06 September 2022

You can always raise capital for a startup: if your project is too small for venture caps, you can find an angel investor or use crowdfunding platforms. Eric Kadyrov, investment banker and entrepreneur from Silicon Valley discussed investment opportunities and vehicles available for investors and entrepreneurs in MIM.Economic Front. Here are the highlights of his presentation. For more information visit the episode.

- We should differentiate technology and non-technology startups, such as agriculture or construction. Non-technology startups can go to banks, private equity funds, or Eurobonds if the business is big enough. If we are talking about technology startups with special know-how or software, venture capital is the right choice.

- Startup starts with ideas or the seed stage. There are many funding opportunities there e.g. angels who are usually private investors rather than funds. They invest actively but the amounts are usually modest ranging between 50 to 100 thousand dollars. The beginners may join one of the numerous accelerators for seed companies. American Y Combinator is arguable the best-known, but there are numerous regional, European, etc. accelerators. Venture caps are not interested in seeds because they prefer to deal with companies with working teams, clients, growth perspectives, etc. 

- New vehicles, such as shares tokenization or selling shares directly to investors, or ICO or STO agreements evolved recently. There are crowdfunding platforms around. In any case, discussions with funds are very useful for the companies because funds are very experienced and rich in expertise.

- If you are looking for funding from the funds, start contacting tens of them. Start with the regular letter, but it may take months to receive the answer. If somebody can refer you or introduce you to decision-makers, it is much better.

- Venture cap has been doing well lately. There are investment hubs in Europe, in London and Zurich in particular. You can find funds with a large portfolio in Eastern Europe or Asia, in such places as Singapore or Hong Kong.

- Ukrainian IT industry scene is dynamic. It has many interesting teams and success stories. Ukraine is not yet rich in unicorns, but I hope that after the war Ukraine will turn into the largest IT hub in Eastern Europe.

- The war impacts the investment climate. Investors and funds are interested in the potential economic restoration. However, before the war ends, large projects are unlikely to start. Startups are more convenient because they could be relocated together with people. Security is being reformed in Ukraine and the world. Companies that left the Russian market are likely to support Ukrainian business initiatives. 

- We are living through unseen changes. In my opinion, it is like the Cambrian explosion half a million years ago. We see thousands of small fintech companies that change economic sectors. Take for example Credit Suisse with its 35 bn. dollar capitalization and Revolut bank, with a smaller team and higher value than the classical bank. The situation in other sectors is very similar. I am trying to identify the next “google”.