Case: CaddieON

CaddieOn LogoProfessional athletes use all available information to improve their performance. In golf, collecting the data requires a load of statisticians who follow the players and record each shot. Amateur golfers would love to have the same means to improve their performance as well. However, all the prior solutions either require too much concentration on manual data collection or one needs to pay big money for a live caddie to do the job. CaddieON allows automated golf data collection. The patent pending product enables the round events to be recorded shot by shot, shared and broadcasted in real time. Even better, player can compare his performance with other players and compete in all game details, not only with total round score. Instead of gadgets, you get to focus on game and play better. Now, that’s a strong value proposition for a golfer.

The CaddieOn wristband automatically detects the strokes and the club used for it. There's no easier way to keep track of your golf game play.

The CaddieOn wristband automatically detects the strokes and the club used for it. There’s no easier way to keep track of your golf game play.

CaddieON has launched the product and starting the sales in Finland during summer 2013. Prior to investment it has already announced cooperation with half a dozen golf courses in Finland and collected crowd funding from Finnish golfers worth 13 thousand euro.

”There are 60 million golfers in the world. CaddieON will lead the way in giving the golfers most value for their golf and making golf more rewarding, enjoyable and interesting than ever. The international market potential is worth several hundred millions. We wanted to have an investor who can help us with business models as well as finding the right partners. Butterfly was our best choice and shares our passion for lean customer driven development.” (Tuomo Lalli, CEO of CaddieON, Inc.)

In addition to automatically created golf game play record the CaddieOn mobile app has all the features you would expect from a golf app and there's many more coming up.

In addition to automatically created golf game play record the CaddieOn mobile app has all the features you would expect from a golf app and there’s many more coming up.

Butterfly invested into CaddieON because the patent pending product concept allows superior ease of use and thus stronger value proposition for golfers in a market worth of several hundred millions. Furthermore the business model offers several avenues for monetization. The CaddieON team has shown both the ability and commitment. Finally their ongoing crowd funding campaign has already gained significant traction among their future customers. Butterfly investment will be used to validate value proposition and establish the required metrics to leverage the valuation up for follow-on financing rounds.

Case: WhileOnTheMove

While On The Move logoThe first product of WhileOnTheMove is Daisy – a complete day care solution. Daisy includes mobile applications to day care employees and child-minders, mobile/web service to day care management and mobile/web service to parents. Real life tests have shown that in a city of 100 000 habitants Daisy can relocate over 65 000 hours of manual paperwork into more important tasks; taking care of the children. Furthermore a single 24/7 daycare unit can save up to 180 000€ a year by deploying Daisy to allow parents easily inform their weekend day care needs. This value proposition together with the fact that Europe alone represents over 100 million euro market potential for such product clearly makes the case.

Before the investment WhileOnTheMove has launched their product, secured several major customers, such as cities of Oulu and Jyväskylä as well as partnered with market leading distributor in France, who has already made the first sale there.

”From the very beginning WhileOnTheMove has targeted to international markets. Today we have closed our first international partner agreements and deals. The next step is to boost even more on international sales. To achieve the goal we need both funding and guidance. We see Butterfly as a perfect partner helping us in both.” (Kari Kivistö, CEO of WhileOnTheMove)

Butterfly invested into WhileOnTheMove because their product offers good fit to market requirements that are changing and clear cost saving value proposition. The product is launched; gaining traction; and already agreed sales provide significant and relatively long term revenue. Furthermore, the WhileOnTheMove team has shown significant personal commitment and demonstrated their ability to deliver. Butterfly investment will be used to speed up the sales, especially internationally.

Startup selection, agility, performance and trust

There has been plenty of discussion about the startup performance. One stream of such discussion relates to the selection of good startups and methods used for such selection. In my opinion there is a need for a combination of several different tools, including the heuristic analysis of the startup and its market potential, action driven cash flow models as well as portfolio risk analysis models.

Heuristic analysis should be useful because the traditional economic forecasting models cannot accurately predict the performance of a single startup due to many unknown factors in play. Action driven cash flow models help to understand the business model and market dynamics, and to identify the key metrics, customer conversion funnel as well as pin point the conversion problem areas once invested early on. From the portfolio point of view it is important to maximize the exposure to non-capped upside, i.e. positive black swans (Taleb, 2010), but limit the downside risk, both in terms of single failure, as well as interdependent systemic failure point of view. This should be great area for mathematical portfolio risk analysis models, such as the value at risk or shortfall (Goldberg, Menchero, Hayes, Mitra, 2010).

