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Yritystehdas Jan 11, 2023 1:24:20 PM

The risk-free Product Development Funding provides security for starting entrepreneurs

Have you dreamed about setting up a business alongside our studies, but raising the funds or getting someone to guarantee a personal loan seems like too much of a hurdle? Four students in Jyväskylä found themselves faced with this question when setting up a joint company named Hoofin. They compared a variety of funding solutions and found the Startup Factory’s risk-free Product Development Funding, which was perfect for the situation. You can apply for the funding for developing a product or service before establishing a business. The funding can be applied for by the students, researchers and staff members of the University of Jyväskylä and Jyväskylä University of Applied Sciences. Learn more about applying for the Product Development Funding!

From horse pastures to a shared business idea and securing funding

An interest in horses is a common denominator between the founders of Hoofin. They also share experiences of purchasing used horse tack, which have been often less than pleasant. The idea for Hoofin, which concentrates on selling used horse tack, began to take form in Nina Nurmesviita’s mind in the autumn of 2021. She has her own stable and international-level competition horses – she also takes part in competitions herself. Nurmesviita conveyed the idea to her friend Erika Mäki, who competed in show jumping in her younger years. Erika got excited straight away and wanted in on the business. Other additions to the team were Jutta Järvinen, who shares a love of horses with Numesviita and Mäki, and Joona Takkula, whose family is involved in harness racing.

“Used horse tack can occasionally be found through horse groups on Facebook, for example. They do not provide the opportunity to filter or sort the product searches in any way, however. Finding the product you need in good condition and the right size often comes down to sheer luck,” Nurmesviita describes.

Initially, the idea was to purchase used horse tack, make some repairs and resell the items. Despite their intentions, the young entrepreneurs quickly found that the storage and restoration cut into their margins far too much and made the operations unprofitable. After some contemplation, they landed on the final idea of a horse tack market platform that would provide secure payment functionalities, clear categories and sorting options, and features to ensure effortless product searches, purchases and sales. At the turn of the year, the foursome commissioned a market survey, the results of which provided a clear answer: there was a definite demand for a service like this among horse enthusiasts.

Once the idea had crystallised, it was time to build the market platform. Yet, building and maintaining the platform required financial resources and the entrepreneurs were on a student budget. Many questions were weighing on their minds regarding potential sources of funding and the risks of various forms of financing. Would a personally guaranteed loan be required and how much existing equity would be required?

“We explored a lot of different options online. We learned about loans guaranteed by Finnvera and bank loans that would require a personal guarantee. We also examined the solutions provided by Business Finland. In addition to this, we visited the Finnish Enterprise Agency for advice, but the experts recommended a personally guaranteed bank loan which would also require equity. At that point, we only had a business idea and student budget, which posed some challenges,” Nurmesviita and Järvinen describe.

"Sometime later, we were exploring the Startup Factory website on other business and found the Product Development Funding. At first, we couldn’t believe that we could apply for risk-free funding to kick off our operations smoothly,” Nurmesviita says happily.

 

The Startup Factory’s Product Development Funding ensures a speedy start for the business activities

In spring 2022, the Hoofin team submitted an application for Product Development Funding. Very shortly thereafter the team received an invitation to a jury interview and began diligent preparations.

“We received a list of questions for the jury, which we used to build a presentation to match the company’s image. We strived to respond to every question comprehensively and also strived to highlight the results of the market survey that we had commissioned earlier.”

“The meeting with the jury was a pleasant experience and not at all as nerve-wracking as you would imagine. Afterwards, we got a lot of praise for our market survey and presentation. I suppose we didn’t quite understand how well we had prepared and underestimated ourselves, judging by how smoothly everything went,” Järvinen says, pleased with the results.

Upon being notified of receiving the Product Development Funding, the team went from a canter to a full gallop. The entrepreneurs put a lot of effort into building the market platform and released it for test users in summer 2022. In August, Hoofin was launched publicly and in moments the platform had more than 100 listings. The Product Development Funding fulfilled a real need and significantly lowered the threshold of the team getting the business operations started.

“We use the Product Development Funding to cover costs related to the development and testing of the market platform, which enables us to take time to focus on developing our operations and marketing,” Nurmesviita and Järvinen say, visibly satisfied with the arrangement.

 

Funding and a boost for maintaining speed and overcoming obstacles

Instead of the Startup Factory simply shelling out the cash and giving the team a pat on the back for good luck, it also provided Hoofin with concrete sparring services and support for growth.

“In addition to funding, we gained designated contact persons from the Startup Factory, Mika Fisk and Riku Ojanperä (JAMK). We have met with Mika for several times now, and he has provided excellent trips for our business.

Riku has supported the team in practical matters, since the procurements with the Product Development Funding are always conducted in accordance with the payment practices of the home university.

“The pace has been pretty hectic, and ideas have been flying every which way. Mika took note of this and suggested that we should work on our priorities to ensure more systematic progress,” Järvinen says with a laugh.

Now that the market platform has been launched, one of the team’s priorities is to spread information about the new marketplace. The entrepreneurs have already used some influencers and hope that awareness will snowball further. The aim is to gain as many active sales listings as possible and build an extensive range so that everyone from hobbyists to professionals can find the products they need.

In the future, the team wants Hoofin to become the leading company in the field and employ the entrepreneurs. Based on what the team is saying, the Finnish market will not be enough and the team will aim for the international markets and notable equestrian countries, such as Sweden and Germany.

Follow Hoofin’s journey on Instagram @hoofin.fi and remember to visit the market platform.
Read more about Product Development Funding!