EP49 · Economy · first published 2020-11-29
EXIT 2 and Finnish entrepreneurship | Matias Mäenpää | Negotiator 49
Matias Mäenpää, co-author of the EXIT book series, explains why the core message is that an exit is a consequence rather than a cause — and how Finnish media covered company sales as lottery wins until a second angle was introduced. The episode covers the finding across 31 cases that partial private equity acquisitions satisfied founders less often than industrial buyers did, the psychological contract as the real determinant of a deal's success, unfair advantage as an investment philosophy, and why none of the 31 retired. Plus Mäenpää's move to Luxembourg and why remote negotiation smokes out the incompetent.
EXIT 2 and Finnish entrepreneurship | Matias Mäenpää | Negotiator 49
Summary: The episode’s core claim fits in one sentence: an exit is a consequence, not a cause. Find a need, solve it, look after your employees and owners — the exit is evidence that you built something of value.
Its sharpest single finding comes from a dataset of 31 cases: partial private equity acquisitions left the founder satisfied less often than sales to industrial buyers did — even though an industrial sale usually means losing independence entirely.
And its best generalisation is not about M&A at all but about the psychological contract: a hire or a deal fails not because of the written agreement but because both sides oversold themselves.
A note on reading this. Miettinen discloses his interest in the episode: Translink Corporate Finance advised on Mäenpää’s own exit, and the EXIT book has been Translink’s most popular corporate gift. That is worth knowing when judging the tone. The episode was recorded on Black Friday in November 2020, and the pandemic runs through both the subject matter and the closing plug.
The starting point: how exits used to be covered
Before the first EXIT book, on Mäenpää’s account, Finnish media treated company sales as an entrepreneur’s lottery win — overnight they became lottery winners and millionaires. The series set out to add a second angle, and he thinks it worked: exit stories in the Finnish press are no longer only lottery-win headlines.
The comparison drawn is the Taivas + Helvetti (“Heaven + Hell”) series. Miettinen’s assessment is that EXIT gets to the point faster — the final battle, what happens in the negotiating room — whereas Taivas + Helvetti developed the entrepreneur’s story more slowly. Mäenpää does not take offence but explains his own relationship to it: he was a hungry, insecure young man of just over twenty when the first Taivas + Helvetti reached him around 2010, and it mattered a great deal to him.
Four cases
Mäenpää says plainly that he does not like picking individual stories out of sixteen — and picks anyway.
Sami Inkinen. A story not much told in Finland, and one Inkinen had not opened up this deeply before: Trulia was built from nothing and ended in a billion-scale sale. Miettinen notes that Inkinen has since directed his money and energy into Virta Health, which aims to reverse type 2 diabetes.
Kaslink. Not an easy business: competing against Valio and other giants. The father founded it, three brothers involved. Mäenpää’s angle is the family firm for better and worse — a strong idea that both carries and binds.
Kukkuu. A children’s clothing company, and here Mäenpää makes the episode’s most honest admission. As an angel investor he catches his own assumption: when young people come and say they are going to make children’s clothes, the assumption fairly quickly follows that the odds of success are very small. They built a successful and profitable business.
The Kovanen taxi case (from EXIT 1) is remembered as a wrestling match over succession — what the family does and how the baton passes.
And with it a lesson that belongs to the author rather than the investor: Mäenpää found that the stories that did not resonate with him resonated with someone else. Which is why singling any out is, in his view, almost dangerous.
What the data showed: PE deals versus industrial buyers
This is the episode’s most precise passage, because it rests on 31 cases rather than an impression. Mäenpää went through them for a keynote, and what emerged was this:
Where there were problems, cases that did not go so well, it was quite often these private equity partly acquired cases. The success rate — the founder being happy about handing over the firm — was not as high as when an industrial investor came in.
Miettinen immediately names why this is surprising: in an industrial sale you lose your independence, whereas with a private equity investor you in principle do not. And yet satisfaction runs the other way.
He offers hypotheses — too high a valuation, the leverage in an LBO structure, fights over strategic direction, internationalisation stalling — but Mäenpää’s answer is of a different kind entirely, and it is the episode’s best generalisation.
