The journey into VC #2 with Katja Pihlainen
From music tours in the US to empowering founders in Finland.
Background
Name: Katja Pihlainen
Nationality: Finnish
University: University of Helsinki
Degree: BSc & MSc of Law Class of 2023
Position & venture firm: CEO, Wave Ventures
Katja sat down with me for a brief chat about her life experiences, aspirations, and drive that ultimately led her into the world of venture capital. In 2011, Katja decided to pursue a career in the music industry. Under the artist name KATÉA, she would gather >1 million plays on Spotify, go on tour in the US, and later become an advocate for the democratization of the ins and outs of the music industry.
In 2019, Katja stepped into the door at Wave Ventures as an investment manager. With her unique background and corresponding experiences, Katja would take the ultimate step and became CEO of Wave Ventures. She will now be running the largest student-led investment fund in the Nordics until spring 2021 as the Wave Ventures teams shift every two years. You might wonder, how did Katja then start in 2019 if they only transition in new investment teams every two years? We will get back to that later.
Reasons Behind This Series
The purpose of this series is to hear from individuals who have decided to pursue a career in venture capital. We will listen to their stories, and shed light on the venture industry. It is especially relevant for you if:
- You want to break into the industry.
Why? because we try to uncover what venture capital firms look for in candidates. - You are a founder.
Why? because we try to uncover what venture capital firms look for in startups. - Interested in entrepreneurship & innovation.
Why? because the quickfire at the end is great.
The journey into VC is often serendipitous, which lays the foundation for great stories. Welcome to story number 2.
Note: This interview has been edited and condensed for clarity.
The Journey
The Brief
With her father being an entrepreneur, Katja grew up closely connected to entrepreneurship and innovation. With her upbringing and Katja’s natural curiosity, she indulged in plenty of different activities. However, among these activities, be it sports, reading, cooking, there was always one dominant hobby. Up until she was 9 years old, it was writing. To give you an understanding of the significance of the word dominant in this particular setting, we will take it summer of 2002. This summer, Katja wrote a 300-page story. She was nine years old.
Funnily enough, she ended up throwing the 300-page story into the garbage bin as she did not end up liking it once she finished.
From nine onwards, music was and is one of the interests this young Finnish girl has closest to her heart. The first year of high school, Katja had the opportunity to go abroad for an exchange and ended up in Montana, US. Here, she was heavily exposed to classical music, whereas in Finland, she had mainly delved into the jazz world. Katja would return to the US eight years later, this time for a music tour with artists from all around the world.
Last year, she stepped into the world of venture capital and pre-seed investing at Wave. At the moment, she is in full swing running the largest student-led VC fund in the Nordics.
The Details
After her time on exchange in Montana, Katja decided to move away from her parents to attend a particular high school in Turku, Finland that specialized in different performing arts such as stage arts, drama, and radio.
I started to play at one local studio on the side during my time in high school. The founder of the studio and I actually started to collaborate on projects, and we played gigs all around Southern Finland. This was when I first started writing and recording my own tracks. Working there was great fun and I became lifelong friends with the owner of the studio. It was just a brilliant time in my life.
After two years in Turku, Katja decided to take a big leap of faith and drop out of high school to pursue a music career in Rotterdam, the Netherlands. Here, she stumbled upon Dutch rap and the wild architecture of what some call the gateway to Europe. Due to her economic circumstances, she had to take a part-time job on the side like most other up and coming artists.
I am very grateful to my parents. Every time when I had a crazy idea that I wanted to explore, they supported me and allowed me to grow as a person. To make my own mistakes and create my own successes. Even though not all of the adventures ended up in the ways I had originally planned, these adventures gave the greatest learnings and the best stories.
In fact, 6 months after she left Finland for the Dutch canals, she had returned back to her home country. But in those 6 months in Holland, Katja had gained valuable life experiences.
I had seen a completely different scene in Holland. There was a studio where I got exposed to beats and completely different kinds of sounds than what I was familiar with. Holland had another vibe which I learned, and I took some inspiration from that when I went back home.
When she returned to Finland, she started to work full-time on her music career.
I started playing at a lot of shows and went back to the Finnish studio I previously mentioned. I continued working closely with the Studio owner and guitarist Timo Haanpää there. For a few years I lived like that, we wrote songs and played shows in nearby cities. What a magical time it was.
Afterwards, Katja moved to Helsinki, where she met her manager Sami Peura.
I got introduced to the larger industry space and to a lot of people in the States, UK, Sweden and Germany. And through that, I got signed to Bertelsmann Music Group (BMG) in Stockholm and started to write songs with different producers around Europe and the States. Essentially, that’s where I became a professional music artist. I want to clarify that this was not a smooth sailing journey. I had to go through many hoops, take a lot of risks, and try to live day by day. But, it was a tremendous experience.
