The Global Investment Summit 2023 will welcome 50 leading investors this year, and will also host countless workshops, lectures and talks. And that's not all! It will also feature a unique competition for budding startup entrepreneurs, the Validation Contest, in collaboration with StartupBox. Are you interested in what exactly StartupBox aims to achieve and what the competition will look like?

StartupBox is a non-profit digital platform – online startup mentor, which is trying to solve the problem of the Czech startup ecosystem. The problem is that, particularly here, the same faces keep appearing in competitions and programmes. New startups are almost non-existent, and furthermore, startups keep making the same mistakes.

The project's goal is to help aspiring startup founders in the Czech Republic, especially first-time founders. The aim is to prevent them from making mistakes when hastily developing products. without basic validation and gathering feedback from customers. StartupBox mentors want to help them take the first step into entrepreneurship and connect them with the right people in the market.

The platform has over 3,100 registered users, with around 150 new ones joining each month. To help aspiring startup founders validate their ideas, StartupBox organises Validation Contest, which is an offline competition for early-stage startups. A similar counterpart is also Validation Challenge, when it comes to helping budding startup founders get from idea to validation, within their online learning programme they experienced mentors – By Pavel Bartoš a To Peter Mandić.

StartupBox especially wants Increase the number of high-quality startups in the Czech Republic, connect the entire ecosystem and thus move the Czech economy forward. At the same time, helping people improve personal responsibility through entrepreneurship. They would like to welcome more partners and supporters who wish to join them and together achieve the goal of creating new startups in the Czech ecosystem. Is that you?

Or do you want to take your project a step further? Then follow www.startupbox.cz, try a digital mentor who will help you set up your startup step-by-step, and most importantly, don't miss any of the startup events.

There isn't a day that goes by without us addressing the security issues of the world we live in. Mainstream media, as well as social networks, are full of events or phenomena that can directly or indirectly affect our, otherwise perhaps happy and carefree, lives. According to the Global Peace Index, the Czech Republic has long been among the ten safest countries in the world, and Prague is even the sixth safest capital city. However, the threat of the possible escalation of the conflict currently taking place near our borders is a more real risk for us than ever before.

The economic impact in this time, when each of our lives is threatened by both a pandemic and war catastrophe, will be felt by all of us sooner or later, and it is up to us how prepared we will be. So, more than ever, it is necessary to think about protecting property and money, which until recently were secured by the seemingly unshakeable stability of banks.

So how do you protect yourself?

A proven solution is to use a safety deposit box. Not only for storing investment gold, but also for keeping important documents and, last but not least, especially cash, which you may not be able to access at your bank due to the current global situation.

This service is offered by private non-bank companies. Automated safety deposit boxes are also available in Prague today, offering non-stop access without restrictions, along with the highest level of security. With complete discretion thanks to the use of a chip card and PIN, you can enjoy true peace of mind.

2BMiner provides its services to hundreds of clients worldwide. The goals are always to offer the most modern machines, the lowest price for electricity, stable mining, and hassle-free operation. The team includes dozens of cryptocurrency mining professionals who manage operations, including machine servicing worldwide.

As the only cryptocurrency mining company in Europe, they have become partners with the Seed Group. This company belongs to the Dubai royal family, which focuses on innovation and the latest technological advancements. The group has branches in over 12 countries worldwide, focusing on supporting strategic partnerships with innovative, growing companies that strive for prosperity with a broader vision to contribute to a happier and stronger global community.

The future of the Czech and global economy lies in the convergence of financial services and technology, which will facilitate its digitalisation and transformation. This is directly linked to the growing popularity of wealthtech and cryptocurrencies, as tools to protect our finances against rising inflation.

Around a third of European unicorns are FinTechs. The combination of financial services and technology is one of the few areas where Europe excels. And the Czech Republic is no exception. We are experts in the adoption of FinTech innovations, whether it's banking identity, mobile or digital payments. Until recently, Home Credit, with 110,000 employees, was one of the largest FinTechs in the world and trained an entire generation of top international managers.

Blockchain or crowdfunding? See the glossary of terms HERE

Czech fintech

Fintech will therefore play a significant role in the digitalisation and transformation of the Czech economy. According to Fintech Cowboys, there are currently around 100 fintech companies in the Czech Republic. A large number of them have global potential, particularly those providing infrastructure for large banks and insurance companies.

