VCEE Startups recently interviewed Max Gurvits, a famous entrepreneur and investor with an impressive experience gained in Europe and the US. Max used to manage an online legal services company in Amsterdam in 2008-2011, and later became a co-founder of one of the largest tech acceleration programs in the region – Eleven Startup Accelerator – and EUR 12m seed fund. Presently, Max Gurvits works as a Director for CEE and MENA in Cross-Border Angels. Thanks to a wide range of regional activities and programs Max participates in, he has a good vision of the current ecosystem state and has a bunch of tips to share. We asked Max several actual questions about startup life, current trends and his own projects.
How do you usually select startups? What are the main criteria for a promising project?
Depends on what the startups are selected for. From an investment point of view for my work at CBA, we look at early-stage product or service companies with scalability (usually means tech products), and validated demand. This usually involves chasing a large enough market, a committed founder team with relevant background, and a proof of concept by the first traction. For business applications, this could be anywhere from USD 5k in sales and up.
If you were a startup founder, where would you search for funds first? (accelerators, angel and private investors, crowdfunding etc.)
Very good question. Depends on whether I’m a first-time entrepreneur or not. If I were a first-timer (like I was myself with my first company back in 2008), I would probably look for an accelerator program. There are tons of them everywhere nowadays. The problem very often with non-Silicon Valley accelerators and venture funds is that they’re not integrated into the industry, meaning that their partners have no network and have not been involved in building successful tech companies (or investing in them). If I were applying to an accelerator, I would always check the experience of the program managers, and talk to 5-10 founders who went through the program before.
I have no experience with crowdfunding personally, but it seems that many good entrepreneurs raise crowdfunded rounds successfully. From what I understand, crowdfunding is like any other distribution channel; personal experience and network matter a lot there too. Experience shows that committed, serious founders (doing a second or third company) start with raising angel money from investors who have experience in their vertical or geographical market. This is exactly the kind of founders we are looking for with CBA.
What can you say about the ecosystem of Central and Eastern Europe? Which cities or hubs have attracted most of your attention? And where do you see the biggest startup potential?
I think that the big achievement of 2015 is that technology entrepreneurship has become totally commoditized in the CEE. When I first moved to the region from Amsterdam in 2011, it seemed like no one was doing startups. Now, every little regional town from Vilnius to Chisinau, and from Tirana to Tehran has startup events, accelerators, VC funds, etc. That’s great. I actually don’t think there are hubs yet because everyone is still more or less at the same level. Sometimes there are nice local success stories like Vinted in Vilnius, LogMeIn in Budapest, and Telerik in Sofia.
But we’re not (yet) seeing how that trickles down to the startup community locally. Maybe that will change in 2016. I think the biggest potential (and challenge) for CEE founders is to break away from the sleepy local realities of their non-market countries and play on a global level. Which means attracting product and biz-dev talent into their teams. That kind of talent doesn’t exist in CEE, for the simple reason that there are no (early-stage) tech markets locally. So I think the founders that will be winning are those that can get co-founders and other team members (and investors) that have actual market experience.
Could you please share your views on the current industrial trends in terms of startup development and investment activity? Like, what is trendy in 2016?
What’s trendy? Revenue is trendy! All signals seem to point that the era of startup/tech hype and speculative funding is over. We’ve seen this first with consumer software (and other asymmetrical business models); that has become pretty much a no-go area for non-Silicon Valley founders since 2012. Now this is expanding to business products, hardware, and everything else. Technology needs to make money. More traction, more revenue = survival chances.
Obviously, stuff like AI, robotics, drones, VR etc are the cool topics this year. But for European and MENA founders, there are substantial opportunities in “software eating the world”: there are still tons of verticals that haven’t been upended by technology properly, especially in these markets. That’s the kind of stuff I’m looking for in CEE/CIS/MENA.
What are you currently working on? What industries are the most interesting to you?
My work is divided into two fields: helping build startup communities and helping companies get funded and get out on the markets. I have learned over the years that these are two totally different tasks. For the former, I work a lot with governments, corporations, and interest groups, helping create functioning communities by advising on accelerators, VC funds, national innovation policy, tech parks, etc. This is all consulting work based on my prior experience in the US, Netherlands, and Bulgaria. The investment work is all centered around CBA: we help mature founders (earners, not learners) get funded and move from discovery and validation to sustainability and growth. We do this by getting them investors who understand markets and verticals and provide funding for the business development stages.
We look forward to meeting Max Gurvits at
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