APEX VNT Limited venture capital fund, an IT project investment company, has set up an office in post-Soviet territory. Dmitry Cherniy, an APEX VNT Limited consultant and head of the local office, told us about the activities of the regional representation, the details of the bidding and selection process and about Ukrainian venture capital funds.
– A venture capital fund, new for the Ukrainian startup market, has stepped into the post-Soviet market with your participation. What sort of possibilities are now open for entrepreneurs?
– That’s right, a new fund is emerging in the territory of the Commonwealth of Independent States (CIS). It is called
APEX VNT Limited and its activities are aimed at supporting entrepreneurs in the growing high-tech industry. The arrival of any venture capital fund, including the one at hand, to the post-Soviet space increases the chances of domestic IT entrepreneurs successfully starting a business, implementing ideas and plans and, as a result, earning a profit.
– How can an entrepreneur apply for investments from the fund you represent?
– To be considered for investments you must fill out the application form on our website. Everything is clearly laid out for you: there are a minimum number of fields that you have to fill out in order to provide information about the entrepreneur and his/her project.
If more detailed information on a project is available it can be added as an attachment.
– Who considers the applications and on what basis are they financed?
– The applications will be considered by our team from the fund’s local representation. The projects that spark the team’s interest will be presented to the investors of the Fund’s head office.
Our team’s goal is to collect, analyze and compile a list of application that are clearly able to attract funds. We consider all proposed projects and provide backing for the ones that are passed on to the head office.
We are seeking innovative ideas that our team will like and that will be of interest to investors.
I should say right now that our support does not give a 100% guarantee of obtaining financing from investors. The investors who make up the Fund’s portfolio may pull out of investing at the last moment for various reasons.
Our team’s backing directs investor attention to the application, however it does not guarantee funding for the project.
– What key mistakes do national startup companies make when attempting to finance their projects with venture capital funds?
– The main mistake made by entrepreneurs is negligence. The applications are often completed with multiple grammatical errors and sloppy format.
Another common mistake is the project content’s lack of clarity. At times we get 15-20 pages of project description, but the meaning is not clear. We need concise, clear information thorough out the project description. Make it clear what goals have been set, what issues are being solved, what innovations the project holds, what monetization options there are. And all of this needs to be laid out briefly and comprehensibly.
Quite often we come across applications whose authors are exceedingly confident. They’re building castles in the sky in an attempt to fund their fantasies. The project has to be plausible. It has to be at an early implementation stage and a concept version of the future product must have already been created. We can’t take the risk of investing in unsubstantiated ideas. An exception can be made for ideas that catch the investors’ eye – an idea that could blow up the Internet.
Just imagine the number of similar applications that these funds see when investing in IT projects. Our fund is already receiving many and due to geographic expansion to post-Soviet territories, soon there will be even more, so your application has to stand out.
– In your opinion, are there enough opportunities in the CIS for emergent entrepreneurs to fund their projects?
– Sure, there are more than enough opportunities for those seeking funds. For example, the number of venture capital funds as such is growing exponentially, increasing the chances of every entrepreneur.
But we have to be prepared for hard daily work. When searching for funding you will have to go through all the possible sources: angel investors, venture capital funds, and also submit bank applications for lending.
Let’s not forget about the existence of startup support programs from Facebook, Google, VKontakte and similar companies that are continuously looking for opportunities to apply their ideas and projects to strengthen their presence in a specific segment of the IT-market.
I believe that entrepreneurs should, first of all, turn to the classic startup scheme. In the initial stages it’d be great to have well-prepared brand advocacy, plus support from relatives and friends. Here we are actually talking about rather minor investments.
Later on, when the product shows its worth, you should figure out your investment strategy: do you really need it and can you manage on your own? It could well be that after the prototype is developed and the first product results are visible that investors themselves will start looking for the creator.
From my own experience I can say that you should pursue all options simultaneously: work out a deal with relatives, send applications to angel investors and venture capital funds and visit banks. Soon after you’ll get feedback, which will help you understand in which direction you should take your business idea.
– What suggestions can you give startup companies from post-Soviet territory? What knowledge, skills and qualities do they need to have in order to get venture funding from you?
– – In essence, you do not need anything special: all you need is a clear vision and the ability to successfully convey your thoughts. It’s a plus to have experience or education in business, because it will help us speak the same language, but it will in no way improve the situation. Additionally, the presence or absence of an MBA will not affect the final result.
In your opinion, what is the status of venture capital funds in Ukraine: are there enough of them (too many/not enough), are they performing their functions or, as some suggest, simply a laundering or tax evasion tool?
I think that at the moment there are enough venture capital funds, accelerators and other structures that are contributing to the development of the startup industry in Ukraine. Of course, it is not the United States, where there are many more similar structures, but it’s more than sufficient for our small country with a developing IT infrastructure.
I can’t say anything bad about their quality of work. I keep track of publications and analyze them and meet with fund representatives and I can see what they are up to. They have a very healthy vision for the way the IT business should develop; their implemented projects are set in the right direction, and their plans are charged with potential and positive energy.
– Just how successful is your business? What gives you the moral right to assess or be capable of assessing other business projects?
I believe that I have something to brag about. My indicators are simple: my company is constantly increasing our workforce, which has sufficient work with a guaranteed income. If I didn’t run a successful business then I wouldn’t have had a company, and therefore, I doubt that I would’ve been a consultant for a venture capital fund.
I think that further we will have more development, business scaling, and so on. Soon our company is expected to enter the international market with several serious global scale projects.