At the Czech Fintech Association, we provide essential mentoring, networking, and lobbying, supplemented by the structured support of Fintech Hub. While we have a stable banking system, there are significant reserves in dialogue, innovation, and the availability of best practices. In general, we should promote fintech as a sector of the future and attract talent.

WealthTech

Before rising inflation, you can protect your finances by, for example, investing. And thanks to Wealthtech, Therefore, technologies used for wealth management are no longer a luxury for the rich. The recent trend is so-called „robo-advisors,“ which can create tailored portfolios for clients. Moreover, this entire process is very fast and inexpensive thanks to automation.

Are you interested in podcasts about cryptocurrency, investing, or FinTech? Click HERE

In addition to the KYC (know your customer) digitisation process and investment process automation, some companies are also beginning to integrate advanced technologies such as artificial intelligence and machine learning into their portfolio creation.

Cryptocurrencies

Less traditional cryptocurrencies are also starting to gain traction as a way to protect savings. Many people now know that there is a finite amount of bitcoin and that this asset, like gold for example, could therefore be a good hedge against inflation.

You can find the Czech Fintech Association's projects HERE

Less well-known, however, are the trends currently shaping the cryptocurrency space. One example is the concept known as DeFi (decentralised finance), which allows for the operation of lending platforms, exchange offices and many other financial applications without the need for a central authority.

In periods of increased volatility, effective investment tools will represent one of the key factors for protecting asset value.

The Czech Republic is one of the richest countries in the world, with a high standard of living to boot. However, we are missing a global brand. Something that would make us the most important players in the industry. But we have the potential to become a leader in the field of fintech.

Just as the Swiss are known for watchmaking, the Germans for precision engineering, and the French for wine, the Czech Republic is still searching for its global brand. Yet we have something to build on. The glass industry, brewing, and automotive engineering are all at a world-class level. In the future, we must focus on sectors with high added value. We have all the prerequisites to become world leaders in cybersecurity, artificial intelligence, or financial technologies.

The Czech Republic as a financial services country

The Czech Republic has a strong base of financial professionals. This is evidenced by high stability, service levels, and profitability. And „start-ups“ play a large part in this. For example, Home Credit was founded from scratch and became a world leader in consumer finance. It also nurtured an entire generation of Czech managers who remain top in the field.

Czech fintech is a source of innovation

There are now over one hundred companies in the Czech Republic in fintech and insuretech. Colleagues and fintech ambassadors at Fintech Cowboys have been mapping them for a long time. A large number of them are brought together by the Czech Fintech Association. Czech fintech companies can benefit from the background of strong financial services, which are among the best and most innovative in the world. This is evidenced, for example, by the level of digital banking or the adoption of electronic payments.

Regulation will trigger changes

However, global competition is also growing, and we must therefore remove barriers to faster development. The long-term and worsening problem is not so much regulation per se, but the application of regulation in licensing and supervision. However, the National Recovery Plan envisages the creation of a (regulatory) sandbox, which would allow fintechs to get off the ground and get started.

Investment in foreign talent

However, a more significant problem remains the long-term vision of how to attract foreign talent to the Czech Republic. Prague and other Czech cities offer a great quality of life, and can therefore be compared to Western Europe or the USA. If we also offer people business opportunities, we have the potential to attract talent from all over the world. They will then attract more and more talent, but they will also serve as inspiration for Czechs in choosing their profession and focusing on fields with high added value, as well as for changing the education system.

We have top experts and the potential for development

We have the potential to export cutting-edge fintech and insuretech globally, for example, in the form of infrastructure services such as risk management solutions, digital customer service, claims processing, insurance claims handling, etc. Furthermore, these solutions often combine finance, cybersecurity, and machine learning, in which we have top experts in the Czech Republic. I would like to see a unicorn in Czech fintech within five years. Let's help fintechs so they can emerge.

Angel investing is undoubtedly one of the interesting ways to invest. However, it's not for everyone. To become an angel investor, you primarily need to have the right „mindset“. You must be prepared for the fact that venture capital is highly risky and that you could lose your investment. You take risks, but at the same time, you help with your money, time, experience, and contacts, thereby reducing the risk of the given startup failing. Simultaneously, you participate in the development of new technologies and the future. Does this sound like an exciting rollercoaster ride to you? Well, it is. Read the most important things you need to know about angel investing.

