Today, many people are interested in investment. The choice of where to invest in can be more obvious if one consider solid and successful company, but when it comes to venture capital investing, how to you choose the right start-up without making a mistake? That’s the kind of question most beginners ask. And that’s what we asked Ruslan Tymofieiev (Ruslan Tymofeev), the founder of the Ukrainian venture capital fund Adventures Lab.
Why Tymofieiev? At young age, he created a successful CPA partner network Everad. Later, Tymofieiev sold his share in the company, founded a venture fund, and succeeded in a new sphere.
Today, the Adventures Lab’s portfolio is full of stars such as Reface, SALO, EduDo, and StreamHero.
Ruslan Tymofieiev himself admits having always been interested in investment. But when it comes to real money, mistakes are inevitable. Tymofieiev’s first investment in one of the Kyiv Uber analogues costed him about $100,000.
Maybe, it was the wrong allocation of resources, but Ruslan Tymofeev thinks differently.
“I was naive and inexperienced. Who else would invest in absolutely unfamiliar spheres without knowing how to evaluate the market, competition and business capacities properly. Therefore, it is better for novice investors to learn from others’ mistakes and to study well the experience of more senior colleagues,” Ruslan Tymofieiev (Ruslan Timofeev) advises.
Failure with taxi service was not the last one for the investor. Emotion prevailed over reason and rationality for a while.
“Now, the intuition keeps telling me where to invest my money. However, a final decision is impossible without a deep analysis. Of the hundreds of startups coming to Adventures Lab, only one or two get the funding,” Tymofieiev says.
External aspects are those the Adventures Lab team is looking at first. The main criteria are the scale of the market and the level of competition in a particular niche. Since these very factors determine the share which a startup can claim?
“Sometimes we have to reject great projects with the analysis showing that the market will not allow the founders to reach a net profit of more than $30,000. The overheated market imposes its own limitations that preventing even the most successful project from taking off,” Ruslan Tymofieiev says.
It is only after careful consideration of the external environment that the founder of the Adventures Lab moves to internal performance. The investor believes this approach to distinguish his fund in some ways from others.
The main issue in evaluating the startup team is the competence of its founders. However, they cannot be irreplaceable, Tymofieiev believes. After all, the need to change a manager (which can happen to anyone, including Reface) should not have a negative impact on the project.
One should always have in mind someone ready to “take the reins”, be it a person from outside or an employee of the company who has made the necessary career journey.
Tymofieiev considers communication skills along with the network of contacts to be no less important feature of any CEO. Since networking is not just about people, it’s about experience and knowledge, too.
The Adventures Lab tries to keep up with the times. The foundation actively invests in trend spheres such as the Internet of Things, Artificial Intelligence, and Mobile. But trends are not the company’s key interest.
“We are primarily interested in areas where we have some expertise. Moreover, the experience shows that even in the most banal niches there may be true revolutionaries able to offer something new and interesting,” Adventures Lab’s founder Ruslan Tymofieiev (Ruslan Tymofeev) says.