Networks that accelerate companies towards growth
Aalto University's own business accelerator Aalto Start-Up Center has during its 20-year journey participated in the growth stories of almost 900 alumni companies.
The development of Aalto Start-Up Center’s alumni companies after their accelerator stage has been followed since 2003. Up to 83 per cent of the followed 500 alumni are still operating.
“According to the assessment, alumni companies have on average been fairly profitable. In addition, on average about one third of them are growing fast and meet the growth requirements of gazelle companies. The companies operate in more than 100 sectors, but their activities are, however, strongly concentrated in the IT sector and in management consulting”, summarises Marika Paakkala, Project Director of Start-Up Center.
According to the latest assessment, in which the accounting periods between 2013 and 2016 were examined, the number and proportion of gazelles were clearly on the increase compared to the previous four-year period. A total of 48 companies met the growth requirements of gazelle companies, which is seven companies more than in the previous period and more than ever before during the assessment.
Company growth statistics shows that the sales volume and operating profits of new companies vary greatly from year to year, depending on how successful the companies are in their growth management. ”The activities of Start-Up Center can be considered to even out this variation in growth and, as a result, growth takes place more in the long term”, says Paakkala. “This is because experience helps us anticipate the company's potential developments and enables us to point out potential critical issues to the entrepreneurs”, Paakkala continues.
Tools for long-term developing
Start-Up Center has a clear recipe for supporting companies.
”Most importantly, we offer the companies high-quality customer networks and partnerships that they will benefit from long after leaving the accelerator”, says Paakkala. ”In addition to that, the tools that entrepreneurs themselves can use to develop their company over the long term, whether related to management, marketing or, say, recruitment, are especially valuable to them.”
One of the alumni of the Start-Up Center is the management consultancy Gemic Oy, which has already been growing profitably for six years.
”From the point of view of our growth, the decisive factors have been internationalisation from day one, an uncompromising attitude to the quality of thinking and work, and the recruitment of capable and multidisciplinary cultural scientists and anthropologists”, explains Sakari Tamminen, the Managing Director of Gemic.
The greatest challenge on Gemic's pathway towards growth has been finding and recruiting top class thinkers. According to Tamminen, the best way an accelerator can support a company in the early stage is, in addition to the office facilities, by providing important contact networks.
According to the definition of the Danish magazine Børsen, a company is called a gazelle when it meets the following conditions: The company's turnover must increase by more than 100 per cent within four consecutive account periods, the turnover must not decrease in any single year compared with the previous, the turnover must be more than EUR 135 000 for each of the four financial years and the operating profit must be positive.
In Start-Up Center, the so-called gazelle companies are divided into four groups. Of these, adult gazelles are big and grow profitably, which means they meet all of the conditions of the Børsen magazine. Wasteful gazelles are big, but are not growing profitably. Fawns are still small, but growing profitably. Premature fawns are small and growing, but not yet profitable.
Aalto Start-Up Center
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