South Central Ventures is one of the most active regional investor funds that helps ambitious startups from the Balkans build the next big thing.
Their fund of € 40 million is primarily dedicated to early stage and growth investments of up to € 3 million per company.
They have some really strong startups in their portfolio and with offices in Zagreb, Belgrade and Skopje they are a regional powerhouse.
We’re delighted that they’re helping the Balkan startup ecosystem to grow and develop and honored that they’re coming to Podim as a Golden Unicorn!
In this interview we talked with Jure Mikuž and Tatjana Zabasu Mikuž, two of the fund’s managing partners and got some really interesting insights.
For our readers who haven’t heard of South Central Ventures before – what’s the one thing people should know about SCV?
We are passionate about finding and supporting teams that will shape the future of the world we live in. It’s our mission to give them not only funding but use our experience and network to help them succeed globally. Not all become unicorns, but there’s no reason some wouldn’t get to this level. And we want to be a part of that.
You’ve got some great startups in your portfolio – like Daibau and AdScanner, which is also the winner of Podim Challenge 2019. What do you look for in a startup as you evaluate it for a potential investment?
Of course we look at the problem and market need they are tackling, analyze the product and how well it addresses the need, but I’d say the most important factors are the ones related to the team – their domain knowledge, the way they approach the challenge, how well they work together, what skills they have and what they lack, how good they are in getting the market feedback and how resourceful they are… We try to get the full picture and to some extent assess how the team can develop. We are looking for startups with a vision, ambition and drive to make things happen. And while we look for people with stamina and persistence, we also understand it is very important to be agile and respond to market feedback, and we try to understand whether a certain startup has the right mix of both. All in all, it is quite a comprehensive set of things we evaluate.
Is there something that especially excites you when looking at a promising startup?
In-depth domain knowledge combined with understanding of the market need (or opportunity) and vision.
How long are you usually evaluating a startup before making an investment?
This varies quite a bit, but almost surely a few months. It depends on how well a company is prepared, how much information they share and how responsive they are. If we know the company before they look for an investment and follow their progress, we’ll likely take less time and can move faster. In my experience negotiating the terms and final investment documents takes the most time.
Are there technologies or industries that you prioritize?
We are a generalist fund, so we are sector agnostic. We do, however, look for opportunities in less capital intensive industries, which is also related to the size of the fund. Many of our portfolio companies are involved in digitizing traditional industries and are changing the way things are done in agriculture, real estate for example, but also enable new ways of creating and accessing digital content.
What would you say is more important – a startup’s idea or its founder’s persona? Why?
We often hear that ideas are cheap, and it is for a reason. You can’t do much without one, but it is much more important how you execute. Many people have great ideas, but few succeed in transforming a good idea into a great business. So a lot depends on the founder’s persona, or better, on the founder’s ability to bring the right people to the mix. There’s not much chance one could pull it off alone, so it matters who is there to help build a successful business.
Besides providing capital, what additional support do you offer as an investment fund?
As I said before, we strive to use our experience and network to help companies succeed. By network I mean access to other investors, to potential clients, to the talent pool and definitely other companies in our portfolio. We are especially proud of inducing the cooperation and exchange of experience within our portfolio and also received very good feedback from the founders in this respect. In addition, we regularly organize smaller events for our portfolio with speakers from various areas of interest to our companies – be it challenges in scaling the organization, or promoting and marketing your products, or building an efficient sales team – a number of topics that our speakers have experience with.
We actively help our companies with further fundraising, often have a role of a “sounding board” for various ideas, plus we offer some operational support in say finance or finding the right legal advice and alike.
The world has been through a lot during the last year because of Covid-19. Have you learned any interesting or perhaps unexpected lessons during this time?
For quite a few of our portfolio companies the pandemic was in fact a booster for their growth. As I mentioned, many offer products that digitize and change some traditional industries, which often means slower adoption in the market that one would want. However, the situation in this past year has forced many traditional businesses to speed up their transformation and change over night, and this was of course a new opportunity for providers of products and tools that support such change. So I guess this just confirms that every “disaster” and every bad thing can also be an opportunity.
What’s the best advice you can offer to startups attending Podim?
Seize the opportunity… to network, get on the map of relevant people and connect to other startups and learn from everyone.