Investor profile: venture fund company “FINAM”. Dmitry Rodionov
With a slight delay, I continue to publish some materials from my blog about venture investments, venture investors and startups IdeaBlog.ru . This material is from the blog heading Venture Capitalst's Profile , in which I once a week publish a profile of another venture investor, based on a personal conversation with them, and tells about investment preferences and requirements for Finam venture capital fund projects. The original article is here .
Dmitry Vitalievich Rodionov , Project Manager (Venture Investments) of the Finam High-Tech Investment Center.
Age: 32 years.
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The amount of funds for investment: about 1.5 billion rubles.
Projects invested by the fund: Mamba , Runner , MoneyMail , Buka , “Ashmanov and Partners” and others.
Previous jobs: Deputy General Director, Director of the Agency for Anti-Crisis Technologies and Investments branch, Head of the Spring Wireless project of the direct investment fund Delta Private Equity Partners , their projects.
Contacts:
Address: Russia, Moscow, st. Myasnitskaya, house 26a, p. 1
Phone +7 (495) 796-93-88 (multichannel)
Fax +7 (495) 796-93-89
E-mail: rodionov@finam.ru
Website: www.finam.ru
Finam is known in the venture capital investment market in Russia primarily for its investments in Mamba , Begun , MoneyMail , and Buka . “Finam” invests venture projects through its High-Tech Investment Center, and then “packs” projects that have reached its design capacity in the closed-end investment fund (closed venture investment fund) Finam - Information Technologies, whose shares are traded on the stock exchange. This is a kind of preparation of invested and mature projects that are in their portfolio to an IPO - stock exchange investors, looking at the shares of the closed-end mutual investment fund that are traded on the stock exchange, study the portfolio of the closed-end mutual investment fund, getting acquainted with the companies whose shares are “packed” in it, and putting such a company to An IPO in the future will not require a lot of explanatory work among investors about what these companies are and what they do. In addition, the closed-end investment fund, through the additional issue of shares and placing them on the stock exchange, can attract the funds of small portfolio investors for their subsequent investment in other promising projects. The capitalization of the fund "FINAM - Information Technologies", which, I repeat, does not include all, but only the "matured" projects invested by the company, is now about 1.6 billion rubles.
Dmitry Rodionov heads the venture division of the Finam High-Tech Investment Center. By education he is a physicist, graduated from the Moscow State University. Previously, he had his own projects, in which he attracted venture capital investments, so he knows about venture capital investment both from a startup person and from an investor, which, in my opinion, is very important in this industry. In response to my traditional first question about what has happened in the last year in venture investment in Russia, he answers:
The total limit of funds that Finam is ready to invest in venture capital projects, according to Rodionov, is about 1.5 billion rubles. This is the volume of free, not yet invested funds, which was at the time of our conversation with him (end of October 2007).
The maximum in terms of the required investment project, which “Finam” considered (together with its partners), required investments in the amount of $ 20-25 million. Now there is a project in progress, requiring investments in the amount of $ 19 million. is an angel, and is now at a late start-up stage . But usually projects that require investments of no more than $ 10 million are considered. The minimum investment amount is usually $ 1 million.
Investment preferences
Like the leaders of other venture capital funds, Rodionov would like to finance start-ups that are already running and are in the stages of growth or expansion . However, experiencing, like other venture capital investors in Russia, the acute shortage of high-quality projects ( what a quality project is in the view of venture investors, read here ) forces the fund to shift to ever earlier stages . Therefore, the fund invests, including projects that are in the seed-stage , while giving preference to those projects that synergize with the projects already existing in the Finam portfolio.
In order for a project that does not synergize with other projects of Finam, receive funding from it at the seed stage, a startup, according to Rodionov, must have a very good understanding of the market in which he intends to operate.
If we talk about preferred industries, this, of course, is primarily an Internet business, in which Finam has a lot of experience, which is confirmed by the public part of the company's investment portfolio. But only Internet interests of “Finam” as a venture investor are not limited to - it is also interested in other technological startups based on technical inventions. “Finam” signed a cooperation agreement with FSUE “Eleron” , which is the structure of Rosatom for financing technology startups, including “Finam” interested in a project in the field of 3D object recognition. Investments in joint projects with FSUE Eleron , according to Dmitry Rodionov, will amount to tens of millions of dollars.
