vuosikirja / yearbook 2007 – 2008 - Suomen pääomasijoitusyhdistys ry

METHODOLOGY AND DEFINITIONSThe Finnish Venture Capital Association(FVCA) uses the same methodology as theEuropean Private Equity and Venture CapitalAssociation with regard to activity surveys.The data is collected using an online surveythat has been developed by the FVCA andis based on the EVCA’s annual survey questionnaires.A web-based system was launchedin the beginning of 2003 when the data forthe 2002 activity survey was collected. Dueto the new on-line survey and a more developeddatabase, in 2003 the FVCA was able toconduct quarterly surveys during 2003 for thefirst time. The 2006 activity survey includedin this annual report marks the fifth anniversaryof the system.Sample design and selectionThe survey is targeted at the full members ofthe FVCA. These companies represent almostevery venture capital and private equity companyin Finland. There are cases in which investmentsare excluded:1. Companies that make investments in otherprivate equity funds (i.e. funds of funds)are excluded in order to avoid the doublecountingof investment activities.2. Investments made by corporations are excluded,if a corporation does not have aseparate management company that managesits funds.3. Investments by business angels are excluded.4. The survey does not take into account directinvestments made by foreign investorsin Finland. Investments made through thepermanent Finnish office of a foreign privateequity company can be included.The 2006 activity survey was targeted at 39companies. The response rate was 79 percent,and the sample includes all the largest privateequity companies in Finland.FundraisingFunds raised are shown for the home marketof the private equity company, even if the investmentpolicy is to invest in another geographicmarket. It is important to note thatthe calculation of fundraising is dependenton the classification of the individual privateequity company. Whether a company is independent,semi-captive or captive determineshow fundraising is calculated.For independent companies, the issue of fundraising is straightforward with any funds raisedduring the year being treated as “new” finance.For captive and semi-captive investors, newinvestment activity undertaken via their captivevehicle (for instance, their balance sheet) is recordedas new funds raised. Funds raised by captiveand semi-captive companies from sourcesother than the parent organisations are recordedas independent funds raised. Fundraisingalso includes capital gains generated by companiesand available for re-investment.Investments and divestmentsWhile fundraising is allocated to the homecountry of the private equity company, theallocation of investments is determined bythe structure of the company’s local organisation.Therefore, an investment made througha local office in the “destination” market willbe allocated to that country’s statistics. Onlyforeign direct investments that bypass localoffices in those countries are included inFinnish statistics. This also means that directinvestments in Finnish companies made byforeign private equity companies are not includedin the Finnish statistics.staticticts53