25 Estonian private investors gathered last week to found Estonian Business Angels Network (EstBAN) with an aim to grow the local seed stage investments asset class.
The newly formed association’s board composes of seasoned entrepreneurs and investors, amongst them Ivar Siimar, Allan Martinson, Harri Männistö, Marek Kiisa, Peeter Klanberg, Andrei Korobeinik and Hardi Kampus.
EstBAN stresses that increasing the amount of early stage investments will eventually result in a growth in the Estonian export sector.
While angel investment practice in Estonia is relevantly young, there are already a number of examples – such as GrabCAD, Cherry Media, Cleveron, Modesat and Marinexplore – to validate the claim.
EstBAN will leverage their members’ track record and best practices in successfully connecting the startups and investors. The members of the network can invest either individually or in syndicate.
“Syndication increases portfolio profit potential and minimizes the failure risk. Syndicated investments are very common amongst US angels and the practice is also gaining popularity in Finland”, says Harri Männisto, one of the founding members of EstBAN and also a member in the Finnish Business Angel Network (FIBAN) and the European Business Angel Network (EBAN).
The network plans to grow its active membership to 100+ members during the next 3 years. “EstBAN is open to everybody who is willing to contribute time and funds to high growth potential early stage businesses”, says Ivar Siimar.
EstBAN sides well with other players in the ecosystem. Cooperation with the Estonian Development Fund, the state-owned venture fund that matches their investments at 1:1 ratio with private money started already prior the the formal establishment of EstBAN. There is also active information and knowledge sharing with Finnish peers.
“Well operating venture capital market plays a significant role in innovation, economic growth and creation of new jobs. EstBAN will contribute to Estonian startups’ competitiveness and success” seconds Margus Uudam, the chairman of the board of the Estonian Venture Capital Association.