue to act motivated in the future, at least basic knowledge of the risks and opportunities of raising money is needed. In Estonia, several accelerators are a good breeding ground for startups, which help with both training and additional investments. The rule of thumb could be that as long as you can try to manage yourself and if you are sure that accepting someone else’s money with the conditions is acceptable, move on to angel investors, funds and crowdfunding platforms. First North, a growth market operated by Nasdaq and created specifically for small and medium-sized companies, where the rules are slightly more lenient than the main market, may be suitable for start-up joint-stock companies to attract private capital.
What have been important principles for you when involving private capital?
It has always been important to me that when raising capital, the investor in the company clearly understands what the company wants to achieve and also that this journey to reach the goals may not be easy. The most important thing is for the investor to understand that investing in the company’s development is definitely worth the journey, both financially and socially.
If private capital is involved and the company is growing, what must be considered?
If the money has been raised and the company is moving towards growth, then the primary raising of capital has fulfilled the goal set in its initial phase, which could be a reason for satisfaction. On the other hand, the challenges of a growing entrepreneur in a new situation have changed and are related to the management of people, processes and finances. In order not to get into trouble, you need to find a team around you that can support you with advice and strength as the business grows.
Commentary: Tehnopol and AIRE advise companies on financing
Sven Illing, vice-rector of TalTech entrepreneurship and chairman of the Tehnopoli Council
Tööstusettevõtte digitaliseerimiseks vajaliku finantseeringu saab katta omakapitali, pangalaenu, avaliku sektori toetusskeemi või erakapitali investeeringute toel. Võimalusi tundub olevat palju ja loodetavasti igaüks nende hulgast ka midagi leiab.
Erakapitali toel kasvamine sobib ennekõike sellistele ettevõtetele, kellel on juba olemas oma toode või vähemalt ambitsioon selle arendamiseks. EDIH AIRE raames pakub Tehnopol firmadele praktilist ja turupõhist nõustamisteenust, kuidas ettevõttesse täiendavat kapitali tuua ja oma tegevust seeläbi laiendada. Tehnopol ja kaasatud eksperdid annavad tööstusettevõtetele nõu, kuidas täiendada oma ärimudelit, arendada toodet või teenust, hindame ja loome vastavalt vajadusele otsekontaktid erakapitali pakkujatega nii Eestis kui välismaal.
Nõustame, kuidas maandada erakapitali kaasamisega seonduvaid riske ning toetame kapitali kaasamise protsessi õigus- ja finantsvaldkonna professionaalide abiga. Ettevõtted saavad ennast nõustamisele registreerida AIRE veebileheküljel.
Kõikide ettevõtetega teeme esmakohtumise olukorra kaardistamiseks ning erakapitali kaasamise eelduste ja võimaluste tuvastamiseks. Sellest tulenevalt jagame infot järgmiste praktiliste sammude kohta, kuidas erakapitali kaasamisega edasi liikuda.
Artificial Intelligence and Robotics Center AIRE:
- AIRE is committed to increasing the competitiveness of Estonian industrial companies by supporting them in the introduction of artificial intelligence and robotics.
- AIRE supports the creation of industrial innovation by bringing together the knowledge of universities and the needs of companies.
- Together with universities and research institutions, knowledge from the fields of IT, engineering, robotics and electronics will be combined to create a platform for the development of digitization and automation for companies.
- Companies are offered the opportunity to use research and development laboratories and support in managing big data.
- The aim is to bring universities closer to industry through innovative special solutions for companies that cannot be found on the private market – be it testing of new technology or software, data analysis methods, cloud solutions, preventive maintenance or development of digital twins.