Methodology and Definitions

The industry analysis conducted by the Finnish Venture Capital Association (FVCA) is based on the PEREP_Analytics private equity database, which is maintained by the European Venture Capital Association (EVCA). The information for the PEREP_Analytics database is collected via an online questionnaire for private equity investors, and complemented with public sources of information. The Finnish Venture Capital Association joined the new PEREP_Analytics database in the beginning of 2008. In addition to the FVCA, so far seventeen other private equity associations have joined the new database. Overseeing the activities of the PEREP_Analytics database is a separate Governing Board consisting of leading European academics in the field.

Sample Design and Selection

In Finland, data for the PEREP_Analytics database is gathered from full members of the FVCA, which represent nearly every community involved in private equity investing in the country. Investments listed below are not included in the statistics.

  • Any company investing in other private equity funds (i.e. fund-of-funds) has not been included. This is to avoid double-counting of investment activities.
  • Investments by companies have not been included unless the company has a separate entity for investment activities, also known as a corporate venturing unit.
  • Investments by business angels have not been included.Direct investments have not been included in the questionnaire.
  • If a foreign private equity firm has a permanent office in Finland, investments made through this office have been included in the statistics.


The capital raised by private equity funds is considered to be targeted at the domestic market of the private equity firm, even if the investment policy of that fund is to invest into a different geographic market. The assessment of fundraising activities does, however, depend on whether the private equity firm in question is independent or captive (investing directly from its own internal sources, for instance the balance sheet).

The capital raised by independent private equity firms and the capital gathered by captive investors adds up to the total amount of new funds raised. The total amount of capital raised within a certain private equity market is calculated by adding to this figure the capital gains of private equity firms, as these can be re-invested.

Investments and Divestments

Data on investments and divestments is collected from both industry and market perspectives. In the industry statistics, the data on investments is organized according to the location of the investing private equity firm, whereas in the market statistics the data is organized according to the location of the portfolio company. This same approach applies to data on divestments. The investments and divestments made by Finnish private equity firms both domestically and abroad are included in the industry statistics. The market statistics include investments in and divestments from Finnish portfolio companies, made by both Finnish and foreign investors.

The total number of investments is calculated from the number of investments made through each investment channel (for example each separate fund) and the number of direct investments by captive investors. Thus if for example an independent private equity firm manages three separate funds and invests capital from each fund into a portfolio company, this is counted as three separate investments. Similarly, if one private equity firm invests into a portfolio company at different times during the year, these investments are also counted as separate events.

Initial investments are also determined based on the number of funds making investments. If, for example, a portfolio company has already received capital from a certain private equity fund, and another fund then invests into the same company, the latter investment would also be considered as an initial investment for the fund in question from the fund's point of view. However, from the portfolio company's point of view it would be a follow-on investment. The data on initial and follow-on investments is based on initial and follow-on investments made by private equity firms as well as initial and follow-on investments received by portfolio companies.

Statistics on divestments can be used to follow the development of the Finnish private equity portfolio. Divestments are valued at cost rather than at the actual sales price. Thus they do not reflect the profit or sum that private equity firms actually earn.

The number of divestments has been determined in a similar fashion to the investments, in other words each divestment has been counted as a separate event. Thus a private equity firm can execute several divestments from the same portfolio company in the course of a year.

When examining the investment and divestment statistics, it is worth noting that from 2008 onwards the expansion stage has been replaced by two separate stages: later stage venture and growth.

Capital Under Management

The capital under management is calculated as the sum of the following parts:

  • The value, at cost, of capital invested in the portfolio companies but not yet divested
  • The capital committed to but not yet invested in portfolio companies
  • The capital not yet invested in or committed to portfolio companies (fund commitments)

In the case of captive investors, assets in the balance sheets available for investment are not included in the capital under management. If a private equity firm invests solely from its balance sheet, the capital under management is calculated as the sum of the first two bullet points above.


Starting at 2008, there has been changes in the definitions of investing stages and industry sectors compared to previous years. In investing stages, the expansion stage of previous years has been divided into later stage venture and growth. The industry sectors consist of seven large sectors and smaller sectors under those.

Investing Stages / Type of Financing

Seed: Financing provided to research, assess and develop an initial concept before a business has reached the star-up phase.

Start-up: Financing provided to companies for product development and initial marketing. Companies may be in the process of being set up or may have been in business for a short time, but have not sold their product commercially.

Other early stage: Financing to companies that have completed the product development stage and require further funds to initiate commercial manufacturing and sales. They will not yet be generating a profit.

Later stage venture: Financing provided for the expansion of an operating company, which may or may not be breaking even or trading profitably. Later stage venture tends to be financing into companies already backed by venture capitalists, therefore they would be C or D rounds of financing.

