Develop a startup's international business

Business Finland may grant Young Innovation Company funding if the following conditions are met:

Ability for rapid growth

• A scaling business model and a potential for rapid growth in international markets.
• The functionality of the business model has been demonstrated, and the company also has paying customers from international markets.
• A straightforward and target-driven internationalization strategy and the ability to implement the plan.
• A competitive edge that provides a significant market position.
• The opportunity and will to obtain external funding/private capital investments to support international growth.

Committed team

• Your company employs a full-time management team and the key people needed for rapid growth.
• The key personnel employed full-time by the company has a significant ownership interest in the company. Typically, the key personnel employed full-time by high-growth companies have an ownership interest of at least 50%.

Independent decision-making powers and IPR

• Your company has independent decision-making powers over its business activities, and is not a subsidiary.
• The company owns the IPRs significant for its business.

In addition, the following requirements apply to the Young Innovative Company funding

• The company must have been in operation for less than five years before the funding decision for the first period is made. The funding will cease, at the latest, when the company has been registered for eight years. If your company is part of the Group, all group companies must be under five years of age at the time of the financing decision and under eight years of age before the financing ends. The age is calculated from the registration date.
• The company is small sized: fewer than 50 employees, and an annual net sales or balance sheet total of up to EUR 10 million.
• At least 10% of all costs have been allocated to research and development during one of the previous three years.
• Your company has not continued the business activities of another company, and the product has not been commercialized previously in another company.
• Your company has not been established through a demerger. Exceptions include a situation where demerged companies have been in operation for less than five years.
• Your company is not listed, and it has not distributed any profit. Profit distribution means the distribution of dividends or assets from an unrestricted equity reserve, or the purchase and redemption of treasury shares.

Funding granted by Business Finland is discretionary and, in addition to the company's financial standing and the content of the project, the assessment covers the company's resources to carry out the project, the proportion of public funding in the company's previous years, and the implementation of previous projects as well as the use of their results.

The Young Innovative Company funding will be divided into three grant phases, which will be evaluated at the end of each phase. In the phases, funding can be used, for example, in the following ways:

• Developing international business as a prerequisite for rapid growth
• Investing in international sales and marketing
• Strengthening the team
• Acquiring external financing to support rapid growth.
• Developing growth strategy, processes and organization to support rapid business scalability

Phase evaluation

• The achievement of the project goals will be evaluated at the end of each Young Innovative Company funding phase. Achieving the goals is one of the requirements for proceeding to the next phase. Goals will be defined together with the company based on its business plan, and they will be registered in the funding decision.
• In addition to achieving the goals, the company's financial situation and conditions for rapid growth affect the future funding opportunities.
• If a company has presented their company and ideas to the evaluation panel the assessment is only advisory. The panel activities apply to financing decisions made before 1.11.2022.

Ensure that you have adequate funds for self-financing

• Business Finland's funding covers up to 75% of the project costs.
• The grant for phases is paid retrospectively on the basis of interim and periodic reports, so your company must also have other funding to finance its activities.
• In case of loan of third phase, an advance of 30% of the loan is available. Other loan installments will be paid on the basis of interim reports and the final report.
• In addition, in order to finance rapid growth, the company should have a credible financing plan. Companies often also have significant external financing, typically from venture capitalists.

Get the following financial matters in order

We cannot grant your company funding if:

• Your company has not submitted financial statements to the Finnish Patent and Registration Office, or your company's financial statements have not been audited in accordance with the Auditing Act
• Your company has not submitted an up-to-date statutory notification of beneficial owners to the trade register
• Your company has tax debts for which a payment plan has not been agreed on with the tax authorities
• Your company has arrears, payment defaults or other outstanding financial obligations related to previous loans granted by Tekes or Business Finland.

Read more about the funding terms and conditions

The Funding Terms and Conditions describe the costs for which Business Finland can provide funding, how we monitor your project costs, and how you should report on the progress of your project.

Funding terms and conditions

Please also read the guidelines for the Young Innovative Company projects implementation and reporting

Project's implementation and reporting

Send your application and attachments via our online service. You can also keep track of the processing of your application in the online service.

The company must have been in operation for less than five years before the funding decision for the first period is made. Submit your Young Innovative Company application in good time, no later than two months before your company turns five.

Go to the online service

Define objectives for the Young Innovative Company phase

In the application form, you will be asked to set 2–5 measurable goals for your project. The goals must be based on the company's business plan and be linked to concrete outcomes of the project and the development of your business. The goals of the Young Innovative Company are recorded in the funding decision, and Business Finland will monitor their achievement. Achieving the goals will have a significant impact on the progress of the Young Innovative Company funding and other funding from Business Finland.

Examples of project goals:

• development of turnover and especially export turnover
• ability to get capital investments or funding from other external sources
• strengthening of resources
• expanding into new markets

APPENDIX 1: Project plan

Attach a project plan and a separate business plan to the application if it is not included in the project plan. Fill in the fields in the application form as usual.

In the project plan, we ask you to describe at least the following:

• Description of your company and market situation
• Project overview and starting point
• Connection of the project to the company business plan
• Project tasks, resourcing, results to be achieved, scheduling, costs

We also require an initial plan for all the funding phases. As the Young Innovative Company funding progresses, a separate project plan must be drawn up for each phase.

APPENDIX 2: Auditor's report

The funding application must be accompanied by an auditor's report on the company's compliance with the conditions for granting Young Innovative Company funding. The prerequisites have been presented in the When should I apply for funding? section. Among other things, we require that at least 10% of the company's total costs have been allocated to research and development activities in one of the three years preceding the application. To prove this, the company can use either Statistics Finland's form on research and development expenditure or Business Finland's calculation.

• Auditor's report on the company's eligibility for Young Innovative Company funding (docx) 
• Business Finland's calculation template for the company's research and development expenditure (Excel)
• Statistics Finland's form can be found on Statistics Finland's website

APPENDIX 3: Information about your company's finances

Please submit the following financial information on your company with the application:

• an income statement that is no more than two months old, and a balance sheet ledger for the current accounting period
• monthly cash flow forecast (Cash flow forecast in tabs 1, 2 and 3) (calculation template xlsx)
• annual forecast of profit and funding (Cash flow and profit and funding forecast (T2/T4/T7 in tabs 4, 5 and 6)) (calculation template xlsx)

You can submit the information using Business Finland's calculation templates or by other means, for example as part of a business plan.

Eligible costs

Business Finland can accept costs starting from the date the application was submitted, at the earliest. The progress of the project is reported in accordance with the schedule indicated in the financing decision. The report and the expense report are sent through the Business Finland's online service.

Eligible costs

• Wage costs and related personnel costs (up to 30%)
• Purchases (e.g., travel, services, materials, supplies, and equipment)

Costs that are not eligible

• Purchased services from associated companies (with the exception of services from companies belonging to the same group)
• Voluntary insurance payments, gifts and stipends
• Other costs that include public aid
• Measures related to exportation, i.e., overhead charges directly related to export volumes or to the establishment and operations of a distribution network or other export operations.

Procurement must comply with the Act on Public Procurement and Concession Contracts (Procurement Act guidelines).