PwC podcast: Inka Mero, what kind of owner are you as a private equity investor?

My guest on the podcast this time was Inka Mero, a female entrepreneur and venture capitalist with expertise in digital and technology businesses from startups to large companies. In the episode we discussed a venture capitalist’s motivation to own and when an outside financier should be involved in the growing process, and about the role of women entrepreneurs in the venture capital industry in general.

The VC market now and in the near future

The megatrends behind the growth of the investment business field are accompanied by the exponential development of technology and the fact that it is often growth-seeking companies that develop world-breaking technologies. At the same time, growth is dependent on the general situation in the financial market. Privately owned growth companies managed by highly professional investors are an option for fund investors. The Nordic countries have always been strong in the field of technology. When thinking about growth trends within the technology field, a tremendous wave of digitalisation has been seen, with the emergence of platform economies and small businesses.

At the moment, however, we are more on the verge of a fundamental technological revolution.

It is important especially for the younger generation of entrepreneurs to be involved in a growth company that solves some of the big problems, such as the adequacy of resources or the inequality in digitalisation. Technology and the entrepreneurial trend are enabling the venture capital industry to flourish.

The right time to involve a financier

According to Mero, companies can be divided into two different fields, but what is essential in acquiring investors in both is that the diversity of the company’s team should be broad, especially on the knowledge base. Mero says investors are less likely to invest right away, but they want to spar with the team and give them “homework”. This will test the team and their collaboration skills. Consideration of the ownership structure is also essential, in motivating team members and for the company to be able to withstand funding rounds.

After the investment, more sparring will take place and one theme that will be particularly focused on is brand building in order to be able to build significant commercial agreements with big global partners. It is often considered who could be the investor in the next round of financing already at this stage. The team’s ambition must also be strong enough, so that the company is not satisfied with small profits. Accelerating and maximizing value growth is a big part of a venture capitalist’s job.

Conflict between profit maximization and the importance of the company

Mero says as an investor, Voima Ventures aims to solve global problems, but at the same time still invest in business areas where there is still seen to be business in ten years’ time. In order to attract the best professionals entrepreneurs’ aim for sustainable business is extremely important but as important is to consider influence matters as they are part of the corporate culture.

However, meaningful entrepreneurship is in no conflict with it being a business.

Is there enough diversity in the private capital sector?

Of all industries, the private equity industry is the least inclusive after the mining industry. Only 2% of the sector’s $ 200 trillion is managed by funds established by women.

Because there are so few women in equity or influential positions in private equity funds, money is not accumulated in growth companies founded by women.

Unconscious bias can be found in the whole venture capital industry. There is a willingness and interest in having female members on the boards, but the networks are lacking. By encouraging young girls to go to work in a growth company, they could see what growth is and learn. Starting a business or running a growth business is not rocket science.

Listen to the full podcast episode (in Finnish) easily below or here.