Growth: It is a type of private equity investment, most often a minority investment but not necessarily, in relatively mature companies that are looking for capital to expand or restructure operations, enter new markets or finance a significant acquisition without a change of control of the business. As round of financing, growth capital tends to be first private equity backing of the company. Additionally, all investments made by buyout funds into venture type of stages should be defined as growth capital.

Bridge financing: Financing made available to a company in the period of transition from being privately owned to being publicly quoted.

Rescue/ Turnaround: Financing made available to an existing business, which has experienced trading difficulties, with a view to re-establishing prosperity.

Replacement Capital / Secondary financing: Minority stake purchase of existing shares in a company from another private equity investment organization or from another shareholder or shareholders.

Refinancing bank debt: To reduce a company's level of gearing.

Management buyout (MBO): Financing provided to enable current management and investors to acquire existing product line or business.

Management buyin (MBI): Financing provided to enable a manager or group of managers from outside the company to buyin to the company with the support of private equity investors.

Public to private: A transaction involving an offer for the entire share capital of a listed target company for a purpose of delisting the company, management may be involved in the offering.

Other PIPE: A private investment in public equity as a minority or majority stake without taking the company private.

Other leveraged buyout: Financing provided to acquire a company (other than MBO, MBI, public to private or other PIPE), by using significant amount of borrowed money to meet the cost of acquisition.

Mapping the above stages into 7 Yearbook stages

Seed:                             Seed

Start-up:                        Start-up, Other early stage

Later stage venture:       Later stage venture, Bridge financing

Growth:                         Growth

Rescue/Turnaround:       Rescue/Turnaround

Replacement Capital:     Secondary Purchase/Replacement Capital, Refinancing Bank Debt

Buyouts:                         MBO, MBI, Public to private, Other PIPE, Other leveraged buy-out

Mapping the above stages to Venture Deals and Buyout Deals

Venture Deals:   Seed, Start-up, Later stage venture
Buyout Deals:    Growth, Rescue/Turnaround, Replacement Capital, Buyouts

Composition of Industry Sectors


• Crop cultivation
• Fishing, hunting and animal husbandry
• Forestry
• Agriculture: other

Chemicals and materials
• Organic chemicals
• Specialty chemicals
• Materials
• Plastic
• Chemical and materials: services
• Chemical and materials: other


Business and industrial products
• Business and industrial products
• Industrial measurement, sensing and control equipment
• Manufacturing: other

Business and industrial services
• Business and industrial services
• Construction
• Transportation services
• Means of transport: manufacturing and related services
• Transportation: other


Consumer goods and retail
• Consumer products manufacturing
• Consumer products retailing
• Specialty retailers
• Consumer goods: other

Consumer services: other
• Educational and training products/ services
• Hospitality, sports and entertainment facilities
• Public service (excl. education)
• Restaurants, food services
• Consumer services: other


Energy and environment
• Alternative energy
• Coal and metal ores
• Gas and oil
• Electricity supply
• Energy related services
• Environmental services
• Energy: other


Financial services
• Financial institutions and services

Real estate
• Real estate


• Broadcasting, publications and content providers
• Communications and networking services
• Communications equipment
• Telecom services, tele/ videoconferencing equipment and serv., VoIP
• Telecom hardware: other
• Telecom carriers
• Internet technologies
• Communication: other

Computer and consumer electronics
• Computer systems and peripherals
• Consumer electronics
• Computer hardware: other
• Application-specific integrated circuits
• Electronic components
• General purpose integrated circuits
• Semiconductors: other
• Business related software
• Connectivity, networking and communication software
• End-user software
• Systems software
• Software: other
• Data management services
• Computer related services: other

Life sciences
• Biotechnology
• Drug development technologies
• Healthcare institutions and services
• Medical information systems
• Medical equipment and related software
• Medical devices and supplies
• Pharmaceuticals and drug delivery
• Healthcare: other

High-Tech Company

A company that has exclusive ownership of certain intellectual property rights such as design rights, patents, copyrights etc. that are critical elements in adding value to the company's products and business and that are being developed in-house by the company's permanent staff. Although companies that possess these attributes are not limited to specific industries, they are most frequently found in the telecommunications hardware, internet technology, computer hardware, software and computer services, electronics, semiconductors, biotechnology and medical related instruments and devices.

Cleantech Company

A company whose activities include a diverse range of products, services, and processes that are inherently designed to provide superior performance at lower costs, greatly reduce or eliminate environmental impacts and, in doing so, improve the quality of life. Clean technologies span many industries such as agriculture, energy, manufacturing, transportation and water.