AddVenture - a crisis medicine for a Russian startup
Just 4 months after the launch of the AddVenture start-up dynamic development program at the height of the crisis, two of its six “graduates” attracted the next round of investment. The AddVenture Business Angels Foundation sees the crisis as a “window of opportunity” and launches the second program in March.
In August 2008, the AddVenture Foundation selected six IT startups, into which they invested $ 20–50 thousand each. We were looking for teams of "superheroes" - goal-oriented people with a deep understanding of the market, because the only certainty in startups is that "everything will go wrong." It is known for certain that a business plan will become obsolete before the ink dries. So, you need to be able to adapt and play outside your comfort zone, to be able to quickly find solutions.
So, the first tranche is transferred to the account of the newly created company. Here, the work of most investors, if it does not stop, then becomes much less intensive, but at this moment the most interesting things began.
1. How did AddVenture help startups?
Business model
After 3 months, none of the companies made the same project as it “sold” to us at the time of selection. All startups have more or less radically changed their business models. And this is a normal, moreover, the only scenario that is correct for the sowing stage. At the beginning of the journey it is still easy to change the course without consequences for the business (the ship did not pick up speed and just left the port). And it's silly not to change it, if during weekly dinners you are given advice by the tops of Russian IT companies, like Felix Muchnik from SoftKey, or investors, like Andres Susi from the Martinson Trigon fund.
Network of experts and investors
AddVenture attracts many experienced experts with a deep knowledge of innovative business to consult startups - A. Dvornikova (President of the Russian Professional Association of Silicon Valley AmBAR), N. Mityushin (ABRT), serial entrepreneurs - A. Sergeev (DataMash, Sundera, Epsylon, etc. ), R. Mandrik (Ksan, TV-Click, ArtyTalk), etc.
So, in November, during a trip to Silicon Valley, our start-ups visited the office of Slide, a new startup Max Levchin, and talked with him, which was especially useful for the project toolwi.com, a widget platform that could run into Slide in the long run.
And with Gaius Kawasaki (partner of the Garage Ventures Foundation, author of popular books on entrepreneurship, for example, “The Art of Beginning”), our start-ups talked twice - were able to “beat” him during the Silicon Valley Open Doors conference, and then discussed the trends of the Internet and venture investments in Moscow during his visit to the Innovation Convention.
The benefits of such communication is huge. Having built their business, and often not one, experts see the whole picture of the industry, global trends, can present a startup to potential partners or simply wish good luck, like Sir Richard Branson.
Launch
The difference between a project with an idea on paper and a project with a ready-made prototype of service from the investor point of view is huge. Creating a beta version allows you to remove the technical risks for the investor, to check the team in action. And getting the first users or customers is important not only because of the cash flow, but also for real field testing of the product.
For software companies, it is especially important to focus on the opinions of real users, rather than on their own guesses and add features to them gradually, rather than trying to develop the final product right away.
All AddVenture projects were able to start in 3 months of work, despite the fact that most of them started from scratch. Thus, the project of the browser game "Superheroes online" made a prototype of the game for the iPhone and the online battle is the most difficult and highly load-bearing part of the game.
Stimulus to dynamic development
Slow development is the most dangerous signal for an investor, it means that either the team does not know how to overcome difficulties, or is not focused on doing business, but has a different motivation (lifestyle, building a personal brand, research).
Development is necessary because competitors do not sleep. So, the project kinokrug.ru - a closed online community of film professionals with a set of useful services for the work, faced with the web project of industry insider Fedor Bondarchuk. From the side it may seem that to compete with such a well-known player with connections and large financial resources is useless.
Colleagues from the gaming startup supported KinoKrug in our internal mailing list - “Not scary even once,” because the Bondarchuk project has overlapping, but not coinciding, target audience and because it was not then launched into open access. The decision of KinoKrug Circle was to continue to recruit professional audiences through film festivals, guilds and communities, without lowering the quality bar (it is easy to recruit 9 thousand film students through the VKontakte site, it will be difficult to keep the already established professionals on the site, if this happens) and create services focusing on the solution of working tasks of cinematographers (assessment of the prospects of a film project, etc.)