As for other venture capital funds, the main problem for the Finam venture fund is the absence of a business component in most projects. This applies both to projects brought by inventors and scientists, and, often, to Internet projects:
In connection with the described problems of a chronic shortage in the proposed projects, entrepreneurs who can do business in development, especially in high-tech projects, Finam tries to get a controlling stake in similar ( i.e., high- end projects) IdeaBlog.ru projects because will lead its business team, and without a decisive vote, as practice shows, it is very difficult to “cross over” the scientists who own the development with businessmen who monetize it. Without agreement between them, the enterprise is doomed, and a controlling stake allows the foundation to successfully develop the business, giving more authority to the business team, to the mutual satisfaction of the profits of all parties. The controlling stake seeks to get “Finam” and in capital-intensive, requiring large investments projects.
When high-tech projects require more fundamental research, without which building a business is impossible, then “Finam” does not finance such projects, since, according to Rodionov, “the risks in such projects are very high.”
In Internet projects, when among the founders of the project there are people who can monetize it effectively, that is, to develop the project as a business , Finam often takes for its investments only a blocking stake (25% +).
Rodionov’s ideal project describes it like this:
In the process of interviewing venture investors, I often asked them a question: are they ready to finance global projects? And so that the answer was not unfounded, I suggested that they honestly answer the question of whether they agreed to finance Google at the time when he was just starting, and despite the fact that at that moment there were already search engines like Yahoo, AltaVista , Lycos and others - after all, many people were convinced that there was nothing to “catch” in the search and the market was divided once and for all. I really liked that Rodionov thought for a long time before answering this question, and then honestly answered that he would like to answer “yes”, but “until you encounter such a situation, it will not work to answer this question”. Nevertheless, according to Rodionov, he is looking for global projects that would earn not only on the Russian-speaking markets, but would also be oriented towards development as players on a global scale. For example, according to the plan, one of the projects invested by Finam should earn 80% of the money in the US market, 15% in Europe and 5% in Russia. True, he notes, a similar business model has already been on the market. Rodionov also said that they have a project, about which the investment council sounded that either this technology will conquer the world, or disappear. This suggests that the fund is ready to finance projects with global ambitions, and not just projects focused on the Russian-speaking market.
Regarding the options for “exit” from the invested projects, Rodionov says that he, as a person engaged in venture capital investments, is more aware of focusing companies on the sale to strategic investors. Although the "outputs" of projects through an IPO - the future, he said.
Work with projects
As already mentioned, “Finam”, according to Rodionov, like other venture investors, is experiencing an acute shortage of quality projects with a good knowledge of the markets in which they are going to work, a thoughtful business model, a calculated development model and a team capable of building and developing business built on the idea of a startup. Therefore, “Finam” is actively looking for projects himself, and not just waiting for the start-ups to come to him themselves.
In the week, “Finam” is sent an average of 5-7 projects, and the foundation finds about 10 projects by itself. Most of them, according to Rodionov, are eliminated because of the fascination of startups on technology rather than business, and because startups do not understand what consumer needs their project closes. Because of this, about 1/3 projects are eliminated. Of the remaining 1/3 are eliminated due to a lack of understanding by startups of how they will monetize the attracted audience. Also, projects are eliminated due to the absence in the founders of the project “driver” - a person “burning” with the project and able to “ignite” others with this drive.
Like other investors with whom I spoke, I asked Rodionov a question about what he means by the word “team”? Prior to my meetings with investors, it was not at all clear to me what exactly they had in mind when speaking of the team. After all, often a project is made by 2-3 people who are not going to involve other people in their project for a share in it (except for the investor, of course), and they think to hire them for a salary, and even know who these people they will hire. These people are not partners, it makes no sense to hire them before receiving funding - i.e. at the time of the presentation of the project to the investor, these often very important members of the start-up team actually have nothing to do with it. So, in this case, the project, it turns out, there is no normal team? Rodionov described to this what he means by the word “command” as follows:
By the way, the note of startups implementing internet projects: targeted ( i.e., specialized ) internet projects that are based on advertising revenue are considered by Finam. If the business model is realistic, of course. But realism is best demonstrated, as mentioned above, at least by initial sales - then we can say that the business model is realistic, and not “taken from the ceiling.”
