{"id":11854,"date":"2022-05-09T19:00:44","date_gmt":"2022-05-09T16:00:44","guid":{"rendered":"https:\/\/ucluster.org\/?p=11854"},"modified":"2022-05-10T17:09:09","modified_gmt":"2022-05-10T14:09:09","slug":"investment-trends-where-should-startups-look-for-money","status":"publish","type":"post","link":"https:\/\/ucluster.org\/en\/blog\/2022\/05\/investment-trends-where-should-startups-look-for-money\/","title":{"rendered":"Investment trends: where should startups look for money?"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>Before the war, Ukraine&#8217;s investment attractiveness index increased slightly in 2021. It was estimated at 2.84 points out of 5 possible at that time. In 2020, this figure was 2.4 points. Such small but essential growth has improved the environment for developing the startup ecosystem. It is worth noting that Ukraine&#8217;s investment climate improved due to the sustainable and stable development of the agricultural and IT industries. The present situation differs radically from the recent past. However, the business continues to exist and receive investments. So how should startups attract funding? What trends have emerged in this area?<\/strong><\/p>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" style=\"font-size:28px\">Change of current: what to consider?<\/h2>\n\n\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">According to experts, Western investors are ready to cooperate with Ukrainian startups despite the war. However, hostilities pose significant risks. Unfortunately, in this case, losses on the battlefield can result in losses for the investor. Despite all the charitable and noble intentions, one should bear in mind that investors are also pursuing mercantile interests. Critically important employees in Ukraine pose a significant risk for investors, <a href=\"https:\/\/forbes.ua\/innovations\/venchur-voennogo-chasu-yaki-ukrainskim-startapam-znayti-investitsii-pid-chas-viyni-ta-khto-dae-groshi-01042022-5196\">shares<\/a> Vadim Rogovskiy, a venture partner of Geek Ventures. The entrepreneur notes that the project&#8217;s founders, key developers, and top managers should be located abroad. In this case, the risks to investors are significantly reduced. However, not everyone can leave the country during wartime. Nevertheless, the key creators of the project should move to places the war hasn&#8217;t reached, <a href=\"https:\/\/forbes.ua\/innovations\/venchur-voennogo-chasu-yaki-ukrainskim-startapam-znayti-investitsii-pid-chas-viyni-ta-khto-dae-groshi-01042022-5196\">advises<\/a> Igor Pertsiya, managing partner of the Hypra Foundation. The expert notes that any startup depends entirely on the motivation and energy of the founder; therefore, it is vital for the investor that the founder&#8217;s operation is not being threatened.<\/p>\n\n\n\n<figure class=\"wp-block-embed alignleft is-type-wp-embed is-provider-\u0443\u043a\u0440\u0430\u0457\u043d\u0441\u044c\u043a\u0456-\u043a\u043b\u0430\u0441\u0442\u0435\u0440\u0438 wp-block-embed-\u0443\u043a\u0440\u0430\u0457\u043d\u0441\u044c\u043a\u0456-\u043a\u043b\u0430\u0441\u0442\u0435\u0440\u0438\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"sT0qCNr9SA\"><a href=\"https:\/\/ucluster.org\/en\/blog\/2022\/04\/business-accelerator-feelgoodlabs-how-to-enter-the-us-market\/\">Business accelerator FeelGoodLabs: how to enter the US market?<\/a><\/blockquote><iframe class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;Business accelerator FeelGoodLabs: how to enter the US market?&#8221; &#8212; \u0423\u043a\u0440\u0430\u0457\u043d\u0441\u044c\u043a\u0456 \u043a\u043b\u0430\u0441\u0442\u0435\u0440\u0438\" src=\"https:\/\/ucluster.org\/en\/blog\/2022\/04\/business-accelerator-feelgoodlabs-how-to-enter-the-us-market\/embed\/#?secret=sT0qCNr9SA\" data-secret=\"sT0qCNr9SA\" width=\"600\" height=\"338\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The startup&#8217;s reputation has now become a significant factor. Foreign investors will not work with projects that have recently conducted business with or continue to operate in Russia and Belarus. No money will be invested in startups that have received funding from Russia, an aggressor state. If some of the capital owners of the project are Russian citizens, the startup will not receive the necessary support. In this case, it is easier to buy out the share from the partners who are located in Russia. Resolutely refuse to accept toxic Russian money, both now and in the future.