2. Crisis for startups and investors
Staff
“The crisis has greatly improved the labor market,” says the Wi2Geo team. "Projects like us have a chance to invite the highest level of development team."
Another startup AddVenture was founded by a team of a large Russian media company. When they left the company, colleagues twisted fingers at temples; but after reduction in it ok. 200 lazy programmers only did not knock on ICQ or did not write to former colleagues about the opportunity to join the team and their willingness to help with certain tasks, even for free.
Those. in terms of the most valuable resource of a startup - employees, the crisis, of course, helps.
We play monetization
The crisis forced startups to take off rose-colored glasses and, according to Roman Mandrik, “start playing monetization, not capitalization.” Indeed, it has become pointless to inflate the company's valuation in the hope of acquiring a company as a strategist or a round of investments on favorable terms. The main task is to generate cash flow.
The startups AddVenture quickly reoriented. So, toolwi.com is now also developing widgets for corporate clients. Relatively large contracts in this area finance the creation of a widget platform for bloggers.
Results of AddVenture I
The main task of AddVenture is completed - we have helped to overcome the “Death Valley” - a period of development of a startup in which venture capital investments are not yet available, because the product is not tested by the market, the team did not work out, there are no sales, the cash flow is negative and the risks are too great for the funds.
Providing resources for startups for 3 months - contacts of investors, experts and first clients, assistance in team building, business development, and not a printer, cooler and accountants of most Russian incubators, we laid the foundations for a future successful business.
On November 15, at the end of the program, Investor Day was held - a presentation of startups to venture funds, angels, and the press. About 100 participants evaluated the project progress (video presentations are available on the AddVenture blog - addventure.to/blog ).
The main result of the program is the attraction during the crisis of the next round of investment in two projects. The media startup attracted a large angel round of investment from a pool of business angels. And the startup Wi2Geo, founded in summer 2008, attracted an A-round of investments from the Russian venture capital fund. Based on hybrid positioning technology, the company provides location-based services (LBS) to users.
The AddVenture model has confirmed its performance and since March the foundation has launched a new program.
Angel Investor Magazine,
Masolova Elena
In August 2008, the AddVenture Foundation selected six IT startups, into which they invested $ 20–50 thousand each. We were looking for teams of "superheroes" - goal-oriented people with a deep understanding of the market, because the only certainty in startups is that "everything will go wrong." It is known for certain that a business plan will become obsolete before the ink dries. So, you need to be able to adapt and play outside your comfort zone, to be able to quickly find solutions.
So, the first tranche is transferred to the account of the newly created company. Here, the work of most investors, if it does not stop, then becomes much less intensive, but at this moment the most interesting things began.
1. How did AddVenture help startups?
Business model
After 3 months, none of the companies made the same project as it “sold” to us at the time of selection. All startups have more or less radically changed their business models. And this is a normal, moreover, the only scenario that is correct for the sowing stage. At the beginning of the journey it is still easy to change the course without consequences for the business (the ship did not pick up speed and just left the port). And it's silly not to change it, if during weekly dinners you are given advice by the tops of Russian IT companies, like Felix Muchnik from SoftKey, or investors, like Andres Susi from the Martinson Trigon fund.
Network of experts and investors
AddVenture attracts many experienced experts with a deep knowledge of innovative business to consult startups - A. Dvornikova (President of the Russian Professional Association of Silicon Valley AmBAR), N. Mityushin (ABRT), serial entrepreneurs - A. Sergeev (DataMash, Sundera, Epsylon, etc. ), R. Mandrik (Ksan, TV-Click, ArtyTalk), etc.
So, in November, during a trip to Silicon Valley, our start-ups visited the office of Slide, a new startup Max Levchin, and talked with him, which was especially useful for the project toolwi.com, a widget platform that could run into Slide in the long run.
And with Gaius Kawasaki (partner of the Garage Ventures Foundation, author of popular books on entrepreneurship, for example, “The Art of Beginning”), our start-ups talked twice - were able to “beat” him during the Silicon Valley Open Doors conference, and then discussed the trends of the Internet and venture investments in Moscow during his visit to the Innovation Convention.