Angel investing / Angel investor

The term „Business Angel,“ known in the Czech context as an angel investor, was first used in 1978 by William Wetzel of the University of New Hampshire, founder of the Centre for Venture Research. Wetzel was conducting a study on how entrepreneurs raise capital and, based on the characteristics of their work, gave them this name. Angel investors truly are like angels. They help, potentially saving a company from (corporate) death.

An angel investor is a private individual who invests in the earliest stages of startups, particularly in the pre-seed and seed phases. In addition to money, angel investors provide their experience, knowledge from business and various industries, their time, and most importantly, their contacts. These individuals are often entrepreneurs, former startup founders, early retirees, or high-ranking managers. Who would refuse help from such experts?

Why are angel investors important

An angel investor is very important for startups because they provide more than just money. They are significant because they invest and help at the very beginning of a startup's journey, at a stage where the startup would never receive investment from any VC fund. For VCs, these phases are very risky as they lack the time they could dedicate to a startup, so they bet on more verified companies that are already showing some revenue. Conversely, an angel investor helps startups overcome the difficult early stages and significantly increases their chances of success, and therefore their return on investment, with their time, expertise, vast experience, and contacts.

How angel investors work and where to find them

There are not many active angel investors in Europe, however, awareness is constantly expanding and there are more inexperienced investors with smaller capital. Some have built a personal brand as angel investors (which is very demanding and often associated with attending many, many startup events, lecturing, participating in juries, or achieving a successful exit). These angel investors are not short of so-called deal flow (simply put – the number of investment opportunities an angel investor currently has available), as start-up founders approach them directly. However, if you are not that type of investor, there is fortunately a second option to break into the startup world and gain access to quality projects and other investors. These are various angel networks and investor clubs. They are often local, meaning

Czechs often overlook the Baltic states. Estonia, Lithuania, and Latvia are home to only around six million people altogether. It might seem that they have little to offer in a European context. However, at least in the area of tech start-ups, this is not at all the case, quite the opposite. As colleagues from DEPO Ventures and I have seen during our visits in recent months, the Baltic states are literally a mecca for modern start-up business. How have they achieved this? And what could we in the Czech Republic learn from them?

Although each of these countries is at a different level from the perspective of the startup world, they have some things in common. The startup scene there – unlike in the Czech Republic – is massively supported by the state, which realises the importance of innovation and its economic benefits. Estonia, in particular, with its complete digitisation of public administration and services, has prepared very fertile ground for the local and international startup scene. Thanks to this step, the country currently has the most billion-dollar startups in all of Europe.

The power of startup stories

We all know Skype, of course. This story captured the attention of the Estonian public. It appealed to investors, inspired other tech entrepreneurs, and as a result, new startups began to multiply rapidly. Skype employees and those from other companies launched their own ventures. And they began to support promising projects themselves as angel investors. They laid the foundations for the startup world, the result of which is today 13 unicorns, startups valued at over a billion dollars.

In Lithuania, Interactio could play a similar role, a software that facilitates remote simultaneous interpreting for conference organisers or intergovernmental and working meetings, for example. The pandemic massively boosted the business of this Lithuanian startup, which raised $30 million during its Series A investment round last year. Angel investors have multiplied their initial investment in Interactio tens of thousands of times over a few years, turning them into millionaires today. Everyone considers it a huge success, and interest in angel investing has grown sharply. 

The state sets the direction

Lithuania supports investment in startups in two ways. It co-invests with angel investors, enabling them to double their capital. The second way is by monitoring local startups and their impact on the economy, employment, and other important aspects, including contributions to the state treasury. The Startup Lithuania website (www.startuplithuania.com) features a register of all startups. Detailed information can be found for each, such as the investment it has received, its valuation, or how many people it employs. It is clear at first glance that startups represent a significant part of the economy and that they directly employ thousands of people in Lithuania. This sends a message to the public that it makes sense. I believe that if similar statistics on the economic contribution to the state were available in our country, it would dispel many myths and help the public improve their overall opinion of startups. 

