Venture Investor Record: E-Trust Group
On November 19, I launched my stand alone blog about venture investments, venture capital investors and start-ups - IdeaBlog.ru , and here I will post some materials from it with a delay of several days. The blog has a section "Venture Capitalist's Profile", and this material from this section.
Dossier: Maxim Karimov, E-Trust Group
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Maximov Karimov , partner of the group of business angels " E-Trust Group "
Age : 36 years old
It has been working as a full-time business angel since 2003, this is its only occupation at the moment.
The amount of funds for investment : $ 10 million
Previous jobs :
Top Manager of Norilsk Nickel and Basic Element
Contact :
Business Center Regus, Smolenskaya Square, Building 3, 119099, Moscow, Russia.
Phone: +7 (095) 9338944
Fax: +7 (095) 9378290
e-mail: info@e-trustgroup.com
Website: www.e-trustgroup.ru
The group of business angels E-Trust Group is an informal association of business angels, most of which are current or former top managers of major Russian companies. The group was established and has been operating since 2003. The group’s face is Maxim Karimov, the former top manager of Norilsk Nickel and Basic Element, the other partners of the group prefer not to advertise. Karimov does not receive remuneration from partners in the E-Trust Group and is not a common fund manager in a generally accepted view: each partner decides to invest in a project independently, although most of the preparatory work before investing the project (assessment, expertise, negotiation with startups), it is Karimov who performs it. The partners of the group plan to invest $ 10 million in venture projects, of which about 10-15% are currently invested. The group has a shortage of high-quality, well-developed venture projects that would fit the investment criteria of the group (more on this below ). The shortage of projects is clearly indicated by the fact that the group has financed only 3 projects in 4 years, and the group was able to invest only 10-15% of the funds, as mentioned above.
According to Karimov, the assertion that there is a shortage of venture capital money in Russia is wrong: they are more likely not given ( for those projects that startups bring - IdeaBlog.ru ). “It is important for me to understand the business model of the project,” says Karimov. - And, above all, I need to understand the risks associated with the implementation of the project. I initially speak as a skeptic, a critic of projects. ” According to him, finding the application of technology is no less important than developing it.
On average, Karimov considers 4-5 Executive Summary projects per day, most are eliminated right away: the main reasons for refusals are the lack of a business model for the project, as well as inconsistency between projects and investors' expectations. As Karimov figuratively says, “the project should suit the investor just as a good suit suits a person”. In other words, each investor has his own idea of ​​an ideal project, and in order for such an investor to invest in one or another startup, it is necessary that the project be as close as possible to the “ideal”.
Karimov advises starters who are in the seed stage to start with the Bortnik Foundation ( IdeaBlog.ru will write more about the Bortnik Foundation a little later ), namely with its START program: according to Karimov, there is in fact a very competitive environment, and this fund, like and everything lacks thoughtful and high-quality projects. “Their money is not enough to develop a business,” says Karimov, “but they give impetus.”
Before addressing business angels and venture funds, Karimov advises working well above all on the Executive Summary of the project. According to him, this document should be no more than 3 pages (although it is desirable to keep within 1 page) and should contain essential points of a startup as a business that are important for an investor . Karimov alone does not go to startups. According to him, this is fundamental: how an active startup star looks for investments, convinces investors of the advantages of his project, tries to maximize every opportunity to launch his startup, gives an idea of ​​the startup psychology and characterizes whether he will also be active "Squeeze everything out of all possible situations" and in business.
As already mentioned, the E-Trust Group currently has 3 projects in its portfolio. There was a fourth one, but the founder of the startup bought out a stake in the project from the investor, and as a result this project did not bring any profit or loss. The total investment in these 3 projects was about $ 1 million - maybe a little more. The group has not yet implemented the exits from the invested projects.
In response to the question that he is preventing him from investing in Russia (journalists like to speculate on the topic of a bad investment climate, controversial tax system and unclear legislation), Karimov replies that there are no unsolvable problems in Russia, he does not require anything from the state and complains, if only there are more good projects, and everything would be great. And he adds that his investment opportunities are not realized, since he has nowhere to invest the planned investment funds.
Investment preferences
Like all venture capital investors, Karimov is looking for projects that are global in nature - that is, those whose products or services will be in demand in different countries and in large markets. Like other venture capital investors, Karimov is very important in the business model of start-ups offered for investment. However, unlike most other venture capital investors, Karimov, according to him, will not refuse to finance the project due to the lack of a team, although the group’s website mentions the need for a professional management team capable of ensuring the development of the project after receiving funding. Moreover: Karimov is ready to rebuild the business component of a startup on his own - it looks like he is even more interested in projects where he can build and run a business, and the founder of the startup will concentrate on the technical side of the project.