The decision on the financing of the project is made, usually in a period of 3 to 6 months. During this time, the foundation not only conducts intensive due diligence of the project, but also completes its business model and the company's development plan together with startups. Rodionov says he does not remember a single project in which this would not be required.
According to Rodionov, “Finam” is very helpful in venture investment in the name of the company and its reputation. He agrees that the reputation of a venture investor and his publicity are the best guarantee for a start-up that no one steals his project, does not implement it without him, and also does not throw him out of business by raider methods after the project develops.
Reprinting of the article is allowed only with the obligatory indication of the author (Arthur Welf) and with the obligatory active link to the blog about venture investments, venture investors and startups IdeaBlog.ru
Leave your feedback on working with “Finam”, on negotiations with him, as well as read reviews of others, you can in this thread on the forum IdeaBlog.ru .
The original article is here .
UPD: This article was posted the night before last in the collective blog “Startups”, and then someone misled it overnight so that it stopped showing up in it, and I transferred it to a personal blog. But since I guess who made it the night before last, before the main mass of Habrunarod, such a “flash mob,” was pulled up, I decided to try again to place the article in Startups, especially since it was in my personal blog. , her rating was raised. We'll see…
Dmitry Vitalievich Rodionov , Project Manager (Venture Investments) of the Finam High-Tech Investment Center.
Age: 32 years.
')
The amount of funds for investment: about 1.5 billion rubles.
Projects invested by the fund: Mamba , Runner , MoneyMail , Buka , “Ashmanov and Partners” and others.
Previous jobs: Deputy General Director, Director of the Agency for Anti-Crisis Technologies and Investments branch, Head of the Spring Wireless project of the direct investment fund Delta Private Equity Partners , their projects.
Contacts:
Address: Russia, Moscow, st. Myasnitskaya, house 26a, p. 1
Phone +7 (495) 796-93-88 (multichannel)
Fax +7 (495) 796-93-89
E-mail: rodionov@finam.ru
Website: www.finam.ru
Finam is known in the venture capital investment market in Russia primarily for its investments in Mamba , Begun , MoneyMail , and Buka . “Finam” invests venture projects through its High-Tech Investment Center, and then “packs” projects that have reached its design capacity in the closed-end investment fund (closed venture investment fund) Finam - Information Technologies, whose shares are traded on the stock exchange. This is a kind of preparation of invested and mature projects that are in their portfolio to an IPO - stock exchange investors, looking at the shares of the closed-end mutual investment fund that are traded on the stock exchange, study the portfolio of the closed-end mutual investment fund, getting acquainted with the companies whose shares are “packed” in it, and putting such a company to An IPO in the future will not require a lot of explanatory work among investors about what these companies are and what they do. In addition, the closed-end investment fund, through the additional issue of shares and placing them on the stock exchange, can attract the funds of small portfolio investors for their subsequent investment in other promising projects. The capitalization of the fund "FINAM - Information Technologies", which, I repeat, does not include all, but only the "matured" projects invested by the company, is now about 1.6 billion rubles.
Dmitry Rodionov heads the venture division of the Finam High-Tech Investment Center. By education he is a physicist, graduated from the Moscow State University. Previously, he had his own projects, in which he attracted venture capital investments, so he knows about venture capital investment both from a startup person and from an investor, which, in my opinion, is very important in this industry. In response to my traditional first question about what has happened in the last year in venture investment in Russia, he answers:
An increasing number of truly venture projects are emerging. A year ago, venture projects boldly called investments in the creation of a network of stores or construction projects. Now there are real venture projects and real venture funds, rather than private equity funds, which called themselves venture capital funds. In many ways, the situation has been influenced by state rhetoric in this regard.
The total limit of funds that Finam is ready to invest in venture capital projects, according to Rodionov, is about 1.5 billion rubles. This is the volume of free, not yet invested funds, which was at the time of our conversation with him (end of October 2007).
The maximum in terms of the required investment project, which “Finam” considered (together with its partners), required investments in the amount of $ 20-25 million. Now there is a project in progress, requiring investments in the amount of $ 19 million. is an angel, and is now at a late start-up stage . But usually projects that require investments of no more than $ 10 million are considered. The minimum investment amount is usually $ 1 million.
