Stephane Gantchev is Partner at LAUNCHub, a 9M Seed Venture Capital Fund, based in Sofia, Bulgaria supporting the most promising entrepreneurs and digital startups in the South Eastern Europe. With 40+ investments over the last 2 years LAUNCHub is one of the most active early stage funds in that region. Prior to Launchub, Stephane started his career in France, initially in the largest IT service provider company Atos Origin, moving later to Orange (France Telecom) where he was heading the Innovation program for Orange France Mobile entity, discovering and trialing start-up in the mobile/telecom space. Stephane has been very active in the Bulgarian startup and entrepreneur ecosystem contributing to its growth, involved and co-founded/co-organized various events, among them the local chapter of SiliconDrinkabout. More recently he co-organized DigitalK 2014, one of the largest digital conferences in the region
What is it that you’re looking for when funding startups?
At LaunchHub we invest in the pre-seed and seed stages, so companies that are in the very early phases of their development. What matters to us at this stage are the founders. Of course we require an initial version of the product/service, trial or sales reports with early customers, but what’s more important to us in this phase is what we think about the founders: how successful they are (previous startups, businesses), how knowledgeable they in the space they are in, how connected to the industry, etc. It is very important to have a rounded team. We always invest in teams, never in a single founder, with complementary skills and areas of competence for each co-founder. In our region (south-eastern Europe), except maybe in Greece, the majority of the teams are formed by talented engineers, but sometimes they lack the business/sales aspect, so a team with such co-founder has an advantage.
What advice can you give to new entrepreneurs who are just starting out and preparing to approach investors?
Do your homework. Spend time investigating who is the right investor for you depending on the industry, geography and startup stage/progress. Learn if the investor you are talking to is actively investing in companies right now or is in a ‘zombie’ or other transit stage (raising a new fund, not having enough cash left in the current fund, which means they’re investing very carefully or keeping the money for the existing portfolio). Learn who are the ‘cool’ VCs that you can approach, what is the best moment and way to talk to each one of them (networking event, twitter, conference, party, etc.) Don’t do cold emailing because this rarely works. Don’t rely on ‘agents’ that promise to introduce you to investors in exchange of money or shares. Find the right people to introduce you to each investor. Don’t cry if you receive a ‘no'; there will be many VCs who will reject you for many reasons. Have in mind that a ‘no’ often means ‘not now’.
How many of the startups you’ve invested in have failed? What did you learn from that?
We are kind of a ‘startup fund’, which means we exist actively after less than 2 years. We also learn and make mistakes. We’ve had a few failed startups, but we account for this and it doesn’t affect the overall performance of the fund a lot. In these situations, we would have already had a very small bet on those team. In all cases, we have a ‘to-avoid-list’, which is the checkbox list we use when we meet new teams. Some of the items on this list include: single founders (potentially people that can’t gather people around them and/or work in a team); accelerator hoppers (teams that already went to 1 or 2 incubation/acceleration programs in Europe without knowing what’s the clear goal/benefit); and professional pitchers (people that go on every possible pitching contest and spend time at events/conference instead of developing their product and talking to customers).