Fireside chat with Vesa Jormakka

Vesa Jormakka has been a Private Equity investor for twenty five years. An engineer turned M&A and investment professional, he is an international technology hunter and a management team builder. He is living nowadays in the Munich/Bavaria region with his wife and three children, enjoying cooking, good wines and books.

We are privileged in Kaato community to have members from a broad spectrum of backgrounds and professionals with different expertise areas from business, technical to management and even policy level. Thank you, Vesa, for talking to us and giving us a peek into the PE environment!

Nicole: What is your passion in work and business?

Vesa: Mine is to find interesting businesses and to help build them further. I enjoy interacting with management teams to solve problems and plan for future growth. I like to see how individual decisions (good and bad) pan out and impact future development. I like the feeling of the difference that technology investing can make.

Nicole: Which are the areas where you could help others in the Kaato group?

Vesa: These are the areas where I can help: 1) Assessment of business potential in the German/DACH market. 2) Help others understand the “German way” of doing business and creating relationships. 3) Assist with contacts to the German PE investor and M&A advisor network.

Nicole: What type of companies does your firm invest in?

Vesa: Verso is a mid-market buy-out/growth investor with a special focus on carve-outs. We focus on B2B technology businesses with potential for international scalability, currently based in Nordics or DACH region.

Nicole: In your long investment career, which decision have you made that you were not initially sure about but turned out to be an extremely profitable move?

Vesa: You won′t believe this: I was one of the early investors looking at Wirecard back in 2000. The management didn′t feel quite right and there was something opaque about the business plan, although it was in an interesting and hot area. We declined to invest. The rest is history.

Looking for ability to work under pressure, deal making & people skills (people); hunger for growth & scalability (companies)

Nicole: What are the top qualities that private equity firms look for in a candidate?

Vesa: Assuming that we are talking about professionals: experience in assessing business potential. Lots of common sense. Negotiation and people handling skills. Ability to work under pressure. Deal making experience. And some financial background.

Assuming we are talking about investment targets: scalability of the business model. Hunger for growth by the management team. Defendable entry barriers and USPs. Existing products and customer traction.

Nicole: What are three common profitability obstacles for businesses when they are scaling towards growth? (For instance, a company with 10 to 50M€ annual turnover)

Vesa: Lack of focus and lack of a scalable sales strategy. Non-existent supply chain management. Sloppy cash flow management.

People do not buy from you because you have the best product.

Nicole: What do you think is an area of improvement for Finland to grow its economic presence in Europe and internationally?

Vesa: Successful globalization of Finnish companies takes time AND money. If you don′t invest properly in international sales, nothing will happen. This means enough resources in sales, marketing and overall presence. People do not buy from you because you have the best product. You cannot enter (for instance) the German market without proper investment, including preparation and planning.

Emphasize the people: (Finns are) clever, educated, open-minded, social, fair, easy to deal with.

Nicole: If there is one thing that you can do to change how Finland is promoted, what would it be?

Vesa: The images of technology, nature, lakes and sauna are fine, but I would put more emphasis on the Finnish people. We are clever, polite, educated, open-minded, social, democratic, fair, easy to deal with if you are ready to invest into the relationship with a Finn. Finns are business partners and friends for life.

Nicole: What is your pet project or something that you enjoy doing?

Vesa: I like lot of things privately and most of my pet projects are completed. However, one constant factor has stayed: I love reading, on a good holiday week I can easily read three (thick) books. I would also one day like to try to write a book, we′ll see.