Katja continues:
Through my manager and the shows that I played in Finland I got introduced to Sat Bisla, an influential figure in the music industry in the West part of the states and in Los Angeles. He had previously worked with major artists like Adele and therefore had outstanding connections. He was very excited about my music. Sat runs a radio show called Passport Approved and he started to put my songs on the radio program, which aired in the States and around the world. After a year of having my songs on the program, I went to the US to play different gigs. We did a series of shows in Los Angeles at MUSEXPO, which is an annual event for professionals in the music industry. So, when one year later Sat asked me to join the tour, I was more than ready to hop onto the tour bus. For the Passport Approved Tour, Sat had brought together four different artists from all over the world. My band, one artist from Australia, a band from Indonesia, and a local artist from the US. We started the tour on a bus in San Diego and continued until we reached Seattle. It lasted a couple of weeks, and we did shows in various locations on the way between San Diego and Seattle. When we finished the tour I flew to New York with my Finnish band, played a few more shows and returned to Helsinki with memories that will stay with us forever.
At the time, Katja started to think about her academic career. She had still not finished high school and was determined to complete her degree the same year she was still touring. The high school system in Finland — like many other countries — consists of a final examination period where the knowledge you have acquired during the full three years is tested in a short period of time.
Katja laughs and continues:
I had taken some years of high school and because of that had to catch up on all the content from those 3 years in a very short time period. I was actually doing my homework when we travelled on the tour bus because of the final examination period. I remember fondly that I was doing chemistry in a corner of the bus, whereas the others were drinking tequila.
Even though the circumstances were less than ideal, Katja graduated with flying colours and went on to pursue a degree in law. She is now studying in the capital of Finland, Helsinki. Here, at the University of Helsinki, is where Katja got introduced to Wave Ventures.
These unique experiences Katja had amassed caught the eye of Aleksis Tapper, one of the original founders of Wave.
He was in the founding team of Wave Ventures. We went out for lunch and had a chat about life and my background. He was quite interested in the fact that I had such a strong art background and ended up in law school. There’s not too much in common between those two elements. He told me about Wave, their purpose and vision. I thought it was extremely interesting, particularly because I learned that the team at Wave did everything. From sourcing deals, creating the investment theses, doing the legal work, negotiations, due diligence, and making the final investment. Everything was run by the student team. Also, at Wave, the team is usually quite diverse. People come from different study backgrounds and different work backgrounds. That fascinated me. In the end, I think that the entrepreneur soul inside me pushed me to pursue it.
The steep learning curve and the intrigue of the field appealed to Katja. Aleksis had piqued Katja’s interest. Now, the challenge was to get a place in the team.
I talked with the Wave team for a few months and got a position as an investment manager. The team was actually complete at the time, so I was an extra addition. Wave-teams usually only change their members every 2-years. So I was an extra member that they added to the team later after a 3-month long period of getting to know me. Basically, they took a little risk with me and my strange background there.
Well Katja, I think Wave is quite happy about how this investment turned out!
Dealing with stress
Like most industries and jobs, a career in VC, music, or law is stressful at times. Many of us have a particular stress-relieving activity we indulge in, be that binge-watching Netflix, going to the gym, or meditation. In recent times, Katja has found a particular interest in painting to take her mind away from all the stresses that are present as a student and VC.
I have to involve myself in all things creative to stay sane and stress free — I am particularly drawn to visuals. I enjoy the things where I can see my own creation and progression. I have been painting on and off for many years. Since I started to work in VC, the frequency of it has exploded. Whenever I have free time, I paint. When I’m painting, I don’t really think about anything else. It is just a great way of expressing and having fun whilst doing so.
For some time, I thought that I had to do some crazy extreme sports because that is apparently what VCs do. For instance, everyone seems to be climbing mountains. I am a bit clumsy by nature, so I figured I should probably leave the mountains to others and find another way to relieve my mind. Maybe painting is a more natural (and safe) way for me to do that.
As Socrates ones said:
To find yourself, think for yourself.
Main lessons as a VC
- Nobody has all the answers
In this industry, there are so many different opinions. There are as many varying opinions as there are people. So if you get one answer from a person in the industry, another one might disagree and give you a totally different answer. At the end of the day, you have to build up your confidence and try to find your own voice and vision. Trust your feelings and decision making. Trusting your gut and knowing that nobody knows it all is really important.
2. Don’t be afraid to ask questions
In the beginning I was always asking myself “Should I know this? Should I not know this? Can I ask this question?” But from what I have learned: be brave, be stupid. It is the best and fastest way of learning. You might be afraid of looking really dumb, but usually I have found that people like you more if you are human to them. Nobody is perfect.
3. Be interested in people
For me, this might be the most important. Always be interested in people and their stories. There are so many learnings others can share with you. Ask what they’re interested in, what their background is, what kind of startups they like to look at, if they would want to exchange deal flow, etc. Usually, people really like those kinds of contacts and connections. They like to help you.