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Virtually nothing has changed in business for those who have actively scaled abroad. Startups developing in the US and European markets are of particular interest.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is also worth noting that many domestic and foreign investors are directing resources to the organization of evacuations, humanitarian aid and refugee support. IT migrants are also provided with free coworking spaces <em>(<\/em><a href=\"https:\/\/ucluster.org\/blog\/2022\/04\/investytsijni-trendy-de-startapu-shukaty-groshi\/\"><em>For more details see the table in Ukrainian<\/em><\/a><em>).<\/em> <strong><em>&#8220;We now invest mostly into helmets, the army and drones<\/em><\/strong>,&#8221; <a href=\"https:\/\/forbes.ua\/innovations\/venchur-voennogo-chasu-yaki-ukrainskim-startapam-znayti-investitsii-pid-chas-viyni-ta-khto-dae-groshi-01042022-5196\">says<\/a> Oleksii Vitchenko, founder of the Digital Future Foundation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, many of our compatriots receive funding to develop their own startups. According to experts, the founders who remained in Ukraine may well receive small infusions. Vadym Rohovskiy recommends that startups reduce their ratings (SAFE Valuation Cap) by at least 20%. Discounts (SAFE Discount Rate) are now equally important. We must not forget that the limited demand caused by the war also impacts the contributors&#8217; decisions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Project profiles also matter; AI remains among the highest priorities. <a href=\"https:\/\/en.wikipedia.org\/wiki\/Web3\">Web3<\/a> is attracting more and more interest among investors. In addition, the focus remains on projects relevant to the war period. Startups related to such areas as military, security and infrastructure rehabilitation will be pertinent for a long time after the war ends. Experts also pay special attention to socially significant projects.<\/p>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" style=\"font-size:28px\">What are the investors doing?<\/h2>\n\n\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">In the first weeks of the war, almost all investment programs in Ukraine were suspended; however, their work began to gradually resume at the end of March. For example, the TA Ventures fund has already recovered and utilizes 70% of its usual capacity. The organization is expected to be fully operational in April.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-embed alignright is-type-wp-embed is-provider-\u0443\u043a\u0440\u0430\u0457\u043d\u0441\u044c\u043a\u0456-\u043a\u043b\u0430\u0441\u0442\u0435\u0440\u0438 wp-block-embed-\u0443\u043a\u0440\u0430\u0457\u043d\u0441\u044c\u043a\u0456-\u043a\u043b\u0430\u0441\u0442\u0435\u0440\u0438\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"mOatUDSBTt\"><a href=\"https:\/\/ucluster.org\/en\/blog\/2021\/11\/legal-nodes-a-personal-lawyer-for-startups-focused-on-the-global-market\/\">Legal Nodes: A personal lawyer for startups focused on the global market<\/a><\/blockquote><iframe class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;Legal Nodes: A personal lawyer for startups focused on the global market&#8221; &#8212; \u0423\u043a\u0440\u0430\u0457\u043d\u0441\u044c\u043a\u0456 \u043a\u043b\u0430\u0441\u0442\u0435\u0440\u0438\" src=\"https:\/\/ucluster.org\/en\/blog\/2021\/11\/legal-nodes-a-personal-lawyer-for-startups-focused-on-the-global-market\/embed\/#?secret=mOatUDSBTt\" data-secret=\"mOatUDSBTt\" width=\"600\" height=\"338\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Relatively young investment funds in Ukraine do not want to slow down. <strong><em>&#8220;We are moving forward and will invest<\/em><\/strong>,&#8221; said Igor Pertsiya, the Hypra Foundation managing partner. In his opinion, startups with founders in Ukraine may well receive small investments of up to $2 million.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">InSoft Partners continued to be active in March. However, the war made some adjustments to the investment strategy of this company. Instead of the controlling stake, InSoft Partners <a href=\"https:\/\/forbes.ua\/innovations\/ugoda-pid-vittya-povitryanoi-trivogi-chomu-insoft-partners-investue-v-ukrainski-it-kompanii-pid-chas-viyni-21032022-4877\">is now<\/a> buying a minority stake. Investment amounts are not disclosed at this time. Previously, InSoft Partners has invested in businesses with an annual volume of $3-15 million.