Local venture capital sets records

This way, it’s not only the money earned by the startups that is circulating, but also the experience gained in building startups. Taavi Tamkivi, who has worked in both Skype and TransferWise, has for the last year dedicated himself to his startup Salv. According to Tamkivi, some funding on the market comes from people who have helped make startups success stories, monetized their options and who are now investing their proceeds in their or someone else's company, but their impact on the market is not significant. As an early TransferWise employee himself, this is also how Tamkivi earned the start up capital.

"Investing a small amount of money is of secondary importance. Above all, it is the knowledge and experience on which they can build something better. That's what really helps,” said Tamkivi. "There is still enough money, both stupid and smart, in Estonia and in the rest of the world, but people who have actually built products and technologies globally are far more scarce than the money that is being invested."

Tamkivi recalls that when he left TransferWise a few years ago, he had free time and it was easy for him to help friends and acquaintances who were cracking their brains in their companies to figure out how to solve problems. "I had gone through this journey twice myself. I was able to tell them about the challenges of team and customer base growth and expanding into new regions. Based on my sector knowledge, I was able to help them,” he said.

Tamkivi says that when he studies newcomers he looks not only at the names of the founders, who are often unknown, but also finds out who is helping the startup. "When I see that my former colleague with whom I shared a desk for 7 years is helping another company, I instantly get interested in also helping out. This is a very exciting network we have here and it’s not embarrassing or difficult to ask someone for help, since everyone is very open to interesting ideas and giving feedback.”

According to Tamkivi, it doesn’t mean that investors are the smartest ones there, but thanks to previous work contacts, it is very easy to connect someone with old colleagues from the other side of the world. He says that there are plenty of mentors, but it tends to be the same people all over again. "There is definitely room for sharing experience. Not all mentors need to be the types of Taavet Hinrikus or Martin Villig. There are strong professionals working in highly technical fields who have never been discovered by the media. For example, payment fraud detection that I worked on in TransferWise and also in Skype, which is not going to grow the company’s business, but is essential to avoid problems. There is a great deal of this type of industry-specific advice in the minds of people that could be shared more than it is done today.”

One of the newcomers, Markus Lember the founder of Montonio, says that a new startup that is looking for capital depends a lot on the specific sector in which it operates. "In some sectors there seem to be too many startups and then you have specific sectors in which investors are very active in.” He adds that since Montonio is a fintech, finding investors was not that hard. “I may even say that investors rather found us than the other way around, so we did not have to work very hard to attract funding.”

Montonio got a flying start partly because Lember and his idea were selected to Alpine House, a program run by Rain Rannu's Superangel Foundation, which took young startup entrepreneurs to Silicon Valley. "The main partner who deals with us is Veljo Otsason and he is like an additional member to our team. We are in the same office with them and discuss our achievements and problems daily. This is extremely useful,” said Lember, who is sharing office with Superangel in Tallinn.