Estonian Development Fund has launched new seed business incubator, SeedBooster. The purpose of the incubator is to help develop early-stage businesses to get them mature enough for venture capital financing.
However, the leader of the SeedBooster project, Andrus Oks, comments that the new incubator is actually nothing that much new – it is in fact part of activities Estonian Development Fund has performed already for some time, now just productized and branded. Targeted firms are ones operating in Estonia with a strong desire and possibilities for fast international growth.
So far SeedBooster has taken in for example programming analysis firm Programeter (which just won the runner-up prize in the elevator pitch contest) and website platform developer Edicy (our previous coverage) under its wings. The incubator is looking to include further 5-6 new projects within the next month.
Interestingly, the model of SeedBooster according to Andrus is not to invest in the firms or take any equity whatsoever. Instead, a limited set of other financing components (like grants) and just strategic development effort will be directed to the firms,. How successful this approach will be, time will tell, but at least it can be somewhat more compelling to entrepreneurs.
The governments in the region are indeed thinking hard to find ways to catalyze a working entrepreneurial ecosystem into existence. The Finnish government is initializing a new incubation program as well: the Ministry of Employment and Economy is ramping up a new startup accelerator program Vigo (our coverage).
The purpose of Vigo is especially to improve the efficiency of the Finnish early risk capital market by the government, but by having the investment decisions and incubation of firms done by private sector teams of experienced entrepreneurs and mentors. The bar has been raised quite high as there were 43 different teams applying to the program and only 3-5 will be selected by mid-June. According to the grapevine quite a lot of the well-known Finnish senior players are involved.