Young Innovative Company funding
What do we offer?
Startups with a large business potential seeking rapid international growth can apply for the Young Innovative Company funding for the comprehensive development of international business and accelerating growth, as well as for strengthening their team, developing their business model and growth strategy, and opening up new markets.
Who can apply?
The funding is intended for startups that have been in operation for less than five years. For the Young Innovation Company funding, we select promising startups that are able to rapidly scale up internationally and already have significant net sales and evidence of growing international business.
The companies selected for the funding have typically been in operation for at least three years and have already used our funding services in previous projects.
The assessment of a company’s eligibility for the Young Innovation Company funding is always a comprehensive assessment of the company, its preconditions for growth and the state of its business. The selected companies are required to have:
- A scaling business model and a potential for rapid growth in international markets
- Evidence of the functioning of their business model, as well as paying customers, also in international markets
- A straightforward and target-driven internationalization strategy and the ability to implement the plan
- A competitive edge that provides a significant market position
- A full-time management team, whose members hold a significant part of the company
- The opportunity and will to obtain external funding / private capital investments to support international growth
- Independent business responsibilities and decision-making powers
Preconditions for funding
Business Finland can grant Young Innovative Company funding only if the company meets the following preconditions:
Age and size
- The company must have been in operation for less than five years before the funding decision for the first period is made. The funding will cease, at the latest, when the company has been registered for eight years. The age is calculated from the registration date.
- The company is small: fewer than 50 employees, and annual net sales or balance sheet total of up to EUR 10 million.
Ownership and background
- Key employees committed through ownership: The company’s employees have significant ownerhip.
- The company has independent decision-making powers over its business activities.
- The company owns the IPRs significant for its business.
- The company has not continued the business activities of another company, and the product has not been commercialized previously in another company.
- The company has not been established through a merger. Exceptions include a situation where merged companies have been in operation for less than five years.
- The company is not listed, and it has not distributed any profit. Profit distribution means the distribution of dividends or assets from an unrestricted equity reserve, or the purchase and redemption of treasury shares.
Strong efforts in innovation activities
- At the application phase, the company must provide a confirmation from an auditor that it has invested at least 10% of all its business costs in research and development, during at least one of the previous three years.
The amount of Funding
During the first period of 6–12 months, the amount of funding will be EUR 250,000. Achieving the goals set for the funding period is one of the requirements for proceeding to the next period. Goals will be defined together with the company based on its business plan, and they will be registered in the funding decision.
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Startups selected to the Young Innovative Company programme
Since 2008, a total of 466 (1/2021) promising startups have been selected for the Young Innovative Company funding program.
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List of Young Innovative Companies
Funding in three phases
Typical goals
- The development of turnover and especially export turnover
- Ability to get capital investments or funding from other external sources
- Strenghtening of team resources
- Expanding into new markets
Evaluation panel
Business Finland evaluates the progress of a Young Innovative Company project after each funding phase. During the end of the first funding phase companies are asked to present their ideas to an evaluation panel made up of investors and experts.
The panel evaluates the company's business potential, its growth potential and development needs and its suitability as an investment target and provides Business Finland with a statement regarding the company's suitability as an investment target. The panel has an advisory role in relation to Business Finland's funding decision.
The evaluation is performed on the basis of the material provided by the company, and on the basis of a corporate presentation.
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Funding terms
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Funding terms for Young Innovative Company funding (pdf)
How to apply
When considering submitting an application for funding, please contact your Business Finland account responsible or our customer service in order to identify if the Young Innovative Company funding service is the best match for your goals.
Company has to be less than five years old when the funding decision for the first phase is made. Please, submit funding application well in advance, no later than two months before company turns five years (calculated from registration date).
Funding applications are submitted through the Business Finland online service. In the application you are asked to describe the current status of your company's business, staff and resources, the vision for growth, project objectives, project plan and cost estimate.
The project plan
Please include a project plan and a business plan in the application. The plans are free-form.
Confirmation from an auditor
At the application phase, the company must provide a confirmation from an auditor that it meets the preconditions for the Young Innovative Company funding.
- Template for an auditor's confirmation for the Young Innovative Company funding application (rtf) (in Finnish)
Financial information
Please attach the following financial information to the application:
- An accounts ledger from the current accounting period. The accounts ledger should include an income statement and a balance sheet no more than two months old.
- A monthly cash flow forecast Cash flow and an annual financial forecast calculation template (xlsx).
- An annual financial forecast (previous accounting period and the three following periods). Cash flow and an annual financial forecast calculation template (xlsx)
You can use your own templates or Business Finland's templates to submit the financial information to Business Finland. Please note that the templates are not mandatory and the information can be submitted to Business Finland, for example, as part of your business plan.
Reporting
Business Finland pays out project funding on the basis of reports and cost statements. Progress with the project must be reported to Business Finland in accordance with the schedule announced in the funding decision. Submit the report and cost statement through Business Finland's online services.
Eligible costs
- Direct salary and wage costs, and the associated indirect personnel costs (maximum 30%).
- Purchases (travel, outsourcing of services, materials, supplies, machinery, and equipment).
The following costs are not eligible:
- Outsourced services from associated companies (with the exception of services purchased from companies that belong to the same group).
- Voluntary insurance payments, gifts and stipends.
- Other costs that include public aid.
- Export-related activities, and the establishment and operation of a distribution network in other countries.