Advice for aspiring VCs
To students:
Try different things. Go out of your comfort zone. Try to find what you’re really interested in, the things that you’re passionate about. Don’t settle with the obvious choices but explore everything the world has to offer. Without trying something, you will not fully know if that’s for you or not. Let’s take an example, if you’re going to business school, don’t narrow things down too much by picking one subject and draw the conclusion that this is what you’re going to pursue for the rest of your life. I think VC is a difficult field if you do not enjoy it. You have to be interested in it. Also, as a VC, you have to look at many different industries, so you will never be wrong to learn about a wide variety of topics. Exploring different fields complements the profession of being a VC.
To professionals:
Find your edge. Find the thing that defines and differentiates you as a professional from other applicants and highlight it. VC funds from all over the world are aiming to become more diverse. So people with different backgrounds, industries, and skills are hot stuff in the market now. And that’s good news: you don’t have to fit yourself in a very narrow basket any more. Find out what you’re good at, package it, and present that to the VC firms that you’re applying to. That’s what I would do.
Advice to Entrepreneurs
The pitch deck
The ideal length of a pitch deck is very much contingent on the context. One thing I always tell founders is that you need to be able to do your pitch in a very short time. In an ideal world, every founder would be able to tell what their company is doing in a couple sentences. Then you can take it longer from there. For me, the ideal pitch length is a few minutes in which you cover the most important aspects of your business. Ernest Hemingway used to write while standing so that he would have all the essentials included and not write nonsense. As VCs see a tremendous amount of companies in the deal flow stage it’s essential to be able to package your company in a way that’s interesting, but short. So, I would say it’s important to practice a short, concise version of your pitch, but also a more extensive version. So having a couple of different pitches for different walks of life is definitely beneficial.
Know your audience
Think about who you are pitching to. In the beginning of this year, I was arranging an event for deep tech companies in Finland and looked at many deep tech cases because of it. This is especially important to remember when you’re working with companies that have very complex solutions. Keep things simple if you’re talking to investors without a very technical or science heavy background. It’s fundamentally important to make sure that the investors understand your company and vision. You might miss some good opportunities of receiving investments just because your audience simply doesn’t understand you.
Common mistakes
- Team & Culture
Because of the stage in which we invest (pre-seed), team composition and team building is the most important aspect of the business. In a sense, you’re married to your team. So don’t pick the team members randomly. In general, the team is composed of a group of individuals who have worked together previously or someone you’ve known for a while. Generally speaking, spend time on team building, communicating and creating a company culture. The fundamental culture of a company is oftentimes the creation of the founders and early-stage employees. And lastly, don’t sit on things. Instead, actively share and communicate problems and successes with your team. I think that saves you from a lot of trouble later on.
2. Cap Table
When you’re starting out, make sure that the cap table is clean. That’s a common error which is very unfortunate. There are companies that have a great team, but their cap table is all messed up. If you give up equity too easily in the beginning, it’s harder for a VC to then invest in the company at a later stage. It is unfortunate and extremely sad for us to tell this to the entrepreneurs. There are things that can be fixed, but the cap table is difficult to clean up once it’s messed up.
Quickfire
What are you currently reading?
Currently, I am reading “Women Who Run With the Wolves”. The author writes about numerous stories (folklore) that have been gathered through an extensive-time period. She gathers them and analyses the portrayal of women in these stories. The stories are from all around the world and she is seeing how culture has altered the stories and how the original versions changed through time.
Which public figure(s) must I be listening to?
I would say, John Oliver. I think his late-night shows are a quick and easy way of getting a brief overview of a wide variety of subjects. It is a great way of getting to hear about something you never knew about, e.g. the postal service in the States. I love the randomness in that. John Oliver has given me so much information, and what’s even better, many laughs, so I have to give him a shoutout.
Which startup must I be following?
If I could, I would highlight all of the startups in our portfolio. But, I will keep it to two startups. The first one is Volta Greentech — they make supplements to mix to animal feed from seaweed. Essentially their product is fed to cows, and the cows’s methane emissions go down. It is a young team, and I can’t wait to see where they go from here. The second one is Starmony, our investment from last summer. It is a music-tech company that is changing the way music is created. Their solution allows more people to break into the industry. The solution is tearing down some of the conventional barriers and removing some middlemen from the equation. I think in the near future, they’re going to be doing brilliant things.
What is the single question that you ask yourself before making any major decisions?
I will gear it towards the VC investment decision. So, our LPs are extremely important to us as they have bought into the vision and mission of Wave Ventures. They have committed their capital and time to help us improve the entrepreneurial ecosystem in Nordics. As such, every time we have an investment opportunity on our team’s table, I ask myself: would I be comfortable investing my own money in it? Would I be able to sleep well knowing that I invested my money in this venture?
Thank you for taking the time to share your story, Katja.
I wish you all the best for your future endeavours!
Onnea! Success!
Want to learn more about Katja & Wave? Check out this article authored by Katja on Wave Ventures’ medium page.
Last Words
Everyone has a story. Do you want to share yours?
If so, feel free to contact me on LinkedIn!
