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“Pitch is a non-issue. The main point is to interest an investor”. Business angel Anton Kulichkin shares his experience and new trends

“Pitch is a non-issue. The main point is to interest an investor”. Business angel Anton Kulichkin shares his experience and new trends

28 Jan 2020

A new service for selling concert tickets, blockchain projects, property investments and business-education are all around Belarus. Irrepressible Anton Kulichkin manages to cope with all these tasks besides angel investing. In the New Year’s interview, he told about the results of 2019 and trends for the next year. He also gave a piece of advice on how to make a deal with any adequate investor.

Startup Jedi

We talk to startups and investors, you get the value.

—Let’s remember the expiring year from your business angel side. What was the most remarkable?

Fanaticka project had a very dynamic start this year, I am its co-founder. It is a peer-to-peer service for selling concert tickets. The project was launched 5 months ago, and now, the revenue is already more than a million dollars. It grows every single day, I don’t even have time to update my presentation.

We are changing the ticket-selling market and we have already involved 4 countries: Ukraine, Russia, Belarus and Poland. In the nearest time, we are going to add the Baltic states to this list. We didn’t manage to get America in time but we are scaling at a good pace. The service can work anywhere, the question is in the connection of paying systems.

At our service, each customer is also a promoter — you can send the link for tickets to your friend and receive bonuses for attracted customers. It’s like in the 90th when grandmothers were selling concert tickets: no service charges and commission fees.

Besides, I am amazed by Belarusian products that are successfully developing on the global market. Flo continues to grow dynamically. I think that in a couple of years it will cost billions.

I like how Hypervsn (Kino-mo LTD) develops. It is a worthy startup and we have to be proud of it. Still, we have a few strong startups but they are not that famous. For example, there is a fintech startup that attracted more than one million dollars and it is still finishing the round. The team consists of experienced bankers with Belarusian background, and they are completely Europe-orientated. I believe in these guys and in this awesome service so I’m helping them a bit.

There is another project — kintsugi Estate, and I work with them pretty closely. It is connected to investments and mass-market. It seems to me that it also has chances to become something big in a couple of years. Rocket DAO with their acceleration program Startup Training Camp is an awesome project with great prospects to grow. In particular, I like the guys from Caer Sidi,, the winners of their first camp. A cool project, I keep tracking them.

I was a jury member on The Day of Investor and surprisingly, there were projects that passed me by. With the help of artificial intelligence, Filmustage creates breakdowns in few seconds, and that makes directors’ life easier (Breakdown is a document that describes all items that are present on each scene and shot including actors, costumes, equipment, stage property, place or interior, transport, animals, special effects, stuntmen and everything else. It is used while calculating the budget and production schedule — Startup Jedi).

Enjoy.ai is an ecosystem for selling pieces of training and products to improve intimate health, it includes a chat-bot assistant with the use of artificial intelligence in the topic of sexual health, voice assistant and online marketplace.

MY PARAMEDIC is an application for tracking and preventing heart attacks thanks to integration with portable smart devices. All three projects are aimed at global markets with technical expertise in Belarus. It is a perfect combination and they will be interesting for AngelsBand.

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—How do you evaluate the growth of the startup ecosystem of Belarus this year?

The ecosystem grows and it is noticeable. TechMinsk started its work again, they brought mentors from GoogleLaunchpad, had been financing and developing startups for 10 weeks and at Demo Day we saw startups at a decent level.

I have one unobvious thought to share: in Belarus, there is more money than worthy startups. Only a few funds can spend the money that they have. We need more entrepreneurs. There are nice technical and experienced teams. But in startups, business history is essential. So it is important to teach founders this particular thing. Alexandr Chekan and people from Bulba ventures were telling this long ago: there is a lack of CEO-entrepreneurs and CEO-managers. And it still isn’t clear what to do with this problem.

