Growth Company Success and Financing | Olli Sirkiä | Neuvottelija 188

Summary

Olli Sirkiä, founder of Trado Capital, came on to discuss how growth companies are chosen, financed and taken abroad.

The Rule of 40 gets its most useful criticism here. Sirkiä accepts it for internal steering — set growth to zero and the cost structure has to settle somewhere — but says it is too crude for an investor because it equalises all costs. A company spending sixty per cent of its budget on sales scores the same as one spending that money on product, though these are entirely different companies to own. He adds that a CAC to lifetime value ratio does not show the churn profile either, since firms onboard customers not yet ready to use the product. His summary of why sales efficiency deserves the closest attention is the best line in the episode: it contains not only how well the sales machine works but how good the product is, and the two are tightly bound.

Venture debt, described concretely. Companies this size have no collateral beyond receivables and equity, and personal guarantees no longer work. Trado does not take receivables as security; instead the loan is meant to be repaid, and failure converts it to equity on deliberately harsh pre-agreed terms — a structure designed so that nobody wants to use it. In a normal growth scenario the founder pays interest rather than ownership. Sirkiä draws the limit himself: a conversion handing over sixty per cent and leaving founders nothing would mean the loan was too big or the terms too brutal, and a crippled company serves nobody.

On Timma he explains why software combining a B2B product with a consumer marketplace has to win the B2B side first: adoption needs someone locally to show how it works, which is why online-only competitors have failed, and the marketplace only becomes valuable once market position is established.

On selling and internationalising, he credits the view that commission alone is a poor incentive and that paying for activity works better, since salespeople look too far ahead. He is unambiguous that the reseller model does not work in software — a reseller carrying your product and a competitor’s sells whichever interests it — and notes that Workday, Salesforce, Monday and Pipedrive all have partner networks now but none began that way; distribution is a consequence of having customers, not a way to acquire them.

His conclusion about Finland is that the constraint is not team quality. Ideas are too often built such that the domestic market is the whole market, and then a company can do everything right and still stop at a few million in revenue — fine for the founder, not for an investor. “When you look at the world through a small hole from here, plenty of companies run aground on it.”

He also describes why an investor should not join early-stage boards (they take more time than mature companies, you cannot sit on twenty, and the company gains nothing from international experience at that stage), and gives an unglamorous account of deal sourcing: wanting even a conversation might be one company in five hundred.

A note on the source

The transcription contains one gap of roughly thirty seconds at 17:33–18:02, in the middle of the Rule of 40 argument. The line before it ends “and they scale”, and speech resumes from the second half of a comparison whose opening is not preserved. This summary is written only from what the transcript contains; the gap has not been filled by inference.

Watch

The recording lives on the Neuvottelija channel: Kasvuyritysten menestys ja rahoitus | Olli Sirkiä | Neuvottelija 188. A Finnish edition of this episode is published at www.neuvottelija.fi.