Nicolas Fogelholm is an active investor who has made investments through all the popular investment platforms in Finland. We met with Fogelhom and discussed his thoughts on investing.
Fogelholm is one of the founders and board members of digital agency Tulos. When asking about the exact title, he thinks for a moment. "I have so many roles in different businesses that just being an 'entrepreneur' is probably the best word to describe me now."
Fogelholm recently invested in Karhia, a manufacturer of coat strippers for wire-haired dogs. It's unnecessary to look for a wire-haired dog - or any dog - from Fogelholm’s home, as he’s allergic to our quadruped friends. Then why this investment? Fogelholm says he was convinced of the brand’s mission - he sees it as a “brand with a purpose”.
“There are a lot of products on the market that are not really needed. The first razor once solved the problem: it made it easier to shave. All the subsequent razors solved the same problem. Competition is tough when no one has a clear competitive advantage”, Fogelholm describes.
“When you compare this to the situation with Karhia and its markets, you can say that grooming the dog’s coat is important and the plucking has been previously done by hand. And now there is a unique solution to a simple and clear problem.”
Fogelholm says that the pet industry has been showing signs of growth for a long time. He has noticed the market develops into a direction where people spend on their pets as they spend on their children.
"In general people spend more on pet care, there are even psychologists for dogs", he cites as an example.
Understand the industry before investing in it
Fogelholm's roots as an investor date back to the days when he worked for Arvopaperi magazine (the leading finance magazine in Finland) when they were setting up their online service, Arvopaperi Online. He got interested in investing and decided to give it a try himself.
For unlisted companies, Fogelholm says he strives to follow Warren Buffett's old wisdom: never invest in anything you don't understand.
“I used to buy Nokia Brewery's emperor beer for sauna. I found it to be a good product, and it turned out that the brewery's share issue was going on and I invested, ”says Fogelholm. “Now I have stocks in several growing small breweries. I’ve followed the microbrewery industry and noted the growth in relation to the big beer brands."
"Another industry in which I’ve invested is eCommerce. I have over a decade of experience working as an e-commerce retailer, so I understand the industry and know what it is all about. ”
Different investors look at different things when looking for an investment target. Fogelholm pays most attention to the purpose of the company.
“Whether it's a product or service, I ask myself if I understand it and believe in its core idea. I’ve been involved in many businesses: the experience helps me to quickly assess the business idea of the company. Of course, I can’t be sure if the company will succeed, but I can somehow evaluate the probabilities of the company’s concept to fly or not.”
You must also learn from failures
What advice would Fogelholm give to a fellow investor? His key thoughts on the subject are clear: don't invest all your money in unlisted companies, research companies and their competitors before investing, and think about whether a new product in the market is really necessary.
If it is a consumer product, a good way to approach your investment decision is to consider whether you would buy the product yourself. Fogelholm gives a personal example of this.
“One soft drink company had a funding round open. I bought some products from this company, a few competing products and did a blind test with my family: the product that was seeking funding, lost the blind test. I decided this wasn't my thing and stopped thinking of investing. I don't know if I made the right decision, but at least I listened to my common sense.”
“An investor must also be prepared to fail. When the investment goes wrong, think about why this happened and try not to repeat the same mistakes. You either learn from failures or stop investing because of those.”
The information contained herein is not meant to be, and it shall not be interpreted as investment advice or a recommendation and investors must neither accept any offer for, nor acquire, any securities unless they do so on the basis of the information contained in the applicable investment material of a target company. Investing in securities of unlisted companies is associated with high risk.