Perhaps, the educational team is an answer. In the framework of AngelsBand, we usually organise mentor sessions. I act as a mentor in HTP incubator, I also participate in all possible and impossible events for pupils and students. I teach at Belarusian State University and Belarusian National Technical University. Also, when I’m called upon, I’m going to the regions of Belarus for events to support entrepreneurship.

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—You are extremely active, are you planning to channel this energy into your projects?

Of course, I am. There are two basic projects now, and they are taking more and more of my time. I haven’t been busy with the operational part before, so that’s why I will reduce my public activity in the next year, to be able to concentrate on two projects in which I believe.

One of them is Fanaticka, the second one is related to real estate investments. The second is a world-class project focused on American investors in a classically scalable real estate segment that provides good returns. I have gathered a very strong team. Now we are engaged in real sales. Somewhere we’re super successful, somewhere we have big questions. But the project is about the whole world, we are just located in Belarus. We are in no way connected with it by either clients or real estate, we only bring money into the country and pay taxes.

Click on the image to open Kulichkin's profile on the Rocket DAO platform

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—You also have time to be a member of “The panel of Blockchain Association of Experts”. How was the year on this front?

The market which used blockchain solutions has abated. The foam is blown off. And this is good, I was always on the calm side as the level of the hype was a bit scary.

I hope that we are going to be back on the productivity track soon. We will find the niches where blockchain as a technology is needed, but it is not a placebo or a super recipe of getting rich asap. For example, real estate or stock blockchains.

The market is currently looking for these niches. A part of our association has changed the sphere to developing enterprise-solutions, and there are orders from Belarusian governmental structures. There are also large contracts from abroad but I can’t name all of them.

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—Which projects are going to be interesting for you as an investor in the new year?

I have two rules for these 2 years: either is only about money, or there should be set a viral history, I mean when guys don’t know about monetisation but there is a fantastic customer growth. It happens rarely. For instance, here in Belarus, I can see only one project of this kind — Give Away.

The story with impact-investment is also very close to me. When the return on investment is measured through S-ROI, social return on investment, through contribution to the development of the country. This direction in Belarus is supported by grants and knowledge of the European Union and the UN Office. We, as entrepreneurs, are interested in finding cases so that business won’t not a charity, but will help a lot. Such examples exist both in Europe and in Russia. Belarus is still very small, but the first ones appear here as well.

“Добрае печыва” — these are very tasty hand-made cookies in eco-packaging with delivery on a subscription basis. The project gives working places at the manufacture to people with mental disabilities.

Inclusive Barista helps people in wheelchairs to find their place under the sun by learning a modern and pleasant profession — barista. They have already set the learning process and an eco-friendly inclusive coffee catering is working there.

I hope that there will be more such projects in 2020.

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—Where is heading the global startup-thought? What trends do you see?

There are two centres of startup development. These are obviously the USA and China, which nobody understands. It is a country-mystery, it is interesting but hard to enter, I look at China but it is a completely different and indistinct world.

In both these centres, there is still a lot of money. It is quite easy to be in the Valley, create a fund and do a simple jump into money. Therefore, another bubble continues to inflate, a lot of subjective things, perception errors, interfere in tough business logic.

Talking about unexpected turnovers, there will be a lot of interesting things next year. For instance, IPO Airbnb. It is a brand new model of entering the public market through your own user database. (Airbnb is considering a direct listing by issuing shares for free sale without prior trading with investors — Startup Jedi footnote)

We wait for new turnovers in blockchain projects. The history of relations between Durov and the American regulator will develop, Libra will grow. It is interesting that China is ahead of the whole world in this direction.

There are many countries where the cash is almost outdated. In France, only 2% of the money is banknotes and coins. And their share is less and less. With e-money, it is beneficial for the state to lead and issue state currency on the blockchain. If you control all transactions, you can program anything. This is a dream of any government. I think that within five years we will see the state currency on the blockchain.

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—What was the most remarkable in 2019?