Investment preferences
Like the leaders of other venture capital funds, Rodionov would like to finance start-ups that are already running and are in the stages of growth or expansion . However, experiencing, like other venture capital investors in Russia, the acute shortage of high-quality projects ( what a quality project is in the view of venture investors, read here ) forces the fund to shift to ever earlier stages . Therefore, the fund invests, including projects that are in the seed-stage , while giving preference to those projects that synergize with the projects already existing in the Finam portfolio.
In order for a project that does not synergize with other projects of Finam, receive funding from it at the seed stage, a startup, according to Rodionov, must have a very good understanding of the market in which he intends to operate.
If we talk about preferred industries, this, of course, is primarily an Internet business, in which Finam has a lot of experience, which is confirmed by the public part of the company's investment portfolio. But only Internet interests of “Finam” as a venture investor are not limited to - it is also interested in other technological startups based on technical inventions. “Finam” signed a cooperation agreement with FSUE “Eleron” , which is the structure of Rosatom for financing technology startups, including “Finam” interested in a project in the field of 3D object recognition. Investments in joint projects with FSUE Eleron , according to Dmitry Rodionov, will amount to tens of millions of dollars.
As for other venture capital funds, the main problem for the Finam venture fund is the absence of a business component in most projects. This applies both to projects brought by inventors and scientists, and, often, to Internet projects:
There are many ideas - few entrepreneurs. Literally half the ideas I want to “incite” a good entrepreneur who could monetize these ideas. However, inventors are very bad, as a rule, get along with businessmen who have to build a business project, believing that it is they - people involved in scientific development and invention - have to decide how the project will develop as a business. People often come to us with patents for excellent things, they offer to make a product , but they have absolutely no idea how to do business . We are a venture fund, we invest in startups and help in key moments, but we cannot manage the company's business ourselves - this is what the startup founders team should do, and we should see that they have thought out everything and will cope with their business organization. Recently, one inventor came to us with a very interesting patent - the typical “head of the research institute of the Soviet era”. I asked him: what exactly do you need money for? He was surprised: how we would rent an office, buy a car, hire employees, and they will work. However, he absolutely could not imagine how he would do BUSINESS. How to make a product represented well, but how to make a business - I had no idea. But young startups, coming to us with good ideas, very often have no idea how to make a business out of it.
In connection with the described problems of a chronic shortage in the proposed projects, entrepreneurs who can do business in development, especially in high-tech projects, Finam tries to get a controlling stake in similar ( i.e., high- end projects) IdeaBlog.ru projects because will lead its business team, and without a decisive vote, as practice shows, it is very difficult to “cross over” the scientists who own the development with businessmen who monetize it. Without agreement between them, the enterprise is doomed, and a controlling stake allows the foundation to successfully develop the business, giving more authority to the business team, to the mutual satisfaction of the profits of all parties. The controlling stake seeks to get “Finam” and in capital-intensive, requiring large investments projects.
When high-tech projects require more fundamental research, without which building a business is impossible, then “Finam” does not finance such projects, since, according to Rodionov, “the risks in such projects are very high.”
In Internet projects, when among the founders of the project there are people who can monetize it effectively, that is, to develop the project as a business , Finam often takes for its investments only a blocking stake (25% +).
Rodionov’s ideal project describes it like this:
This is an Internet business that has already gone out of the stage when the project has only a bare business model built on the original technology patented under US or European patent law, which requires two-stage financing: in the first stage, the project requires $ 1-3 million, second - up to $ 10 million. The project's business model should be run-in in the invested company - i.e. sales are very desirable, at least initial. The founders of the project should have personal charisma, they should themselves be passionate about the project and should be able to light people with their project. Among the founders - a cool businessman and a highly qualified technical specialist. The IRR (internal rate of return) of the project must be at least 40 - that is, the project must pay off within a year and a half or two years, the term of “sitting” of the venture capital fund in the company is 4-5 years, the method of “exit” of the venture investor from the company is the sale of a strategic to the investor.
