Our suspicions have been confirmed that Rovio's $42 million (€30 million) investment back in 2011 actually went to Rovio's owners, and not directly into the company. Rovio’s CEO Mikael Hed tells Elina Lappalainen at Talouselämä the reasoning behind the move was the same as Supercell's recent funding round, where $130 million went to its owners in a round closed February.
Hed is quoted as saying,
”Typically startups are sold very early and that is the end of it. We had many hard years behind us and at one point Rovio was close to bankruptcy. When we were in a situation where the company was growing rapidly but there was no guarantee about the future, there was a temptation to sell - and there were many who were interested to buy.”
”It was important to release the pressure by selling part of the company with a good valuation. Because of this investment we could continue the long term development of the company. Otherwise we would have sold Rovio for sure.”
As mentioned in our article at the time, it's not wrong for founders to cash out, but it's strange when there's secrecy around it, or when the press releases are overly vague to what purpose the cash will be used. I think we should be shooting for more IPOs, but until then there's no great way for founders to make cash liquid.