Tell us a little about your background.
I co-founded NetInfo, the largest and most successful Internet company in Bulgaria back in 1998, and I served as its CEO until 2007. In 2008, Sanoma Magazines International (SMI) acquired the company, making it the largest digital exit in Bulgaria to date.
During this time I went through all the ups and downs of the market. We secured three angel investment rounds from individuals in 1999, 2000, 2001 when the dot com business was at a high. After the completion of the third round we doubled on a yearly basis. In 2006, Tiger Holding, the largest international fund with a focus on technology companies in emerging markets, invested 5 million dollars in the business. Partially through equal equity, partially through buying out as existing shareholders.
My greatest takeaway from the years at NetInfo is that building a team is essential and determines the success of any business. After exiting, things changed and I started sitting on the other side of the table. In 2007, I founded a small investment company. I’ve supported about 10 startups as a private investor so far.
Why and when did you become an investor and how important is the financial return to you?
When Tiger invested in 2006 I used the seeds from the investment to acquire three companies, one of which is still one of the main drivers behind the success of NetInfo. By that time I had gotten the taste of – and appetite for – putting money into nice things with a great potential; into businesses with a great potential, and to provide fresh entrepreneurs with knowledge and expertise. And see what happens. This turned out to be an interesting story. So acquiring these three companies, were my first steps into private investing.
And speaking of financial return, yes, it is of great importance. I’d say it’s one of the most important things, however, for me there’s another very strong driving force – building and being part of something meaningful, just like with my first company. And of course, there’s also this great feeling of having helped aspiring young entrepreneurs in their journey into big businesses.
Tell us about a time you failed. What made you get back on your feet?
Small failures are the key to success. You will fail many times down the road, and it can happen on any given day. You could fail to close a deal, to acquire a client, or deliver a product. Failure is a natural part of success. This is also why I don’t like the word “failure” so much because it’s not failure, it’s a learning process. What teams need to realise is that not succeeding rightaway should not make them give up or feel depressed; it should serve as a learning process instead.
For me, the biggest failure has to do with the failure to manage people. It hurts if you fail to build a team, if you fail to motivate a team, or to evaluate a team member whom you have given trust but they do not deliver. As a leader of a company, it is your job to manage all of the above.
What has changed in the investing scene from your first investment until now?
If I compare the scene from when I started investing in 2005 until today, it has really changed a lot. Because of the development of technology, there is more access to capital and the market is much more open.
I think in the past 15 years – since the beginning of the Internet in Bulgaria – we have had three generations of digital entrepreneurs. I was in the first generation and I appreciate having been among the first ones on the market, however, we didn’t have the chance for a broader vision of the scene, so we focused on doing local business. The second generation came from our companies or from the businesses we had invested in, and started competing with international businesses.
Now we have a third generation. These are young people who think beyond the local framework. They focus on scaling and want to be successful on the global markets. I think these are the guys who are going to make the big difference, and it is very inspiring for me to be part of their journey.
What do you think about the startup scene in Bulgaria and do you think that startups should go abroad if they want success?
The market here is very small, and there is also a gap between the knowledge of business developers, startups and marketing techniques. We help startups to get on their feet but if they want to make it on a global level, they have to connect with experts at different European hubs. This experience will provide them with all the ingredients they need to flourish.
Working with other people
What kind of people do you work best with?
I definitely work best with people who are committed, result-oriented, focused on delivering results and are hungry for success. I want the people I work with to be business partners and not employees. It is not going to work out well if they like to work in the 9-to-5 timeframe.
What do you look for when investing in a company?
Like most investors I look for three things: market, team, and product. While some place the most emphasis on the market, my philosophy is to focus on the team. A well-rounded team is capable of finding a way to be ahead of a small market and enter a larger one. The also need to be focused on execution and have some expertise of being in the field.
How important is the technology when you’re looking at a new investment opportunity?
Technology has the potential to significantly change existing markets, or segments of markets, so I’m definitely looking for startups that utilise technology to bring users’ efficiency to the next level.
What’s common across your investments to date?
I would say the team because I look for people who are are dedicated, result-oriented and ready to work hard for success.
What do you think is the most misunderstood thing about you?
Getting an investor doesn’t equal getting a solution. It’s not my job to deliver solutions on a silver plate to startups. I can give them advice but ultimately, the founder knows best what’s good for their startup.
How do you spend your free time?
I’m an active runner, hiker, and an avid reader. Besides the hobbies, I spend most of my free time with my family. My six-year-old son is the best that’s ever happened to me.
Complete the sentence. Working with you means…
…that you are going to be challenged.
Invitation for startups
Tell us about your last investment – what attracted your attention, and what made you close the deal?
The last investment I made [not yet closed] was in a startup that is trying to build a personal video environment. They have the potential to disrupt the entertainment industry, so with this investment I wanted to raise awareness that there’s a big market that needs to be redefined.
Do you invest in international companies?
Yes, I have invested in the San Francisco-based startup Leanplum. They optimise mobile applications for product managers.
What types of businesses are proving most popular at the moment in Bulgaria?
In my opinion, a lot of people are doing gaming, a lot of people are dealing with mobile applications and we have seen that Bulgaria has a very strong appetite for enterprises and B2B.
Besides providing capital, what else do you do with the companies you back?
I’m their advisor and try to help with my knowledge on consumer behaviour, to get them to network, and find potential funding. I’m good at helping teams overcome obstacles they are facing down the road.
What would you recommend to the people who want to get you onboard?
I need to know that they are passionate about what they’re doing. I also expect very specific characteristics, an approach and a detailed marketing strategy. Teams need to be able to tell me who their customers are, and why they’re doing something for them. I definitely don’t accept statements like: “I’m focusing on mobile users or something like that.” So to sum up, passion and preparation are the most important things.
How can startups get in touch with you?
Well, almost anyone can have access to me. They can get in touch either per e-mail or phone. But because I do meet a lot of people all the time, I would suggest to startups to find contacts in my network that can recommend them. And if someone gets recommended to me, they can be sure I’ll take a different look at them.
Don’t even think of getting in touch if…
…you are not open enough.
Interview by Stefanie Rauchegger.