insights
August 24, 2022

Investor Spotlight – Taavi Pertman

In the Investor Spotlight today is Taavi Pertman – an investor, author and financial educator at RahaFoorum.ee

 

Why do you invest in early-stage companies as an asset class? What is your motivation?

My main goal with these investments has been education, and I would like to learn more about investing in this asset class and the startup world in general. The best way to get interested in it and learn a lot faster is by putting some money in, while obviously starting with relatively small amounts.

Are you more a trader or more an investor type? Why?

Considering the illiquidity of a given asset class, it doesn’t make much sense to be a trader. For fun and testing some ideas, I have traded a bit on Funderbeam secondary market, but my main positions are there for the long haul.

What are the three criteria by which you choose your investments?

Since I’m still learning, I don’t have any rock-solid criteria that would definitely lead to a great result. Some things I look for:

    • Idea has to be something that I like and makes sense to me. Not even the specific product, but the goal and the reasoning behind it. Businesses looking to make a quick buck on some passing trend aren’t that interesting.

    • Founders definitely play a role. If I know them, it’s easier to decide; otherwise, I rely on their track record and third-party sources. There’s not a definitive list of what to look for or avoid, but there are some things that make me want to avoid investing in even otherwise good companies.

    • It has to be a company, not only an idea. Meaning that it has to have at least some paying customers. This makes it easier to evaluate whether the idea makes sense, the market actually exists, and hints that the founders can execute, not simply dream big.

Do you consider investing in companies with solo founders or only in companies with several founders?

I have not used this as specific criteria when making decisions. Although multiple founders usually seem like a better option, it doesn’t really matter.

What are your priorities and why: team, product/ idea, total market availability, timing?

If the product/idea is something that I don’t understand or makes no sense to me, I usually won’t even look at the rest. While making the investment decision, the team becomes more important. Total market availability is important to the point that the product could be scaled enough to potentially offer a great return on investment. Whether it’s $1 billion or $100 billion has no real significance for me at this point.

Does the company need to have a unique product to draw your attention?

Not necessarily the product/ idea, but the reasoning or the “why?” behind it and the approach to trying to solve that. The products or even markets can and often do change.

Starting from which stage do you invest? Idea, MVP, pre-revenue etc

Company has to have some revenue, at least. I definitely don’t have enough knowledge or skill to pick good investments pre-revenue.

Is it essential to motivate all employees by options in the company?

There’s probably some research on the topic, but I’ve only seen some on motivation and compensation that’s not related to options specifically. Based on that, I’d lean towards it not being essential. I could be wrong, though, and it could also be essential due to another aspect besides motivation.

How many investments do you currently have? Can you name some of them?

Currently, there are seven long-term positions in the private equity space: Ampler Bikes, Barking, Bikeep, Funderbeam, Cleveron, Atom Mobility, Jeff App.

What multiplier do you expect for your investment portfolio?

Considering the risk level of most of these investments, at the time of investment, I expect them to go to 0. Hopefully, I’ll learn enough to get a return that, in the long term, will exceed stock market returns enough to justify the added risk. Based on some more experienced investors’ estimates, chasing higher multipliers also tends to increase risk. This means that higher diversification and more experience is needed to not end up with worse results. In that sense, I’m not at the higher end of this spectrum.

What are your suggestions to investors who are thinking of starting early-stage investing? What to do, not to do?

Take your time, be prepared to lose all of your investments there, study the terms and contracts and start small. Small in this case is relative since the sums needed are pretty large compared to most alternatives. Not to do is a long list, but perhaps don’t start this investing with the expectation of getting rich.

What source of information do you recommend following for others interested in early-stage investing?

Tried and tested the usual ones. Find local investors active in the space and network at different startup events. You’ll find people who know the ropes and will get access to deal-flow.

Read Next
The information about the investment opportunities profiled on this website is provided for general information and marketing purposes only and should not be considered an invitation or inducement to engage in any investment activity. Complete and comprehensive information about an investment opportunity is only available only to investors who have been approved by a Funderbeam group entity.

You should ensure you carefully read the Risk Disclosure Statement before deciding to proceed with any investment or transaction, including making a purchase of securities via the Marketplace. Funderbeam has taken steps to ensure that company and securities offering information is clear, fair and not misleading in accordance with its internal verification procedures. Funderbeam does not provide investment advice or any recommendation to invest. Any investment opportunity on this website should not be considered as an offer to the public and is not directed at or offered to anyone to whom it may not be so directed or offered, or located in a jurisdiction where it is unlawful to do so.

This page provides you with an overview of the services provided by different entities belonging to Funderbeam Group. In this page, we generally refer to the group as “Funderbeam”, “we”, “us” or “our”.

It is important to note that funds are raised, investments are made and trade orders are placed through three investment firm service provider entities: Funderbeam Markets AS (FBAS) (authorised and regulated by the Estonian Financial Supervision Authority under permit 4.1-1/212), Funderbeam Markets Limited (FML (authorised and regulated by the UK Financial Conduct Authority under FRN 794918), and Funderbeam Markets Pte. Ltd., (FB Pte) (licensed and regulated by the Monetary Authority of Singapore under Capital Markets Services (CMS) license CMS100863). FBAS and FML are MIFID investment firms.

A Funderbeam client (whether investor or company) is a client of the service provider and under the protection of the requirements of the regulator under which that service provider operates: An EEA client’s service provider is FBAS, a UK/ non-EEA/ non-Singapore client’s service provider is FML, and a Singapore client’s service provider is FB Pte.

The Marketplace is operated as an organised market by Funderbeam Markets Pte. Ltd., in Singapore as a Recognised Market Operator (RMO) under the supervision of the Monetary Authority of Singapore. FBAS and FML are Trading Members of the RMO’s Marketplace. Access to the Marketplace for EEA and non-EEA clients is only provided by and through such clients’ service provider (ie FBAS or FML). The Marketplace does not provide services directly to investors outside Singapore.

With respect to any securities or investments offered by a US domiciled Fundraising Company, by visiting this site you confirm you are not a US resident or US person (as defined in Regulation S of the U.S. Securities Act of 1933) and you understand and agree that you are not acquiring any Investments for the account or benefit of any such US resident or US person. No investment opportunity in a US domiciled Fundraising Company is directed at US persons.