Ramine Darabiha asked a very good question in his comment to the post Being a VC in the Nordics:

Could you please comment as to why you think Sweden and Norway are leading both in terms of investments and exits, in comparison with Finland for example?

The background to the question is one of the takeaways from the exit study, namely that Sweden and Norway have produced the vast majority of exit value among the Nordic countries.

This is a tough question to answer, but I’ll try to give some possible explanations:

First of all, the data is by no means perfect and probably slightly skewed to Sweden’s benefit since I think we have more and better data from Sweden than from the other countries. Also, some sectors are excluded from the study, e.g. life science where Denmark is pretty strong and energy where Norway is very strong. But still, there’s enough data to see some sort of a bigger picture.

As for Norway, there are a few things that stand out. Firstly, Norway has had a much better IPO-market than the other Nordic countries, also after 2001. Solar company REC was one of the biggest IPO’s ever and there have also been a number of other smaller ones e.g. Trolltech, Funcom, Mamut, NextGenTel, Opera, Powel, Telio. Norway also has some very strong technology clusters in e.g. materials (REC) and internet technology & search (e.g. Fast, Opera); areas that have accumulated lots of value during the last years.

As for Sweden, it is first of all a bigger market. More people, more entrepreneurs, more investments and also more exits. Sweden has a longer track record of international & export companies in general. This has resulted in ex-industrialists and consumer folks turning into entrepreneurs or business angels, managers that have been internationally trained before turning entrepreneurs, and a mindset which is pretty focused on making it outside the Nordics.

Compared to Finland specifically, I also feel that Sweden is a few years ahead in terms of startup experience in various technology trends. The Swedish internet boom in the late nineties generated more than a few failures but also provided a breeding ground for web entrepreneurs leading to some accumulated experience. There were for example several community initiatives that people could learn from in terms of user-contribution, viral user-uptake and how to monetize social media. The same was true for the software industry in the nineties, many of the larger software companies were founded almost a decade earlier.

In Finland, I meet a lot of young web entrepreneurs but the experienced entrepreneurs are mostly from enterprise software or industry. I think it will be very interesting to follow the development in Finland when the experience from Sulake, Jaiku and others start spreading.

I am also very positive to actions that unite entrepreneurs from across the Nordic and Baltic countries, I think there is so much value to be added from joining forces and experiences. Arctic Startup is doing a great job promoting events around the whole area and startups such as Bambuser have founders from several countries in the region.

Finally, I think this is a very interesting topic for further discussion and I would love to hear your opinions on it.