The limit of financing for one project Karimov determines the amount of $ 1 million. This is not the average, but the maximum amount of investment in one project. Looking for projects that are in the seed and startup stages .
Although in response to the question of which industries E-Trust Group prefers to invest in, Karimov answers fairly standardly - IT, software, Internet projects - but with more detailed questioning it turned out that Karimov’s ideal project looks like this:
It seemed to me that for Karimov it was very important to have a patented technical solution, and that the patent protected the technology from all sides. He told the story of how a start-up from far-abroad countries turned to him with an interesting project that allowed him to download any song currently playing on any radio station by sending an SMS to the short number. He did not finance this project due to the fact that, according to him, the patent held by the start-up company did not fully protect the technology. Instead of a patent, a patent application can also be passed, having been examined - according to patent law, the protection of an invention or utility model is granted from the moment a patent application is filed.
When investing money, Karimov seeks to get a controlling stake (50% + 1 vote), although, apparently, in these matters he is a flexible person - in response to my question, does the startup have “veto” when making strategic decisions, he responds that he is ready to give the startup a right to eliminate the fear of the startup, although this is an additional risk for him as an investor, but he adds that nothing happens for nothing and the startup in this case will most likely have to sacrifice as well. This seems to be a sensible position.
Terms of investment
As already mentioned, Karimov seeks to get a share in the invested business of 50% + 1 vote. Given that he, as a rule, invests projects at the seed-stage , and at this stage, according to Karimov, it is impossible to accurately determine the size of the required investments and the project may require more investments in the future than planned, the investment conditions do not seem draconian. Moreover, Karimov is ready to take on most of the work on organizing and running a startup business. We can assume that with this option, the start-up gets not only investments, but also an experienced businessman, who is very actively involved in building and developing a business, as a partner, and on such conditions 50% + 1 vote is very good conditions.
As a rule, Karimov also sets conditions for 100% of the profits from the first sales of a startup to return on investment, and after the investments are returned, the profit is divided according to the distribution of shares.
The original article is here .
Dossier: Maxim Karimov, E-Trust Group
')
Maximov Karimov , partner of the group of business angels " E-Trust Group "
Age : 36 years old
It has been working as a full-time business angel since 2003, this is its only occupation at the moment.
The amount of funds for investment : $ 10 million
Previous jobs :
Top Manager of Norilsk Nickel and Basic Element
Contact :
Business Center Regus, Smolenskaya Square, Building 3, 119099, Moscow, Russia.
Phone: +7 (095) 9338944
Fax: +7 (095) 9378290
e-mail: info@e-trustgroup.com
Website: www.e-trustgroup.ru
The group of business angels E-Trust Group is an informal association of business angels, most of which are current or former top managers of major Russian companies. The group was established and has been operating since 2003. The group’s face is Maxim Karimov, the former top manager of Norilsk Nickel and Basic Element, the other partners of the group prefer not to advertise. Karimov does not receive remuneration from partners in the E-Trust Group and is not a common fund manager in a generally accepted view: each partner decides to invest in a project independently, although most of the preparatory work before investing the project (assessment, expertise, negotiation with startups), it is Karimov who performs it. The partners of the group plan to invest $ 10 million in venture projects, of which about 10-15% are currently invested. The group has a shortage of high-quality, well-developed venture projects that would fit the investment criteria of the group (more on this below ). The shortage of projects is clearly indicated by the fact that the group has financed only 3 projects in 4 years, and the group was able to invest only 10-15% of the funds, as mentioned above.
According to Karimov, the assertion that there is a shortage of venture capital money in Russia is wrong: they are more likely not given ( for those projects that startups bring - IdeaBlog.ru ). “It is important for me to understand the business model of the project,” says Karimov. - And, above all, I need to understand the risks associated with the implementation of the project. I initially speak as a skeptic, a critic of projects. ” According to him, finding the application of technology is no less important than developing it.
On average, Karimov considers 4-5 Executive Summary projects per day, most are eliminated right away: the main reasons for refusals are the lack of a business model for the project, as well as inconsistency between projects and investors' expectations. As Karimov figuratively says, “the project should suit the investor just as a good suit suits a person”. In other words, each investor has his own idea of ​​an ideal project, and in order for such an investor to invest in one or another startup, it is necessary that the project be as close as possible to the “ideal”.
Karimov advises starters who are in the seed stage to start with the Bortnik Foundation ( IdeaBlog.ru will write more about the Bortnik Foundation a little later ), namely with its START program: according to Karimov, there is in fact a very competitive environment, and this fund, like and everything lacks thoughtful and high-quality projects. “Their money is not enough to develop a business,” says Karimov, “but they give impetus.”