BulbaCon is my number one in making quality content. There is a video that everyone should watch. An unappreciated and very useful content.

Emerge conference was the most useful by the means of network quality. There gather investors and startups from all around the world. It is awesome, motivational, there are many useful contacts which then turn into contracts and partnerships.

I like what guys from probusiness do. Vitaly Volyanyuk prepares good speakers, he does a lot of useful and interesting things. He brought a lot of cool performances, there were several events for the year.

In general, I sympathize with him. And, of course, Imaguru does the large amount of important work. Public servants and premier-minister do not ignore Venture Day, and this is vital to the ecosystem.

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—As an angel, you overview many projects. What piece of advice you can give to startuppers?

Do not try to sell your startup at the first meeting. Create an interest. Present yourself in a way that the investor will make an appointment. Understand that nobody invests in startups for their pitch sessions. The main thing is to enter a dialogue with the investor. Investing is a process.

And to be honest, the pitch is not the main thing in this process. The main thing is to know that your product is awesome. If everything is not alright with you and your product, then in the best-case scenario, you would deceive the investor with your pitch and take his money. And there is no guarantee that this money will be useful for you.

It is necessary not just to seem but to be. To be an awesome product. In this regard, there is a cool expression: “You don’t have to run after investors, investors will send a limousine for a good project.” That’s all about it, you need to show the traction, the amazing team, the vision of the market. These things are spelt out in thousands of textbooks. I advise you to watch and participate in the YCombinator Startup School. You can get an enormous experience for free there.

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—If we have a look at business angels, how should they grow? What piece of advice can you give them?

It is necessary to understand that this is an expensive hobby. It is like in a restaurant or real estate business — the location means everything. Same thing with startups, the team or founder is a key to success. So, there is nothing else at an early stage, just a perfectly coordinated team and founder with the right vision. A startup is a history about the people. The idea can be changed, everything else is less important.

It is necessary that you yourself would want to give yourself money or find the same partners, cofounders, team. Judging a team, I look at who the founder can attract, what is his personal scale.

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—You said that you passed the way “from a fool to an investor”. Tell us briefly, how does it look like?

I started in 2012 when I’ve already made some money. I started with non-IT projects. There, as it is said, we had to bite the dust because the expertise is needed. So it’s like the inventor comes to you, he is more advanced in the subject than you, so you trust many things he says. The inventor’s beliefs are not always correct from a business point of view; he can just sincerely believe.

This happened to the project about prefabricated buildings in the retained formworks. It is quite an interesting technology that allows to build a modern house with the exterior finish in just two days. However, it appeared that such a method requires a careful builder’s attitude. One mistake is enough to demolish the whole building. Of course, with our culture of building, this technology was doomed.

I had an interesting fintech project in Russia. It was connected to the inner market of selling credit requests — some kind of a stock market of bank retail landing. The market had changed a bit, major players, on whom I orientated the project, were gone, so in 2014 I froze the project. It is quite interesting because recently, one Ukrainian team was pitching this idea.

Two and a half years I worked closely with venture investments, startups and blockchain. I happened to appear in “Business Angel Academy, in Imaguru, there were programs of different levels. Now, when I have time, I visit professional events, read or study. I try to make angel activities at least half-professional. At least. That’s because full-time is a hell of a job.

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—Who are professional business angels?

A professional business angel is a person who has sold a company or finished an exit and made at least $10 million. Accordingly, he has to form a portfolio with at least 20 startups. Together with additional costs, this requires $1.5 million. I don’t have this amount of money. And there are only a few people in Belarus who have.

The only business angel with a portfolio that includes more than 20 projects, both business and angels — Kiril Voloshyn. He’s doing this for quite a long time and he is a mentor of 2019. Perhaps, he is the most active business angel in Belarus. I deeply respect him.

In general, for the majority of angels, it is more like a hobby. People like the process, they believe in founders and invest in them.

28 Jan 2020

 

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