Latvia is currently a bit behind the other two countries. It has the fewest funds, less capital, and fewer projects. The angel ecosystem doesn't really work, but in Riga, you can feel a strong tenacity to be the best and one day overtake Estonia and Lithuania. The trio of Baltic countries is far from homogeneous; they compete healthily. In Estonia, due to its small population, the startup scene is mainly aimed at international markets right from the beginning. Various startup competitions are regularly held, which contribute not only to natural competitiveness but also to the sharing of experiences and the discovery of new talent. This is shown, for example, in investment see involves a larger number of angel investors, and they often collaborate with venture capital funds. This is not yet as common in the Czech Republic.

The investment „mafia“ wins 

In the world of venture capital, it increasingly seems to pay off to be early with an investment in a company. In the Baltics, the best projects and most promising start-ups go to entrepreneurs who have successfully built and sold a company and are now investing in other projects. It works similarly to Silicon Valley. Such an investor is not afraid to support a company right from the start and is willing to take on greater risk than venture capital funds. These focus on more developed companies that are already generating revenue. This happens after a year or two of a start-up's existence. Unfortunately, it often happens that a successful start-up receives investment offers from elite global funds, thereby knocking local funds out of the game. This is an example of the aforementioned Lithuanian Interactia.

Although the situation is improving, there are still very few „ex-founders“ like this in the Czech Republic – and generally investors who would invest in the early stages of development (pre-seed, seed). However, in our Baltic neighbours, we see that successful stories, state support, active investors, and a collaborative approach have helped to get things moving and create one of the most recognised startup ecosystems in Europe. 

A quarter of angel investors want to increase their venture capital this year, shows a DEPO Ventures survey

20 April 2022, Prague – Angel investors are not losing their appetite for further investment. Roughly a quarter of them intend to significantly increase the amount of venture capital this year. Half want to invest a similar volume of funds into early-stage startups as last year. Furthermore, it appears that they are gradually increasing the frequency of their investments. While last year, one angel investor made an average of 2.3 startup investments, the previous year this figure was 1.7. On average, each investor has six investments, and the number of exits is also gradually increasing. Mostly successful ones, where the investors' money has paid off. This was revealed by a survey conducted by the Czech financial group DEPO Ventures, which is building a unique syndicate of angel investors worldwide. The aim of the survey, which took place at the beginning of 2022, is to explore the current state of the market and identify any shortcomings.

„Two years ago, most investors reacted to the pandemic and its associated uncertainty by halting further investments. However, in the period that followed, we saw a historically unprecedented volume of investment in startups in Europe. European investors seem to have grasped the importance of technological investments. And perhaps they understand it even more now. New technologies are needed not only to save the planet but also to safeguard freedom.“ says Petr Šíma, founder and CEO of DEPO Ventures.

The average investment by a Czech angel investor in an early-stage start-up is 80,000 euros, or just under two million korunas. Twenty-one % respondents invest more than 100,000 euros, whilst 44 % angel investors make do with an amount of up to 25,000 euros. As in the previous two years, the most popular sector remains investment in start-ups focusing on financial technology (49 %), followed by e-commerce (37 %). From a technological perspective, Czech investors are most interested in start-ups specialising in artificial intelligence (AI) and blockchain.

Startups with the potential to change the world for the better

Over 38 % respondents in the survey stated that they do not mind which part of the world they invest in. They either have their sights set on the whole world, or do not care in which region a particular start-up operates. A further 18 % investors focus on Central and Eastern Europe, and 15 % on the entire continent. However, nearly a third of investors concentrate solely on domestic start-ups. A broader scope would enable them to tap into global opportunities and increase their chances of diversifying their portfolio more effectively.

„There is a growing feeling in Europe that we must look after ourselves. That it is better than relying on help from the USA, the state, or large corporations. The startup ecosystem plays a fundamental role in this. We see successful entrepreneurs, new entrepreneurs have role models, and they also have an investor base. And angel investors are the essential breeding ground for the entire ecosystem. For a long time, I have been trying to bring new angel investors into investing. And now is the time when investment needs to be increased. Into technology, into entrepreneurs, into our future. Startups as an investment category are indeed risky, but they are the most profitable in the long term. Excellent protection against inflation. And moreover, they have the potential to change the world for the better.“ says Petr Šíma.

Survey results confirm this as well. When asked what the main impetus for investing in startups is, respondents most frequently cited financial motivation. However, the opportunity to support innovation is in third place, and the need to give something back to society is in fifth. Almost three-quarters of survey respondents dedicate fewer than five hours a week to angel investing. More than ten hours a week are spent on it by 13 percent of investors. The time dedicated to investment activities increases with the total number of investments and the age of the investor. The more they invest, the more time they dedicate to managing their portfolio.

