This article raises several concerns:
First: It’s worrying that Finansavisen, Norway’s financial newspaper, doesn’t seem to understand venture investing.
Venture investing is not “normal”, meaning that it doesn’t follow a normal distribution. Instead, it follows a power law distribution, where most returns come from very few deals.
Additionally, venture investing has three key traits:
- Long-term focus – Success takes years, even decades, to materialize.
- Illiquidity – Funds are mostly locked up for a decade or more, limiting access.
- High risk, high return – Some investments could make +100x, but most will yield 0x.
This traits aren't good or bad; it’s simply how the asset class works.
Take Spotify, for example. A celebrated Nordic success that today is worth more than Equinor. It took 22 years from founding to IPO.
Building winners takes a lot of time and money. Globally, the average journey to unicorn status—a valuation of €1 billion—takes around 11 years and €132 million in funding. In Norway, it could take even more.
Investinor is less than 16 years old. Will need some more years before is able to impress us all.
Second: It’s also concerning that Finansavisen may not fully understand the role of a state investor.
Investinor is not meant to be an instrument for Norwegians to maximise financial returns. There are other instruments for that, like the Oil fund.
Investinor’s role is developmental: to support the growth of future Norwegian companies by taking on risks that private investors often avoid—scientific, technological, and market risks.
And if Investinor has not been able to hit is 10% IRR target it is maybe because they have been taking a lot of extra risks supporting the development of the Norwegian startup and venture ecosystem (and acting as a market driver throughout the global pandemia). Or simply because the Norwegian market is not able to provide these type of returns yet. Probably a combination of both.
State investor's role is to concede short term financial returns for long term financial returns. As well as to pursue other returns that financial.
Third: It is wrong of the government to leave the question of pension funds' role in venture investing to just a handful of civil servants and asset manager employees.
It is important to remember that Pension Funds are in essence the savings of the working class. In the same way as the State Investors are the tax payers money.
It is of course important to answer quickly the question on how will we finance the creation, development and growth of the next generation of companies in Norway.
But it is more important that this debates transcend the investor forums and minister forums and that is properly presented and debated among the civil forums. After all, it’s both the people’s money and the future jobs in Norway that are at stake.
What we really need is a Venture Investing Masterclass at the Stortinget!
There’s nothing more socialist than that.
