“At the venture stage, you need to talk to potential users. This is what you need to do before starting a business ”, – Vitaliy Laptenok, Managing Partner of Genesis Investments Investment Fund
Vitaly Laptenok is a managing partner of the Genesis Investments investment fund, established in 2018. This is a project of the Ukrainian IT product company Genesis, which has invested almost $ 10 million in Ukrainian and Eastern European startups.
On the air of the Big Fish Youtube channel, Vitaly spoke about why IT is the only salvation for Ukraine, and how the Genesis startup ecosystem functions.
ABOUT GENESIS MODEL
Genesis is a group of friendly startups with similar owners and a large share of founders and startup teams. We do not have a product as such, our main product is new startups. Each of them is a small project that grows and becomes operationally independent.
Our value lies in the desire to make projects communicate as much as possible, so that there is a “soup” of smart people. Even the fact that the guys just sit in the same office creates value: they exchange thoughts, communicate, they have new ideas.
An investment fund sits right there, they are imbued with the wisdom of the operators and share what is happening in the market. This is Silicon Valley in miniature.
ABOUT THE PROJECT INCUBATOR
We formalized the fund in 2018, although we started investing much earlier. Before that, there were already 2 invested and many internal projects. Now we have about 10-15 of them. Even I do not know about everything: full information is known only to financiers.
We employ 2,000 people, and many of them launch internal startups, and you only learn about it after the fact. We have been moving towards this model for a long time, fostering an entrepreneurial spirit in our employees.
ABOUT THE SELECTION OF PROJECTS
We call ourselves an opportunistic foundation. We do not limit ourselves in spheres, directions, B2B or B2C, geography. Why? Because we can afford it. Traditional funds are limited by a mandate: money is collected for something.
We invest the money that we earned ourselves, therefore we are free to choose a niche. At the same time, we are not operating in all these businesses: the main thing is that the founders themselves understand them.
How are we useful to them? We don’t just “give money and get lost”. We invest not only with money, but also with expertise: we help with marketing, branding, back office, finance, the legal part and try to collect our expertise that can be universally rolled out to different businesses.
ABOUT HORIZON CAPITAL
Five years ago, we needed support. Horizon is the only high-quality large investor among those who invest in IT. They have big checks, they have no competition. This is a very good option, we are glad that we have such a partner. You always want more cache.
ABOUT IT AS A SALVATION FOR UKRAINE
Ukraine has the opportunity to become an IT country. I would say that the choice is like this: either poverty or IT. In bars and restaurants, you can see from their faces that half of the clients are IT specialists.
What else can you do in Ukraine? The agrarian business is a limited story; it does not grow by hundreds of percent. We cannot compete with industry in China or the United States. At the same time, I think that Ukraine is potentially a very, very cool country.
If we manage to maintain the existing level of freedom and add economic growth to it, we will become one of the most successful and comfortable countries in Europe.
ABOUT THE GENESIS ECOSYSTEM
Everything we do is about building an ecosystem. I want cool and honest guys to be able to earn. I don’t like parasitizing on society. The world is so arranged that many dishonest and corrupt people earn big money. We enable cool people to fulfill their ambitions and dreams. So we live in a cooler country.
ABOUT PEOPLE AND INVESTMENT
We are looking at a person’s track record, his expertise. It is important for us that a person does something cool even before business, even if it is, for example, sports success. If he has worked as a Senior Developer all his life and has not done anything else, then how will he conquer the world? After all, his neurons are not tuned to this.
We look at how clear a person’s motives are, how honest he is with us. If he lied – this is a red flag, we will not work with him. He must know the market by heart. If he does not understand who his competitors are, then this is also a firm refusal.
At the venture stage, you need to talk to potential users. This is what you need to do before starting a business. We also pay attention to charisma. If a person can charge us with his idea, then he will be able to inspire the team. In addition, we trust networking: the market is small, everyone knows each other.
We have our own scoring system. It includes a whole set of parameters by which we assess the potential of a business: market, track record, capitalization. It helps to bring many factors into one figure. I make the final decision anyway.
For each project, a document is prepared where the decision is justified. Investors often put themselves above the project, it is important for us to try to look at products objectively, separating our ego from business results as much as possible. Therefore, we have a very high percentage of successful deals.