The survey suggests that investment in start-ups has so far proved successful. Almost 30 % investors have already exited some of their investments. And nearly 88 % of them sold their stake at a profit. Their investments most often yielded returns ranging from one to five times the original investment. 

Individual investing leads, but investors are missing out on the benefits

Angel investing is usually seen as an individual activity. This was already suggested by last year’s survey and is confirmed by this year’s data. 77 % of respondents invest directly. However, investors combine different approaches. 43 % of respondents invest through a fund, and 42 % have at some point utilised a syndicate with other angel investors. The reluctance of a majority of the investors surveyed to become members of a Czech or international community – such as a club or syndicate – is generally linked to a lack of investment opportunities or co-investors.

Respondents consider the lack of high-quality start-ups to be the biggest problem in the Czech venture capital scene (34 %). Almost a third (31 %) of investors mention that they do not have enough time to search for start-ups, consider start-up valuations to be overvalued, and feel that the legislation is poorly designed. Respondents who have never invested in a technology start-up most frequently cite excessive risk and high capital requirements, alongside a lack of time.

More about the survey

The aim of the research was to map the environment of angel investing in the Czech Republic. To find out how angel investors invest and what problems they face. The report presents the results of a quantitative research survey, which was conducted in the form of an online questionnaire with a sample of 122 respondents. The questionnaire was sent to angel investors in the Czech Republic and further disseminated organically among non-startup investors. Data collection took place during January and February 2022. The survey results, with detailed commentary, are HERE.

More about DEPO Ventures

DEPO Ventures I am an early-stage startup investor in the CEE region, supported by a community of angel investors. I manage two angel funds that allow investors to be actively involved. In total, we have already invested in 18 companies, for example in Tatum, SmartGuide, Mileus, and Oxus.AI. 

The investment group also manages the international syndicate DEPO Angels, through which it connects reputable investors with quality startups and simplifies the entire investment process for them. Furthermore, it arranges favourable syndications, which allow for investments even in smaller amounts.

DEPO Ventures' vision is to teach entrepreneurs and high-net-worth individuals that startup investments should be a natural part of every investor's portfolio.

Press release
Jaroslav Průcha, +420 737 672 966
jarda@hustakomunikejsn.cz

Startups need more than just a good idea and seed funding to succeed. Their survival also depends on things like a quality business plan, sound financial management, and more. Last spring, Michal Menšík, owner and CEO of the logistics startup DoDo, and entrepreneur Zdeněk Šoustal therefore launched V-Sharp Venture Studio to help new companies with their experience and contacts.

Sharing experiences with startup founders will be useful. A year ago, everyone was mainly preoccupied with the pandemic, today the uncertain economic outlook has been added to it. However, the attractiveness of some sectors remains high despite a possible economic slowdown. Therefore, V-Sharp Venture Studio is focusing on new companies in the fields of e-commerce, logistics, and financial technologies. Matej Zabadal, Managing Partner of Studia, believes in their long-term potential.

How has the studio evolved during its time in operation? How does V-Sharp Venture Studio's relationship with startups work? Read the interview with Matej Zabadal.

How many startups do you have in your portfolio at the moment? Do you have any target final number set?

We currently have three companies in our portfolio – Ydistri, Advanto, and Aimful. In all cases, these are start-ups that have developed their own unique product and, at the same time, fit our investment criteria from the initial meeting and discussions.

The first investment was in the startup Ydistri, which is developing software for the redistribution of „dead“ warehouse stock. Using sophisticated predictive models and algorithms, Ydistri can analyse a chain's stock across individual branches and effectively balance inventory. The startup successfully identifies stock that is unsellable in one location and efficiently relocates it to where it will sell quickly, and crucially, at full price. With Ydistri's help, retail chains can effectively tackle the problem of waste and unnecessary discounts, as well as the opposite problem of empty shelves.

Advanto is a fintech startup that allows employees to withdraw their earned wages at any time during the month. It was again a project ahead of its time, the idea of which, we believe, will become standard in Czech society over the years. Advanto now collaborates with a number of prominent companies, including, for example, the popular online store Notino, the fast-food chain Bageterie Boulevard, or the logistics company Hopi.