The psychological contract
Mäenpää moves the explanation from the paperwork to the people, and grounds it in hundreds of hires:
A hire is always employer and employee, and it is either win-win or lose-lose — there is no win-lose or lose-win, at least not over the long run. And it has never once been down to the written contract; it is more a psychological contract.
The employee creates a certain expectation of themselves during recruitment, and so does the employer. When the expectations do not meet, disappointment follows.
Then the move to M&A that makes it usable: both sides oversell themselves easily. The buyer walks through all the wonderful things you are joining; the company for sale oversells itself almost by necessity. Mäenpää admits he did the same — of course you sell at full tilt — and draws the line: you should be humble, but you cannot go grovelling.
The concrete consequence is the episode’s funniest and most serious moment at once: they had presented substantial growth for the following year, and once the deal closed, that turned out to be the budget. Miettinen’s verdict: sometimes you have to deliver the hockey stick.
After the exit: nobody rested on their laurels
Of the thirty-one cases, not one retired or moved to Marbella to sunbathe — except the Kivirantas, who moved there and founded a brokerage.
The pattern, on Mäenpää’s account, is clear: when one story ends, another begins. IPO cases are the exception, since there it has been possible to take a step forward while remaining on the share register with a significant holding and continuing to grow the firm. In other cases there is a transition period and then new leadership.
He explains why that is also good for the company, using himself as the example: he was a good CEO for PPG from almost nothing to a sale just under EUR 15 million, but does not believe he is the best person for the next phase. That is a different kind of character.
Unfair advantage — why exited founders invest in growth companies
Miettinen makes an observation that is almost a reproach: people who have sold their companies always have a substantial growth-company portfolio and leveraged property, but not what he himself does — a zero-fee index fund. This seems to be some kind of affliction.
Mäenpää’s answer comes in two parts. First the mundane one: the absence of a day job, and the fact that an ambitious person cannot bear merely watching an index portfolio rise and fall.
Then the episode’s second proper concept, which he says he picked up on a dog walk in Luxembourg from a friend: unfair advantage.
You ought to be able to invest in the places where you feel you have an unfair advantage.
The examples are homely and therefore convincing. If you are from Turku and know the city’s micro-economy, you should be buying studio flats there rather than in Oulu, where you have been three times. And that is why Väisänen, Omar and Mäenpää invest in growth companies: they understand them — or at least believe they do — and their expertise may get them better terms. In listed equities Mäenpää does not feel he has an edge, so there he uses professionals.
Risk profile completes the explanation: if you have built and exited a company, you probably tolerate high risk — which resonates with startup investing.
Luxembourg
Mäenpää joined PPG at 22 and left after the Visma period at 31 or 32. The dream of living abroad dated from his early twenties: perspective, worldview and networks acquired faster than in Turku, where you bump into a British startup angel investor more or less by accident.
Silicon Valley was interesting, but with a daughter’s arrival Europe began to feel like a more homely place to take a family. The choice was made by looking at Google Maps for business centres that were as multicultural as possible and well located.
Life in Luxembourg: 600,000 residents and 200,000 people crossing the border to work each day — the borders cannot be closed, since much of the hospital staff comes from outside, so the virus circulated hard. From home it is 12 minutes to France, 20 to Belgium and 25 to Germany, which means a Central European sales team can be built in one unit.
And then the thing money cannot buy: he arranged a tryout contract with a local ice hockey club, and twenty friends appeared at once in a country where he knew practically nobody. In Finland a late-night slot draws three spectators; Tornado Luxembourg draws 300–600, and away games in the French league fill the rink with drums and singing.
Two physical products are named among his investments: table bed, a six-person dining table that converts into a bed — which he compares to Framery, laughed at initially (phone booths for fifteen thousand, how is that a business) and on which Väisänen made at least 50x on the first round — and the Finnish Drop, for which an importer has been set up in the Benelux.
Board seat or not
Miettinen asks about board roles. Väisänen was exceptionally both the largest investor and chair at Framery and would not do that again; Ali Omar does not join boards but runs his own sessions.