Before addressing business angels and venture funds, Karimov advises working well above all on the Executive Summary of the project. According to him, this document should be no more than 3 pages (although it is desirable to keep within 1 page) and should contain essential points of a startup as a business that are important for an investor . Karimov alone does not go to startups. According to him, this is fundamental: how an active startup star looks for investments, convinces investors of the advantages of his project, tries to maximize every opportunity to launch his startup, gives an idea of ​​the startup psychology and characterizes whether he will also be active "Squeeze everything out of all possible situations" and in business.
As already mentioned, the E-Trust Group currently has 3 projects in its portfolio. There was a fourth one, but the founder of the startup bought out a stake in the project from the investor, and as a result this project did not bring any profit or loss. The total investment in these 3 projects was about $ 1 million - maybe a little more. The group has not yet implemented the exits from the invested projects.
In response to the question that he is preventing him from investing in Russia (journalists like to speculate on the topic of a bad investment climate, controversial tax system and unclear legislation), Karimov replies that there are no unsolvable problems in Russia, he does not require anything from the state and complains, if only there are more good projects, and everything would be great. And he adds that his investment opportunities are not realized, since he has nowhere to invest the planned investment funds.
Investment preferences
Like all venture capital investors, Karimov is looking for projects that are global in nature - that is, those whose products or services will be in demand in different countries and in large markets. Like other venture capital investors, Karimov is very important in the business model of start-ups offered for investment. However, unlike most other venture capital investors, Karimov, according to him, will not refuse to finance the project due to the lack of a team, although the group’s website mentions the need for a professional management team capable of ensuring the development of the project after receiving funding. Moreover: Karimov is ready to rebuild the business component of a startup on his own - it looks like he is even more interested in projects where he can build and run a business, and the founder of the startup will concentrate on the technical side of the project.
The limit of financing for one project Karimov determines the amount of $ 1 million. This is not the average, but the maximum amount of investment in one project. Looking for projects that are in the seed and startup stages .
Although in response to the question of which industries E-Trust Group prefers to invest in, Karimov answers fairly standardly - IT, software, Internet projects - but with more detailed questioning it turned out that Karimov’s ideal project looks like this:
“This is a patented technical solution that can offer a new and marketable product to the market, all components of which are produced or can be outsourced ( i.e. there is no need to build a plant - IdeaBlog.ru ). A startup should actually be an engineering company that does not have significant funds invested in tangible assets, and product distribution should be possible through existing distribution networks ( so as not to invest significant funds in building a distribution network ). ROI ( Return On Investments - IdeaBlog.ru ) should be at least tenfold over a period of 3-4 years ( i.e. Karimov is counting on at least a tenfold increase in the value of his investments over 3-4 years - IdeaBlog.ru ), but the more Naturally, the better :). A business must be able to reach sales of at least $ 10 million in a couple of years. ”
It seemed to me that for Karimov it was very important to have a patented technical solution, and that the patent protected the technology from all sides. He told the story of how a start-up from far-abroad countries turned to him with an interesting project that allowed him to download any song currently playing on any radio station by sending an SMS to the short number. He did not finance this project due to the fact that, according to him, the patent held by the start-up company did not fully protect the technology. Instead of a patent, a patent application can also be passed, having been examined - according to patent law, the protection of an invention or utility model is granted from the moment a patent application is filed.
When investing money, Karimov seeks to get a controlling stake (50% + 1 vote), although, apparently, in these matters he is a flexible person - in response to my question, does the startup have “veto” when making strategic decisions, he responds that he is ready to give the startup a right to eliminate the fear of the startup, although this is an additional risk for him as an investor, but he adds that nothing happens for nothing and the startup in this case will most likely have to sacrifice as well. This seems to be a sensible position.
Terms of investment
As already mentioned, Karimov seeks to get a share in the invested business of 50% + 1 vote. Given that he, as a rule, invests projects at the seed-stage , and at this stage, according to Karimov, it is impossible to accurately determine the size of the required investments and the project may require more investments in the future than planned, the investment conditions do not seem draconian. Moreover, Karimov is ready to take on most of the work on organizing and running a startup business. We can assume that with this option, the start-up gets not only investments, but also an experienced businessman, who is very actively involved in building and developing a business, as a partner, and on such conditions 50% + 1 vote is very good conditions.
As a rule, Karimov also sets conditions for 100% of the profits from the first sales of a startup to return on investment, and after the investments are returned, the profit is divided according to the distribution of shares.
The original article is here .
Source: https://habr.com/ru/post/16716/
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