How would you feel living in a region where being an entrepreneur marks you as an outcast for trying to do something good? Where failure brings about stigma you can hardly get rid of? Where finding investors means giving up half of your company? Unfortunately, that is the reality you are facing every day as an entrepreneur in Balkans. At the same times, once you have launched your service/product and your business you can hardly manage to do everything on your own. All this brought us to thinking that entrepreneurs and investors need to have an open dialogue about the situation in the region and how to improve it. These are the premises on which the first Regional Capital Market Conference in Belgrade was launched. As collaboration in the region is in the early stages of development the main idea was to give entrepreneurs an opportunity and “safe space” to network, discuss “pain-points” and how to solve them, leveraging from practices of peers, experts and mentors throughout the Balkans, EU and USA. This way we contribute to growing the entrepreneurial ecosystem in our region.The plot thickens
Once we knew what we wanted to do it was time to define how to do it. We decided on a 2-day agenda which provided us with more than enough opportunities to do what we intended. The main goal of the conference was to connect business practitioners to move beyond the pioneer and investment gaps. So, day 1 focused just on that: creating all the conditions for entrepreneurs, mentors, potential investors and partners to build and mutually strengthen trust. We saw this as a prerequisite of collaboration, partnership building and capital raise, also referred to as “smart money” these days. While the hypothesis of this event was developed through our experience with the 70 entrepreneurs and enterprises we have been working with in our acceleration and pre-acceleration programs, teams from Serbia, neighboring countries and wider seemed to relate to these same premises. So the point of the event was to offer all interested entrepreneurs from the Balkans an“open-marketplace” where to learn, negotiate, build rapport, leverage on the momentum and take home a lot of leads from the region, the EU and the US to do follow-on with. Yes, a lot of hustling…
It all began with filling the application form and accessing the SCHED interactive agenda that gave us an opportunity to tailor your experience to your needs. On day 1 we connected entrepreneurs, mentors and investors as groups to set basic expectations and facilitated a space for them to share their views on how to develop the market. It served as an intro to main part of the day which was all about 1 on 1 meetings. Knowing that relations between entrepreneurs, mentors and potential investors are often asymmetrical, we knew we had to work on facilitating “horizontal” communication. And the Impact Hub as an open space balancing common/shared and more private spaces did wonders in promoting different types of conversations happening at the same time! Meetings were pre-arranged based on visitors needs and provided a challenging and intense period where you could present your ideas, enterprises and ask for help or investments. Having such an intimate setting helped people feel more relaxed and secure enough to put on the tables their challenges. It also helped create connections between entrepreneurs and mentors/investors that we further boosted providing additional facilitated matches.
While day 1 focused on tightening the connections between the primary actors of the marketplace, day 2 provided more in-depth know-how on priority issues such as: how to target ideal investors; how to build more aware and responsible consumers through online communities; how to build a successful team avoiding heavy operations; how to access VCs without depreciating your company and so on. It was amazing to have a concentration of business practitioners, community builders, coaches, investors from Canada, the US (California and New York), the Netherlands, Austria, Croatia, Switzerland.
A great conference experience really depends on the atmosphere of the crowd and ours was bursting with good vibes and excitement, trying to capture the most of the content delivered. People engaged and asked questions all the time and made an open and relaxed atmosphere. The concept was quite simple really — have speakers delivering sessions from their area of expertise on the main stage and run networking in the background. We covered a wide area of topics so you could choose what to listen to and when to network. You can find out more on how it all went by checking my notes from the conference. It focuses on things I considered to be really important and useful but is just a part of everything that went on.
- Are all mentees worth your time? When you are not appreciated and feel like you are wasting your time it might be time to change something or move on
- Best relations come from unplanned moments — someone, somewhere heard of your idea and wanted to help
- Every startup needs a mentor as they serve as support and provide an external look
- Push entrepreneurs to make the first steps — cold calls, emails, pushing their ideas/products
- Set clear rules both sides need to follow and respect. If necessary sign a contract to make it transparent
- Some companies might require more than one mentor so also pay attention to working with other mentors to align direction
- Before anything else be aware that all investors do due diligence so prepare for all areas they will look into (business understanding, your team, scalability etc.)
- Get investors to understand long term benefits and showcase success stories from the region to attract more capital
- Start lobbying — legal framework in the region is not investor friendly and won’t be changed overnight but you need to start from something
- Don?t deal with investors who are too greedy — requiring 49/50% equity for an investment is a serious red flag
- Explore and leverage new, innovative models of investments
- Learn how to leverage your networks — connect to people you need and find a way to present your idea as something they want and need to get involved with
- Use your peers for quick and available help — asking for help is hard but there will always be people willing to give it who have gone through similar experience as you
- Learn how to work with your mentors and value their inputs and experience. Having a good mentor you are comfortable working with might make a difference between success or failure.