Mäenpää is active in the background but treats the title as secondary:
Whether we are talking about board membership or an advisor role does not matter much; what matters is that the founders build a good group around them.
What is decisive is that it runs both ways: someone to answer to, and someone who pushes and challenges the goal-setting. And tempo — Mäenpää says he always tries to analyse how fast a firm’s tempo is. His position is clear: better ten decisions a month than three considered ones, because the wrong ones get fixed quickly.
Miettinen’s addition: communication has to be direct and trustworthy, no playing games. And this produces the episode’s most honest moment — Mäenpää had said earlier that Tero Nummenpää once sent him back to the provinces to grow, and Miettinen raises it precisely as an example of the times when you have to be blunt. A year later the growth targets had been met, the SaaS business was scaling, and the process began. Mäenpää’s verdict on it: the hardest months of my life.
The pandemic made remote negotiation normal — and smokes out the incompetent
The episode’s most topical passage is still topical. The EXIT 2 interviews were done in April 2020, at the height of the first wave: Anssi Kiviranta sat in Marbella, Mäenpää in Luxembourg and the interviewee at home. Each was interviewed for about four hours.
Mäenpää was nervous about whether the trust and atmosphere would form remotely — you need them to get more out of a person than what they arrived intending to say. It worked, and his conclusion is blunt: if a third volume were made, we would not drive to Oulu to do that four-hour interview.
The same goes for M&A. Miettinen relates that Translink had run a sale process with Jari Lauriala to a Nasdaq-listed buyer over Teams even before the pandemic, because a small firm’s resources do not run to ten thousand euros of travel — and that this was consequently the firm’s best year in its recent history.
And then the episode’s most provocative observation:
You see it at boss level: the boss can’t hide any more. Before, in the meeting room there was a senior middle manager cracking bad jokes while a junior did the work. On Teams you more or less have to do a lot of the talking — and that means you have to understand what you are talking about far more than before. This smokes the incompetent out of the business.
The only downside they can find: the dog no longer gets any time alone, because somebody is always home.
Where entrepreneurship goes over the next twenty years
The episode ends on a broader question. Mäenpää notes that as recently as the 1980s entrepreneurship was regarded very negatively, and that on any human timescale this is the immediate past. Twenty years ago Finland did not even have the term angel investor. The data series are short: there is a century of observations on listed equities, but the VC funds operating in Finland only arrived in the early 2000s — and only about five per cent of them reach their targets.
His assessment of the present is nonetheless optimistic: big firms move slowly, there is more technological opportunity than ever, and there has never been a better time for the entrepreneurially minded to start a growth company, with valuations high and the activity seen as socially important.
The closing argument is an exhortation aimed at everyone listening. Miettinen starts with himself: he is an investment banker, you could hardly find a more lowly and downvoted fellow — and yet nearly every episode has been received well, because nobody had talked about these things before. Mäenpää carries it home:
If it feels like you don’t dare talk about these things, or about yourself, or about your industry in public, that is a mistake. Because then the people who know nothing about it will define you with their own agendas.
Miettinen’s summary: knowledge does not add sorrow — it may even add sympathy.
What the episode leaves you with
- An exit is a consequence, not a cause. It is the book series’ thesis and the episode’s headline at once, and it is checkable: if somebody wants to buy your business, it has mattered in its industry.
- The psychological contract explains more than the contract text. The observation comes from recruitment but transfers to M&A seamlessly — and explains why PE deals disappoint more often than their structure would suggest.
- Unfair advantage is a question every investor can put to themselves. Where do I actually have an edge — and what do I do about everything else?
Related episodes
- The exit handbook and capital income | Kim Väisänen | Negotiator 48 — the same week’s EXIT theme from the other side.
- The EU’s opposition | Sari Essayah | Negotiator 50 — the next episode.
- The Basic Account and The Victory of Freedom | Elina Valtonen | Negotiator 53 — the incentives for entrepreneurship and the structure of social security.
- Learning and EdTech as an investment | Marko Kyyrönen | Negotiator 47 — another angle on growth investing.