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Monday, March 25, 2013

Baltcap and Enterprise Estonia : The Rich Get Richer

Baltcap and Enterprise Estonia : Your Taxpayer Money at Work

According to their website: "BaltCap is the leading dedicated private equity and venture capital investor in the Baltic States (Estonia, Latvia and Lithuania). We have worked in the Region since 1995."

The information on the European Venture Capital Association website shows that BaltCap manages over 100 million euros of investments (search for "BaltCap AS").

Indeed they have an impressive track history, with a number of investments in the Baltics, and 29 exits since they started (though only 4 since 2010, but an impressive feat nonetheless). The EU liked them so much that they've given them 44 million euros over the past few years to invest in the Baltics (see page 3).

So what do we have? Here's a venture capital company with plenty of funding, over 100 million euros under management, and a track record for success. What more could they want?

If you're a frequent reader of this blog, then you can guess the answer. They got money from Enterprise Estonia:

Over 136,000 euros for "export development." Does a venture capital fund with over 100 million euros under management really need government assistance? We don't think so.


  1. So...

    Baltcap is successful and EAS should not give it money.

    The Viljandi incubator is unsuccessful and EAS should not give it money.

    To whom should EAS be giving money?

    1. From what I read in their blog post, I don't see that BaltCap really needed the money.

      The Viljandi incubator seems a bad project to begin with. Even 10 million euros wouldn't save that.

      To me, I think EAS should be spending money on infrastructure projects and projects that raise the standard of living for many. When the money is used to build better roads or improve education facilities, that seems like a good use of money, since society as a whole benefits.

    2. Douchebag may refer to:
      A pejorative term for an arrogant or obnoxious person

      For sure do not give it to another Andrei Douchebag, a shining example of an Estonian x comedian that failed due to his inability to take negative feedback, and improve while the entire time being arrogant and obnoxious. -- And threatening foreigners and his audience for not getting his jokes. That is probably the best joke of all.

      I see this same trend with many startups here. When you approach a person in charge of sales for example, that has no experience, they just try to talk over you, without listening to a damn thing, while the results come in at zero every month. Then you see a presentation pitching that there is NO competition in the world, which is usually always false and gets ripped apart instantly with anyone with half a brain, and which shows a serious lack of market research. Or more importantly, the natural mental instinct to block reality and think, that there exists nothing in the market -- simply because it must be so ( I don't feel I need to do market research). Then a group of those jerk offs get together, and then become shining examples of leadership driving the new guys to their instant death and killing any potential good team if one even existed. Worse killing the future of investment into the culture being developed with zero revenue results.

      I think its a matter of time before the reality kicks in and the awakening happens.

  2. We have a saying in Estonia: "The one who asks is the one who gets" ;)

    ...and Viljandi incubator is pure example of socialism for rural areas. Most of the money goes to administrative and management costs. Those public sector workers would be out of jobs if EAS would pump money into system. It's just an alternative way to keep useless people on payroll...but I think it's still better then killing any life in small towns. People on EAS payroll are happier then people on unemployment benefits :)

  3. So why don't you raise €100m yourself and invest it into Estonian infrastructure or education? EAS would be happy to buy you tickets so that you can go out and bring in the money. That also helps to keep airlines flying to Tallinn - good for society as a whole etc.

    1. Wouldn't it be a lot easier to just use EAS money that is already being wasted BaltCap and others like it?

  4. How about spend it on kick ass education, training teachers, increasing pay. Estonias future is in raising brilliant minds and advances in elearning. Spend it on the best teachers and cutting edge university facilities promoting the next generation. Increase University rankings and make it a hot spot to attract global tallent. Spend that money on advanced education designed to produce the next gen of skills demanded by the future.

  5. The problem with EAS 'experts' is that they have no technology background, even the 'technology division'. EAS might (repeat: might) go on with tourism, but forget about applying for grants for purchase of production machines or technology. A bunch of jerks with Harvard MBA but they would not be able to open the hood of their car. They look with arrogance and incompetence to technology investments. This is our experience.