Aimful is a project that found a significant gap in the market during the Covid pandemic and managed to find a meaningful solution for it. It ensures that people spend their time in work meetings as efficiently as possible and only attend where they are genuinely needed.

We plan to maintain a similar pace of investment in the coming years, not least because we invest our own financial resources into startups. Consequently, we are not under any pressure and can therefore afford to enter only those projects where we see a unique opportunity and, above all, mutual synergy. We do not have a specific number of companies we wish to invest in. We would like to have around ten early-stage companies. It is precisely during the period when these startups are establishing relationships with their first customers, up to the point where they successfully expand abroad, for example, that we see the greatest added value in our presence and support.

In any case, for us, the priority will always be quality over quantity. Therefore, we would rather have fewer companies in our portfolio, but in areas where we can really offer value to the founders and at the same time feel the right „drive“ from their side.

How long do you intend to hold a particular company in your portfolio? What kind of exit do you anticipate?

We don't have a fixed horizon in this regard. We are aware that building a successful company can take varying amounts of time and that there isn't a direct, obstacle-free path to achieving it. Companies like UiPath and Klarna, which are very successful today, serve as proof of this. Even they had a phase of searching for the right product, trying different products and services, or periods of slower growth before their rapid acceleration phase. This is also something that is part of the business journey and shapes a company into its „final“ form. While there are well-known companies globally that shot to the elite right from the start of their operations, these are rare cases. It's important to realise that the vast majority of others spend some time searching for the right product or market fit, and often change their overall strategy, before finding the right direction.

Regarding exits, these are largely dictated by the market. In Europe, the vast majority take the form of M&A; the proportion of IPOs here is smaller than in America. We would be very satisfied if we managed to have one or two companies in our portfolio that make it all the way to the stock exchange. For us, this represents a kind of imaginary peak of our collective endeavour and operation. However, for now, we can only speak in theoretical terms, and more concrete ideas will only take shape as the individual companies develop.

We primarily support new businesses in the e-commerce, logistics and fintech sectors. Why these specific ones?

Primarily, these are all areas that have enormous potential for the future, and at the same time, within the team as a whole, we have long-term experience and know-how in them.

Almost everyone is involved in e-commerce these days – in the Czech Republic, 9 out of 10 people shop online at least once a year. Despite this, however, its overall share of retail sales in our region remains low (around 20 %). Although we are currently seeing a certain slowdown, partly due to high inflation and the uncertainties associated with the Russian invasion, we expect it to gradually pick up again in the future. China provides a good example, where, according to various estimates, the share of e-commerce is two to three times that of Europe and the US. Furthermore, there are still segments that are only just beginning their transition to the online environment. These include, for example, food and other everyday consumer goods, car sales and leasing, and B2B e-commerce. Last but not least, it is worth noting that e-commerce is precisely the area in which we at V-Sharp have many years of expertise. Not only through DODO – which Michal Menšík, founder of V-Sharp Venture Studio, recently secured a 1.5-billion investment for and makes no secret of his ambition to conquer Europe logistically – but also in the period prior to that, when we had been building e-commerce projects for more than ten years.

E-commerce goes hand in hand with fintech, which facilitates e-commerce through increasingly popular deferred payments, smart „embedded“ insurance products, or even entirely new payment methods. At the same time, we live in a time when the entire process of digitalisation of financial services and products is only just beginning, and fintech therefore has a very promising future, its importance continuing to grow and the scope for new ideas is vast. Furthermore, our long-term thesis is that practically every service or product can also contain an element of financial service – whether in the form of a loan, insurance, deferred payment, or payment based on the extent of use of the given product (i.e. so-called usage-based pricing).

Logistics may seem to be in the background, but it's important to realise that nothing would function without it – e-commerce, mentioned above, is just one example. We expect the entire field of logistics to become more complex and sophisticated in the coming years. This is precisely because every logistical problem, no matter how small, ultimately has a global impact. We saw this during the height of the COVID crisis, when we witnessed, quite literally, global chaos throughout the supply chain. We also see significant scope for wider use of artificial intelligence and various data-driven solutions in logistics for the future. And technology is what interests us most about logistics.

Do you already see any future stars in your portfolio? Can you name a specific company or companies?

