The prospect and challenges of start-up funding in Finland : A case study on a social media based start-up
Choudhury, Mustafa Akbar (2017)
Pro gradu -tutkielma
2017
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi-fe201708087919
https://urn.fi/URN:NBN:fi-fe201708087919
Tiivistelmä
A start-up is a company that starts operations from an idea, and it is now in the first stage of its operation. This research was conducted on a photography related social media start-up based in Finland. The digital photography market, photography related product and services market, and social media market are growing all over the world and expecting to grow with 6.1% rate between 2016 and 2021. Due to increasing photography trend in photo sharing sites, there is a massive need for photos everyday not only for big corporations but also for SMEs and even for individuals.
Like any start-up irrespective of country of origin, start-ups in Finland also suffer from the most pressing problem of fund raising. Based on a single case study which includes multiple interviews with key persons from the case company, this study found that there are country-specific and situational challenges start-ups face in Finland. The most important challenge to be faced by start-ups in the digital platform is to showcase a visible and working business model which is very difficult to overcome by the entrepreneurs in this sector. This limits the possibility of getting funding from external sources such as venture capitalist or angels, who also give much weight to the team composition. After unable to attract external fund, the case company adopted some bootstrapping financing methods to run the company without any external funding. While the company once utilised crowdfunding platform to raise funding, later they found that government regulations inhibit accepting donation-based crowdfunding from the backers. This study also uncovers that the case company undertook early internationalisation to increase the user base and varieties of content which is essential for social media based photo sharing company. They also believe this approach will enable them to draw the attention of the investors by increasing the legitimacy of the firm.
Like any start-up irrespective of country of origin, start-ups in Finland also suffer from the most pressing problem of fund raising. Based on a single case study which includes multiple interviews with key persons from the case company, this study found that there are country-specific and situational challenges start-ups face in Finland. The most important challenge to be faced by start-ups in the digital platform is to showcase a visible and working business model which is very difficult to overcome by the entrepreneurs in this sector. This limits the possibility of getting funding from external sources such as venture capitalist or angels, who also give much weight to the team composition. After unable to attract external fund, the case company adopted some bootstrapping financing methods to run the company without any external funding. While the company once utilised crowdfunding platform to raise funding, later they found that government regulations inhibit accepting donation-based crowdfunding from the backers. This study also uncovers that the case company undertook early internationalisation to increase the user base and varieties of content which is essential for social media based photo sharing company. They also believe this approach will enable them to draw the attention of the investors by increasing the legitimacy of the firm.