- Content marketing works — ask people what they need/want and present yourself as that ideal solution
- Find and leverage local resources that people trust and feel comfortable with
- Define your market — Who is your market? Where are they going? What can you use that you already have, maybe only in that place?
- Work with your community to define your products — ensure your product fit
Women are not taken seriously as entrepreneurs even though:
- Women business tend to be more successful
- They are lower risk investment
- They are winning the race for crowdfunding
- Women tend to receive less capital but women that have access to capital will most likely invest in women owned business
- Showcase success stories and empower others to start something of their own
- There needs to be a balance between innovation and “just making money”
- In order to become more relevant we need to find and focus on social enterprises which are globally scalable
- Democratization of investments — innovative models of investments are emerging and different co-op investment platforms which provide access to capital and are helping the market grow
Throughout the whole day the main issue we were dealing with is how to bridge “the gap” between pre-seed/seed investments and 150k and more round investments. We came up with several solutions on how to tackle the issue:
- Do not just look for any investor. Look for investors who are the right fit for you and your business as they are more than just a money-source.
- Focus on your team. Ideas and business models are great but what really makes a startup make it is people who are behind it.
- Use emerging co-investment and crowdfunding platforms.
- Bootstrap and sell, sell, sell and sell some more. If you are capable of selling your product/service and can provide proof of stable business model getting investments will be much easier.
- Prove your business model — you need to show investors your model works and is generating revenue
Finding investments will never be easy no matter where you are so if you want to succeed in it — HUSTLE!
“Being an entrepreneur is great and you do great things, but you never talk to customers!”
- Out of 100 plans only 7 on average get funded
- Average investments per company and per business angel networks are steadily growing
- Angel investment market size is more than EUR 6 billion in Europe
- 90% of business angels invest in their countries only
- 40% of investments are early stage investments. It is a huge drop from 57% the year before and proves that investors are maturing with the companies
“If you are only looking to get money, in 3 months you will be asking yourself: Why did I take it?”
Learn how to leverage angel investor networks→ find BAs who have access to your market, your distribution channels, your potential partners
Monetization- BAs look for ROI- have clear ways of making money from your business
Support is always more important than money.
25k→ 2nd round→ sales→ profit
- Government funding
- Micro loans
- Friends and family
Always put sales first! If you are not selling you are not going to succeed.Michael Gassner
Vision, value proposition, intention, revenue model (what is gonna pay)
“If you are starting a business, you should already have a vision!”
Portfolio, USP, Sales projection, pricing and calculation
Customer groups, channels, competition, team
How will we reach out to our target group? Ok, we have them but how are we going to talk with them?
What does it take step by step to do what I plan to do? Sales,marketing, processes, milestones
in the terms of resources — investments, expenses, economics, structure
“First you have to understand your business and then you are able to do all the rest!”
During the conference we were talking to all groups present and managed to deduce several important issues entrepreneurs in the region are facing right now.
What first comes to mind is practical skills. Running a business means you need to know everything about it (at least in the beginning) and people here are falling behind in this practical part. Educating people on how to deal with basics of operating an enterprise is the first step in growing our startup community.
What follows next is presentation skills. Being able to present and sell your products/services is a must if you want to be thriving. This includes not only selling your products/services but also your ideas to investors. Knowing how to approach and engage them takes time and practice and unfortunately most people here have zero experience doing it.
Next point we want to address is marketing, mainly digital marketing. It is not enough to “just be present” online, you need to use your channels in a smart manner which will guide people to what you want them to do. Basic understanding of digital media is a must as it is the beginning of every engagement you will have with your potential customers.
Focus is something we always talk about but do not really understand. Defining and sticking to your focuses is an issue a lot of entrepreneurs are struggling with. We all want to achieve everything at the same time but doing that is quite impossible so focusing on smaller tasks at hand is a huge help.
Lastly, it all comes down to finances. Whether it’s about finding funds, developing financial models or even simple accounting finances prove to be the biggest bottleneck in the region. What is even more worrying is the lack of basic understanding of finances and why tracking them is the best input on your enterprise health.
Being an entrepreneur in our region is hard, and finding investments is even harder. People are awkward when talking about money but if you want to succeed as a startup you need it. When you are just starting, you are desperate for money, you know it and the investors know it. There is nothing to hide so just be yourself and present your idea and your team in the best way possible. We tried to make it as relaxing as it could be and we really did manage to get people talking. Those conversations will be the beginning of a change. A change in our region, a change in someone’s view on business or something else entirely. You may know where you need to go but we often forget where to start. For us it was these conversations. Good luck with your start.