I believe that from the perspective of startup performance, however, what happens after the investment is much more important than before the investment, especially in the early stages of the startup life-cycle. In my opinion, the ‘trust’ between the venture financier and start up founders is vital. I made my thesis on the topic a few years back and formulated the ‘trust’ model in it (Risku, 2010). The model suggests that the ‘trust’ could explain the effectiveness of the relationship between venture financiers and start up founders and that the ‘trust’ could be the essential catalyst for startup performance. Behind this thinking is the premise that the ‘trust’ promotes agility. Interestingly, the recent ‘lean startup’ ideology proposed for example by Steve Blank (2007) and Eric Ries (2011) and ‘trust’ both point towards the ‘agility’.



Taleb N (2010) “The Black Swan, The Impact of the Highly Improbable”

Goldberg L, Menchero J, Hayes M, Mitra I (2010) “Extreme Risk Analysis”

Risku J (2010) “Trust Ecosystem: The Foundation of Startup Performance”

Blank S (2007) “The Four Steps to the Epiphany: Successful Strategies for Products that Win”

Ries E (2011) “The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses”

Butterfly Ventures Announces the First Investments

Butterfly Ventures announces the first investments of Northern Startup Fund into three innovative startups: FilmMe Group, NWG Tools and MyPose. The companies are all based in Oulu, Finland. With Butterfly Ventures investing in them, the companies will speed up their market-entry and accelerate their business growth.

The first investment rounds vary between approximately 100 000 and 200 000 euro, from which the Butterfly Ventures share varies from 40 000 to nearly 100 000 euro. In addition, parties have agreed on the milestone tied follow-on funding that may increase the total investment of Butterfly Ventures up to 500 000 euro per company.

We were contemplating between traditional angel investment and Butterfly at first. In the end, it was evident that Butterfly due to their experience and business knowledge would be an excellent partner – also for longer run”, said Sami Jussinniemi, CEO of NWG Tools “The benefits were clear, because Butterfly helped to develop an excellent way to protect our business and intellectual property rights already before the investment.”, he added.

The announced portfolio companies have been selected out of nearly 200 startups that were evaluated in the past six months. What these companies have in common is a sizeable market potential, appealing value proposition and business model, as well as, an excellent team. In the majority of target companies, there is also a real opportunity to protect the market position either using IPRs or the business model.

We are acting according to lean-ideology. In practice this means, for instance, that we also aim to test a certain concrete and relevant aspect of the business with the investment, such as, how the product will be spread virally.”, told Matti Kanninen, CEO of Butterfly Ventures “It is great that startups seem to highly value the help and support we can give them already during the evaluation process prior to the investment.”, he added.

In addition to the announced investments, Butterfly Ventures has several other cases under work to become investments in the near future. The majority of these companies are either in a seed or pre-seed stage. Butterfly Ventures will make first time investments in approximately ten new target companies per year.

Enquiries and additional information

Matti Kanninen, managing partner
Phone: +358 (40) 5455877
Email: matti@butterfly.vc

Butterfly Ventures

Butterfly Ventures is an early stage focused startup development and venture fund management company located in Oulu, Finland. Behind the company are Matti Kanninen, Antti Kosunen and Juho Risku as well as Board members Jukka Mäkinen and Jari Pasanen. Butterfly Ventures has offices in Oulu and Helsinki.

Web: http://butterfly.vc

Northern Startup Fund

Northern Startup Fund is a venture capital fund managed by Butterfly Ventures that invest into early stage startups. It is the first asymmetric fund in Finland. In the case of Northern Startup Fund the asymmetry means that the public investor, which benefits also in a form of tax income, lowers the risk of a private investor by offering a possibility for returning the invested capital and profit share before the public investor. From the private investors’ point of view this improves the risk – return expectation ratio significantly. The investment capital of Northern Startup Fund will be 10 million €, half of which comes from the City of Oulu and the other half from private investors.

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