It always seems that startuppers have to overcome numerous obstacles before finding the investors. But we never think of all the procedures taken by investors themselves to choose the right project for their money, which also turns out to be a complicated task. Yevgeny Sysoyev, a partner of one of the leading venture funds in Ukraine ‘AVentures Capital’ shared some of the venture experience and explained how capitalists usually work with startups.
In the beginning, it is essential to learn how startup founders can be noticed by a venture firm after applying for funding. From the long list of applications only around 3% lead to the investors’ project observation and much fewer finishes with real financial deals. What is more, not all the appeals even deserve to appear on that long list, which is often defined by the quality of the application. Those “cold” applications through the venture firm’s website almost never succeed to be noticed since most of them are poorly presented or just look like spam. However, there are some exceptions made by high-level IT-firms who send their applications in a very prepared and demonstrative way. The same happens with serious venture funds, contacting their competitors to offer some kind of cooperation. Finally, it is very likely to get in touch with venture capitalists during some conferences or be very lucky to be picked up by the venture funds working with a specific field and looking for a new project by themselves.
As soon as a venture firm has processed the incoming applications and saved them in their system, specialists should classify all the applications according to a project stage, the field or specific industry, location and so on. For any venture fund, this part of work plays a key role in the whole business. It is because after such a classification they see on which projects to concentrate. Usually, such projects are already relatively developed and just need additional funding. It means that there will be a big competition with other capitalists who want to invest in an obviously promising deal.
Of course, there must be some instruments managing all the arriving information and processing the applications. Most of the venture companies use various CRM systems or even cloud solutions though some of them can work with a simple Microsoft Office package. Yevgeny Sysoyev claims that it does not really matter which automation software you use, the most important is to build a well-designed business process basing on the company’s tasks and final goals. For now AVentures Capital operate on Highrise contact management system, store some information in Dropbox and regularly use Google Sheets. With the growing number of contacts and deals, such a combination of simple instruments stops working, so AVentures Capital now think of choosing a CRM system to facilitate their debugged business process.
Speaking about the competition among venture funds, Yevgeny Sysoyev assures that there is no tough fight for projects these days, at least in Ukraine. All the venture companies target specific segments of the IT field, which embrace companies and firms on different levels of development, starting from those that still need seed funding. That is why all venture capitalists have a certain workspace according to their professional interests. In general, everybody cares about the healthy ecosystem in Ukraine, with a lot of successful projects. So it is good to have even more well-functioning venture funds to cooperate with the promising startups in Ukraine.
You may sign up our monthly newsletter to receive updates or news from our team.