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The principle of operation has not changed. The company buys a share of the startup, develops it and exits at the right moment.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As we <a href=\"https:\/\/ucluster.org\/blog\/2022\/04\/startapy-ta-investytsii-jak-obertatymutjsja-groshi\/\">wrote<\/a> earlier, SID Venture Partners also continues to work on developing innovative IT projects. However, the number of startup wards had to be reduced due to the war. Instead of the previously announced 9 projects, only 5 companies received financial investments.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Representatives of the Adventures Lab <a href=\"https:\/\/dev.ua\/news\/investfond-adventures-lab\">stated<\/a> they would invest in young startups, prioritizing projects affected by the war. $3 million will be allocated to such startups. A $500,000 check will be issued to startups in the early stages. The main conditions are a clear business plan and post-war prospects.<\/p>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Pitching and acceleration: where to find the money?<\/h2>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">Foreign organizations that previously supported Ukrainian startups continue to do so. More and more companies are joining them. Accelerators that had offices in Ukraine have now moved to Warsaw but have not ceased operations. In particular, Demium Ukraine and Startup.Network <a href=\"https:\/\/www.facebook.com\/pg\/DemiumUkraine\/posts\/\">combine<\/a> their efforts to conduct pitching and other specialized events aimed at Ukrainian founders. In addition, Demium plans to launch a fund to support Ukrainian startups that have remained in Ukraine or moved to Poland. In cooperation with the FREE Ukraine Foundation, the Founder Institute Kyiv will also provide grants for startups.<\/p>\n\n\n\n<figure class=\"wp-block-embed alignleft is-type-wp-embed is-provider-\u0443\u043a\u0440\u0430\u0457\u043d\u0441\u044c\u043a\u0456-\u043a\u043b\u0430\u0441\u0442\u0435\u0440\u0438 wp-block-embed-\u0443\u043a\u0440\u0430\u0457\u043d\u0441\u044c\u043a\u0456-\u043a\u043b\u0430\u0441\u0442\u0435\u0440\u0438\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"d1yQUS41cf\"><a href=\"https:\/\/ucluster.org\/en\/blog\/2022\/01\/how-carbominer-converts-harmful-carbon-dioxide-into-valuable-fertilizer-for-plants\/\">How Carbominer converts harmful carbon dioxide into valuable fertilizer for plants<\/a><\/blockquote><iframe class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;How Carbominer converts harmful carbon dioxide into valuable fertilizer for plants&#8221; &#8212; \u0423\u043a\u0440\u0430\u0457\u043d\u0441\u044c\u043a\u0456 \u043a\u043b\u0430\u0441\u0442\u0435\u0440\u0438\" src=\"https:\/\/ucluster.org\/en\/blog\/2022\/01\/how-carbominer-converts-harmful-carbon-dioxide-into-valuable-fertilizer-for-plants\/embed\/#?secret=d1yQUS41cf\" data-secret=\"d1yQUS41cf\" width=\"600\" height=\"338\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">By the end of 2022, Google for Startups plans to finance 50 Ukrainian startups and <a href=\"https:\/\/campus.co\/intl\/uk_ua\/europe\/ukraine-support-fund\/\">has allocated<\/a> $5 million for this purpose. Projects affected by the war, as well as startups whose products are relevant during hostilities, can apply for a grant.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Romanian TechAngels&#8217; initiative could be effective as well. On their <a href=\"https:\/\/techangels.ro\/support-ukraine\/\">page<\/a>, founders can <a href=\"https:\/\/techangels.ro\/#story\">fill out an application<\/a> to seek investment from business angels. The Ukrainian Startup Fund offers a similar system. Their <a href=\"https:\/\/usf.com.ua\/saveuastartup\/\">site<\/a> contains a section where the founders can describe their projects&#8217; urgent needs. The platform also includes applications from philanthropists, which allows for interactions between those who need help and those ready to provide it. In addition, USF and the YEP accelerator have launched a <a href=\"https:\/\/www.aclab.center\/rethink?utm_source=yep&amp;utm_medium=smm&amp;utm_campaign=aclab\">special program<\/a> to support startups in the early stages of development.