The benefits of such communication is huge. Having built their business, and often not one, experts see the whole picture of the industry, global trends, can present a startup to potential partners or simply wish good luck, like Sir Richard Branson.
Launch
The difference between a project with an idea on paper and a project with a ready-made prototype of service from the investor point of view is huge. Creating a beta version allows you to remove the technical risks for the investor, to check the team in action. And getting the first users or customers is important not only because of the cash flow, but also for real field testing of the product.
For software companies, it is especially important to focus on the opinions of real users, rather than on their own guesses and add features to them gradually, rather than trying to develop the final product right away.
All AddVenture projects were able to start in 3 months of work, despite the fact that most of them started from scratch. Thus, the project of the browser game "Superheroes online" made a prototype of the game for the iPhone and the online battle is the most difficult and highly load-bearing part of the game.
Stimulus to dynamic development
Slow development is the most dangerous signal for an investor, it means that either the team does not know how to overcome difficulties, or is not focused on doing business, but has a different motivation (lifestyle, building a personal brand, research).
Development is necessary because competitors do not sleep. So, the project kinokrug.ru - a closed online community of film professionals with a set of useful services for the work, faced with the web project of industry insider Fedor Bondarchuk. From the side it may seem that to compete with such a well-known player with connections and large financial resources is useless.
Colleagues from the gaming startup supported KinoKrug in our internal mailing list - “Not scary even once,” because the Bondarchuk project has overlapping, but not coinciding, target audience and because it was not then launched into open access. The decision of KinoKrug Circle was to continue to recruit professional audiences through film festivals, guilds and communities, without lowering the quality bar (it is easy to recruit 9 thousand film students through the VKontakte site, it will be difficult to keep the already established professionals on the site, if this happens) and create services focusing on the solution of working tasks of cinematographers (assessment of the prospects of a film project, etc.)
2. Crisis for startups and investors
Staff
“The crisis has greatly improved the labor market,” says the Wi2Geo team. "Projects like us have a chance to invite the highest level of development team."
Another startup AddVenture was founded by a team of a large Russian media company. When they left the company, colleagues twisted fingers at temples; but after reduction in it ok. 200 lazy programmers only did not knock on ICQ or did not write to former colleagues about the opportunity to join the team and their willingness to help with certain tasks, even for free.
Those. in terms of the most valuable resource of a startup - employees, the crisis, of course, helps.
We play monetization
The crisis forced startups to take off rose-colored glasses and, according to Roman Mandrik, “start playing monetization, not capitalization.” Indeed, it has become pointless to inflate the company's valuation in the hope of acquiring a company as a strategist or a round of investments on favorable terms. The main task is to generate cash flow.
The startups AddVenture quickly reoriented. So, toolwi.com is now also developing widgets for corporate clients. Relatively large contracts in this area finance the creation of a widget platform for bloggers.
Results of AddVenture I
The main task of AddVenture is completed - we have helped to overcome the “Death Valley” - a period of development of a startup in which venture capital investments are not yet available, because the product is not tested by the market, the team did not work out, there are no sales, the cash flow is negative and the risks are too great for the funds.
Providing resources for startups for 3 months - contacts of investors, experts and first clients, assistance in team building, business development, and not a printer, cooler and accountants of most Russian incubators, we laid the foundations for a future successful business.
On November 15, at the end of the program, Investor Day was held - a presentation of startups to venture funds, angels, and the press. About 100 participants evaluated the project progress (video presentations are available on the AddVenture blog - addventure.to/blog ).
The main result of the program is the attraction during the crisis of the next round of investment in two projects. The media startup attracted a large angel round of investment from a pool of business angels. And the startup Wi2Geo, founded in summer 2008, attracted an A-round of investments from the Russian venture capital fund. Based on hybrid positioning technology, the company provides location-based services (LBS) to users.
The AddVenture model has confirmed its performance and since March the foundation has launched a new program.
Angel Investor Magazine,
Masolova Elena
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Source: https://habr.com/ru/post/51264/
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