We believe that every startup we invest in has the potential to become a star. However, if we had to say who is closest to their global ambitions, it would probably be the startup Ydistri. As I mentioned above, Ydistri solves the problem of dead stock for retailers and already works with multinational chains around the world. This is also because it offers a solution to a global problem that is accompanied by high financial and environmental costs, and yet no one had systematically addressed it before. Furthermore, for global retail chains, the issue of sustainable optimisation of stock and logistics is becoming increasingly important, both from the perspective of financial management and social responsibility. Retailers were already able to plan stock purchases quite sophisticatedly, but demand can never be predicted with 100% certainty, and therefore a solution is needed that will balance stock levels even afterwards. And such a solution was missing from the market.

How does the relationship between your studio and the company practically work? Do you, for example, have a say in day-to-day operational matters?

We always strive to bring added value to startups in the form of our own know-how and continuous assistance. For all our projects, cooperation naturally expands. We are often their primary point of contact in the role of mentors. Once we have a good grasp of how a startup thinks and operates, we can support them with operational matters too. We then gladly help them with selecting suitable candidates for individual positions, acquiring new clients, or even product development. However, our primary goal is never to reshape a startup in our own image. For company founders, we are more of a helping hand, intervening only when they themselves wish for it. Management responsibility always remains in their hands.

Are there any sectors you would not invest in? If so, which ones and why?

Our primary criterion when selecting a suitable investment is whether we understand the relevant sector or not. It is difficult, if not impossible, to be an add-on value investor without a deep knowledge of the problem. We always start from a fundamental knowledge of the industry, the building of which requires a considerable amount of time; we are practically learning throughout our lives. We never merely try to superficially grasp „trends“; we simply don't see the point in that.

Naturally, there are quite a few extremely interesting areas where we don't yet have sufficient knowledge to proudly invest – for example, healthcare, biotech, or certain segments of hardware. Therefore, one of our main challenges remains primarily to stick to our craft and not get caught up in what is currently „fashionable“ in the venture capital world. At the same time, we believe there are still plenty of opportunities in our three main areas of interest – especially throughout the Central and Eastern European region, so there's no need to look elsewhere. If we were to enter another segment, we would need to possess some specific and unique insight that would convince us of the correctness of such a decision.

How did you combine your own business with V-Sharp Venture Studio?

V-Sharp Venture Studio was co-founded by Michal Menšík, CEO of the logistics group DODO, and Zdeněk Šoustal, CEO of Reticulum, which primarily invests long-term in industrial real estate, agriculture, and technology companies. I am responsible for ensuring that our businesses can be best combined with investments. At V-Sharp Venture Studio, I hold the position of Managing Partner, meaning I oversee the entire investment process. Our team analyses new investment opportunities daily in the areas we have identified.

Michal and Zdeněk are then part of the investment committee, which jointly decides whether a specific investment is actually realised, and then they are available to the founders as mentors. In this regard, I think V-Sharp is quite unique – the startup founder has access to entrepreneurs who have already built billion-dollar businesses. They know how to build a service so that it can be scaled, how to find product-market fit, etc. In addition, as they themselves say, in their careers, besides a number of successes, they have also made countless mistakes. They are therefore aware of what to avoid in business.

What impact do current uncertainties such as war, high inflation, or the pandemic have on startup financing?

These factors also have a different impact on startups with varied focuses. Generally, the availability of capital is decreasing, as is investors' willingness to fund models with high capital requirements. At the same time, the appetite for investing in companies that are not long-term sustainable is also diminishing. In this context, we are talking about, for example, ultra-fast grocery delivery (Gorillas, Jokr), BNPL (Klarna), or certain segments of crypto.

On the other hand, great and promising startups don't need to despair, as they will always find investors. Investing, especially in the venture capital space, is a long-term affair. Many investors have already experienced similar crises (remember the year 2000 or the period of 2007-2009) and can therefore think on a significantly longer timescale than the current turbulence will persist in the world.

What is unlikely to return anytime soon (and perhaps never) is the era of cheap capital and extreme valuations. We saw this, for example, with some unicorns in the crypto segment, which didn't even have a clearly defined business model, or in fact, mostly had none at all. We saw the same approach with some hyper-express delivery services – while they had a business model, it was clear from the outset that it could never be profitable. Such companies were driven by persistently low interest rates and an excess of capital, but these factors will now be significantly weakened and could even disappear entirely from the economy. On the contrary, there is a stronger focus on „value creation“ startups that solve clearly defined problems over the long term with innovative solutions.