In the process of interviewing venture investors, I often asked them a question: are they ready to finance global projects? And so that the answer was not unfounded, I suggested that they honestly answer the question of whether they agreed to finance Google at the time when he was just starting, and despite the fact that at that moment there were already search engines like Yahoo, AltaVista , Lycos and others - after all, many people were convinced that there was nothing to “catch” in the search and the market was divided once and for all. I really liked that Rodionov thought for a long time before answering this question, and then honestly answered that he would like to answer “yes”, but “until you encounter such a situation, it will not work to answer this question”. Nevertheless, according to Rodionov, he is looking for global projects that would earn not only on the Russian-speaking markets, but would also be oriented towards development as players on a global scale. For example, according to the plan, one of the projects invested by Finam should earn 80% of the money in the US market, 15% in Europe and 5% in Russia. True, he notes, a similar business model has already been on the market. Rodionov also said that they have a project, about which the investment council sounded that either this technology will conquer the world, or disappear. This suggests that the fund is ready to finance projects with global ambitions, and not just projects focused on the Russian-speaking market.
Regarding the options for “exit” from the invested projects, Rodionov says that he, as a person engaged in venture capital investments, is more aware of focusing companies on the sale to strategic investors. Although the "outputs" of projects through an IPO - the future, he said.
Work with projects
As already mentioned, “Finam”, according to Rodionov, like other venture investors, is experiencing an acute shortage of quality projects with a good knowledge of the markets in which they are going to work, a thoughtful business model, a calculated development model and a team capable of building and developing business built on the idea of a startup. Therefore, “Finam” is actively looking for projects himself, and not just waiting for the start-ups to come to him themselves.
In the week, “Finam” is sent an average of 5-7 projects, and the foundation finds about 10 projects by itself. Most of them, according to Rodionov, are eliminated because of the fascination of startups on technology rather than business, and because startups do not understand what consumer needs their project closes. Because of this, about 1/3 projects are eliminated. Of the remaining 1/3 are eliminated due to a lack of understanding by startups of how they will monetize the attracted audience. Also, projects are eliminated due to the absence in the founders of the project “driver” - a person “burning” with the project and able to “ignite” others with this drive.
Like other investors with whom I spoke, I asked Rodionov a question about what he means by the word “team”? Prior to my meetings with investors, it was not at all clear to me what exactly they had in mind when speaking of the team. After all, often a project is made by 2-3 people who are not going to involve other people in their project for a share in it (except for the investor, of course), and they think to hire them for a salary, and even know who these people they will hire. These people are not partners, it makes no sense to hire them before receiving funding - i.e. at the time of the presentation of the project to the investor, these often very important members of the start-up team actually have nothing to do with it. So, in this case, the project, it turns out, there is no normal team? Rodionov described to this what he means by the word “command” as follows:
A “team” is at least one person who has the leader’s charisma, believes in his project, and knows how to “infect” the work on the implementation of the project to others, who adequately assess the market on which the startup will work. Moreover, he makes this assessment as an entrepreneur - that is, from the point of view of building a business and monetizing the project.
By the way, the note of startups implementing internet projects: targeted ( i.e., specialized ) internet projects that are based on advertising revenue are considered by Finam. If the business model is realistic, of course. But realism is best demonstrated, as mentioned above, at least by initial sales - then we can say that the business model is realistic, and not “taken from the ceiling.”
The decision on the financing of the project is made, usually in a period of 3 to 6 months. During this time, the foundation not only conducts intensive due diligence of the project, but also completes its business model and the company's development plan together with startups. Rodionov says he does not remember a single project in which this would not be required.
According to Rodionov, “Finam” is very helpful in venture investment in the name of the company and its reputation. He agrees that the reputation of a venture investor and his publicity are the best guarantee for a start-up that no one steals his project, does not implement it without him, and also does not throw him out of business by raider methods after the project develops.
Reprinting of the article is allowed only with the obligatory indication of the author (Arthur Welf) and with the obligatory active link to the blog about venture investments, venture investors and startups IdeaBlog.ru
Leave your feedback on working with “Finam”, on negotiations with him, as well as read reviews of others, you can in this thread on the forum IdeaBlog.ru .
The original article is here .
UPD: This article was posted the night before last in the collective blog “Startups”, and then someone misled it overnight so that it stopped showing up in it, and I transferred it to a personal blog. But since I guess who made it the night before last, before the main mass of Habrunarod, such a “flash mob,” was pulled up, I decided to try again to place the article in Startups, especially since it was in my personal blog. , her rating was raised. We'll see…
Source: https://habr.com/ru/post/17104/
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