Live crowdfunding tested out in Finland
There is a buzz of excitement at Helsinki City Hall. Large numbers of startup entrepreneurs and investors have assembled at PitchHelsinki, held this year for the seventh time. The event is making history: for the first time, live crowdfunding is possible from around the world.
- PitchHelsinki took place 20 November and was organised by YritysHelsinki and the City of Helsinki in collaboration with Invesdor, FiBAN, and Aalto Start-up Center.
- During the event, 49 individual investments amounting to a total of more than 43 000 euros were made.
- The event gathered more than 300 participants, and it was followed in more than 40 countries.
Rami Korhonen, startup entrepreneur and CEO of the company Playmysong, is the third presenter on stage. He has exactly five minutes to impress investors with his presentation on a new-generation mobile jukebox service, which makes music interactive, for example, in bars and restaurants.
“Through this app, customers can see a bar’s playlist and request songs for free,” Korhonen says. “Our goal is to make the music experience fun and sociable everywhere in the world.”
Crowdfunding was a new concept for Playmysong, and they were open to the idea. The company was interested in the notion that it could potentially acquire a broad base of supporters, although there were no guarantees. The investors had one day to take part in the investment rounds.
Korhonen’s pitch was a success, and the end result exceeded his expectations: In just 16 hours, Playmysong inspired 35 investors to put up a total of 25 000 euros. The company was also deemed the winner of the Best Startup Pitch competition, along with co-winner Uniqul, developer of a face recognition payment system.
“We secured three investors from the UK, for example, which proves that having an international reach brings concrete results,” Korhonen says. “We amassed a broad group of investors who believed in our story and received direct feedback on our business idea. The future looks bright!”
A modern model
“It was great to see how boldly these startup entrepreneurs threw themselves into the ring and how broad global interest was,” Mäkelä says.
Mäkelä says that crowdfunding puts a completely new spin on how growth companies traditionally secure funding. In the traditional investment model, the first step is to attract the interest of investors, followed by a negotiation of the terms, which are often led by the investors. In crowdfunding, it’s the company that first establishes the terms of the investment rounds, and the investors participate according to those terms.
“There’s a lot of talk in Finland about the need for increasing the support provided to startup entrepreneurs,” Mäkelä says. “We have introduced a tool that lowers the threshold for and enables a specific kind of group action to take place. Investing is now possible for a wider range of people – more easily and with smaller investments than before.
Text by Sari Okko
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