Finland’s startup ecosystem has generated plenty of positive headlines in recent years. Beneath the surface, however, a concerning trend is emerging: the number of new startups being founded in Finland has been declining for several years. While Finnish startups raised a record amount of funding in 2025, a significant share of that capital was concentrated in only a small number of companies.
The solution to Finland’s growth challenge lies in startups. They are no longer a marginal phenomenon but an increasingly important part of the national economy. In 2023, Finnish startups generated more than €12 billion in revenue and employed approximately 50,000 people. To sustain this growth, it is essential to ensure that the startup ecosystem remains vibrant and that sufficient funding is available, particularly for companies in their earliest stages.
Finland is home to one of the world’s most active angel investor networks. At least one-third of the Finnish startup ecosystem’s revenue and jobs are generated by startups that have received angel investment. Yet early-stage funding remains dependent on a relatively small number of individual investors.
This is a problem because early-stage financing often determines whether the next Oura or Framery is built in Finland or never gets off the ground at all.
Statistics from Finnish Startup Community and FiBAN show that angel-backed startups also employ a more diverse workforce than the average startup. Between 2005 and 2022, startups that received early-stage funding employed proportionally more young people and individuals over the age of 60 than other startups. This makes them exceptional labour market actors at a time when extending working careers and improving youth employment are key societal objectives.
In early-stage companies, a large share of investment capital is directed straight into personnel costs. Every euro invested is quickly transformed into jobs, skills, and tax revenue. Moreover, most startups create high-productivity work that contributes significantly to long-term economic growth.
One concrete reform to strengthen Finland’s startup ecosystem would be the introduction of an angel investor tax incentive. Such a scheme would encourage private individuals to invest more capital in early-stage companies. A useful model can be found in the United Kingdom’s Seed Enterprise Investment Scheme (SEIS), under which investors can claim income tax relief on qualifying startup investments in the year the investment is made.
The mechanism is straightforward. By reducing investment risk through taxation, more private capital is directed toward early-stage companies. This increases access to funding, enabling more startups to be founded and existing companies to scale faster.
While tax revenues would decline in the short term, the key question is the long-term net impact. If a tax incentive significantly increases investment activity, it will lead to more companies, more jobs, and ultimately higher tax revenues. In the United Kingdom, the SEIS model has helped address startup funding gaps, improve cash flow, enable the recruitment of key personnel, and support product development.
At its core, this is about sharing risk. Without incentives, the burden of risk falls largely on individual investors, leaving many promising ideas without the funding they need. Through targeted tax policy, the state can share part of this risk while simultaneously accelerating economic growth.
Finland already has the talent, entrepreneurs, and ideas. What we need now are policy decisions that turn this potential into growth, jobs, and future success stories.
In addition to this opinion piece, we have published a more detailed analysis of the topic, available in Finnish here.
Amir Hassan
Economist
Finnish Startup Community
Ivan Helin
Data Scientist
Finnish Business Angels Network (FiBAN)