Young Innovative Company funding
What do we offer?
With the Young Innovative Company funding Business Finland intends to accelerate the global growth of the most ambitious, rapidly growing startups in Finland. The funding can be used for the comprehensive development of business activities. For example, it can be used to strengthen a team, to develop a business model and growth strategy, and to open up new markets.
Who can apply?
The funding is intended for a startup company that has been in operation for less than five years, and has proven its business concept, so that it already has paying customers. Business Finland funding can be applied for by companies registered in Finland.
How to apply?
Business Finland selects the most promising, rapidly growing startup companies for its Young Innovation Company funding programme. The companies have typically been in operation for at least three years, and have already used Business Finland funding services.
What is a Young Innovative Company like?
The funding may be a good option for your company, if you have:
- A scalable business model and the opportunity for fast growth in international markets.
- Evidence of promising business activities and paying customers.
- A clear plan to grow in international markets, and the capacity to implement the plan.
- A competitive edge with which it is possible to attain an important market position.
- A committed and competent management team.
- The ability to attract venture capital.
Preconditions for funding
Business Finland can grant Young Innovative Company funding only if the company meets the following preconditions:
Age and size
- Business Finland must make the funding decision before the company reaches five years of age. The funding will cease, at the latest, when the company has been registered for eight years. (The company's registration date is of crucial importance.)
- The company must be classified as small, and registered in Finland. The number of personnel in a small company is less than 50, and either its maximum annual turnover is €10 million, or its maximum final balance is €10 million.
Ownership and background
- The company must be independent and administer its own IP rights.
- The company should not continue the operations of another company.
- The company should not been formed through a merger.
- Exception: The merged companies are less than 5 years old.
- The company should not have distributed profits.
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.
Funding levels
The maximum amount of Business Finland funding amounts to €1.25 million, of which a maximum of €500,000 may be funded as a grant, and €750,000 as a loan. Business Finland funds 75% of the eligible project costs.
Funding in three stages
The funding is granted in at least three phases. The funding for the first phase is a €250,000 grant; typically for the period of 6-12 months. Business Finland sets goals for the company in its funding decision, which, if realised, enable the company to move on to the next phase of funding.
Goals are typically related to:
- The development of turnover
- Ability to get funding from other sources
- 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.
How to apply
Before submitting an application for funding, please contact your Business Finland account responsible 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 forecast calculation template (xlsx).
- An annual financial forecast (previous accounting period and the three following periods). Template for an annual financial forecast (xlsx) (in Finnish)
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.
