1. Three tips for those looking to invest in unlisted companies:
- This depends a bit on the stage of the company, but the earlier the stage, the higher the risk. The vast majority of unlisted investments amount to nothing. Think carefully about whether unlisted assets are a risk you’re willing to take. In my profession, each investment is part of a larger portfolio of companies where we work with portfolio theory. It’s incredibly difficult to pick the right company early on.
- I invest at very early stages, where the founder and the market are by far the most important factors. My analysis is primarily based on whether the founder has what it takes to quickly build a global company within a specific market, which must be as large as possible. This analysis differs significantly from a more conventional company analysis.
Develop your own methodology, do your research, talk to people, and create your own perspective.
- Look at other investors. Learn who is skilled, and try to analyze previous owners and their motivations. Unfortunately, Sweden has extremely weak regulations, which sometimes make the market something of a Wild West. This particularly affects small private investors, who often lack the financial muscle to handle issues when they arise.
2. What is most important to investigate if you want to invest in an unlisted company?
Founders and the market are the only two important aspects in the beginning; over time, more information naturally becomes relevant. These two aspects can then be broken down into different parts.In a market analysis, there are several factors to consider, and the same applies to an analysis of the founders. For example, I often look for "founder/market fit," meaning the founder’s suitability to build a company in a specific industry. I also examine their underlying ambition—what drives the founder or team forward?
3. A myth that exists in venture capital or early-stage startups:
There are many myths, which unfortunately are perpetuated over time. Fundamentally, venture capital as a financing model is quite broad, and it’s necessary to define the stage being discussed. The differences are significant across stages, countries, and industries.Ultimately, venture capital is a very demanding form of financing—one of many—that is suitable for a small fraction of business models and an even smaller group of founders.We base our investments on the idea that the right person with the right business model aims more for growth than profit. As a result, we are willing to finance substantial losses during an aggressive growth phase, believing that a later shift from growth to profit can occur.There are no shortcuts—venture capital is definitely not a shortcut. Building companies is extremely high risk, poorly compensated for most, and an incredibly tough life. But for some, it provides an opportunity to build companies, often within software, at an incredibly fast pace and transform parts of people’s lives.
.png)