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">ideasLab has opened a 7Wings rescue fund with a project budget of $50,000, which provides grants for startups. The Connect Poland Prize accelerator is ready to help funders who want to register an IT business in Poland. In addition to informational support, the organization allocates grant funds of up to $70,000. <a href=\"https:\/\/docs.google.com\/forms\/d\/e\/1FAIpQLSeLqa9qyRIpuFIAqEhmAKWE6F0H2ZLICKGfmQLokXN_DzOnMg\/viewform\">The application<\/a> deadline was April 30.<\/p>\n\n\n\n<figure class=\"wp-block-embed alignright is-type-wp-embed is-provider-\u0443\u043a\u0440\u0430\u0457\u043d\u0441\u044c\u043a\u0456-\u043a\u043b\u0430\u0441\u0442\u0435\u0440\u0438 wp-block-embed-\u0443\u043a\u0440\u0430\u0457\u043d\u0441\u044c\u043a\u0456-\u043a\u043b\u0430\u0441\u0442\u0435\u0440\u0438\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"Y1UfBEN5ho\"><a href=\"https:\/\/ucluster.org\/en\/blog\/2022\/02\/how-to-help-ukrainian-refugees-at-medyka-shehyni-border-crossing\/\">How to help Ukrainian refugees at the Medyka, Poland &#8211; Shehyni, Ukraine border crossing<\/a><\/blockquote><iframe class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;How to help Ukrainian refugees at the Medyka, Poland &#8211; Shehyni, Ukraine border crossing&#8221; &#8212; \u0423\u043a\u0440\u0430\u0457\u043d\u0441\u044c\u043a\u0456 \u043a\u043b\u0430\u0441\u0442\u0435\u0440\u0438\" src=\"https:\/\/ucluster.org\/en\/blog\/2022\/02\/how-to-help-ukrainian-refugees-at-medyka-shehyni-border-crossing\/embed\/#?secret=Y1UfBEN5ho\" data-secret=\"Y1UfBEN5ho\" width=\"600\" height=\"338\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Support Ukrainian Startups NOW is an initiative implemented by the FREE Ukraine Foundation and UVCA. Its purpose is to provide information and financial support to the IT business. The amount of one-time investment can reach $3-6,000. In addition, the organizers of the program provide full technical support and share valuable contacts. Startups that have suffered significantly due to hostilities can participate in the grant.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">BraveUa does not provide funding but helps startups find clients abroad. Dmytro Bilash, the co-founder of Captain Growth and Septa, has <a href=\"https:\/\/www.facebook.com\/dmytro.bilash\/posts\/10218499919282751\">initiated<\/a> this project. To receive such support, you must apply through a <a href=\"https:\/\/docs.google.com\/forms\/d\/e\/1FAIpQLSeHEGJkPrz88ZilmXF6l0eiQBX0068dP8Trms8zNLC2FR2G1w\/viewform\">Google form<\/a>. This assistance may be more effective in the long run because the grant is a temporary solution, but a client can become permanent.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Chances and opportunities are there even in the darkest times. It\u2019s important not to give up and continue to look for opportunities. The democratic world actively supports Ukraine&nbsp; and the venture industry is participating in this process as well. So, do not give up and continue your fight for future prosperity!<\/p>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The present situation differs radically from the recent past. However, the business continues to exist and receive investments. So how should startups attract funding? What trends have emerged in this area?<\/p>\n","protected":false},"author":986,"featured_media":11855,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","neve_meta_reading_time":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[19803],"tags":[33],"class_list":["post-11854","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-funding","tag-ukraine"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/ucluster.org\/wp-content\/uploads\/2022\/05\/where-should-startups.png?fit=4269%2C2730&ssl=1","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pgE4Lp-35c","_links":{"self":[{"href":"https:\/\/ucluster.org\/en\/wp-json\/wp\/v2\/posts\/11854","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ucluster.org\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ucluster.org\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ucluster.org\/en\/wp-json\/wp\/v2\/users\/986"}],"replies":[{"embeddable":true,"href":"https:\/\/ucluster.org\/en\/wp-json\/wp\/v2\/comments?post=11854"}],"version-history":[{"count":5,"href":"https:\/\/ucluster.org\/en\/wp-json\/wp\/v2\/posts\/11854\/revisions"}],"predecessor-version":[{"id":11863,"href":"https:\/\/ucluster.org\/en\/wp-json\/wp\/v2\/posts\/11854\/revisions\/11863"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ucluster.org\/en\/wp-json\/wp\/v2\/media\/11855"}],"wp:attachment":[{"href":"https:\/\/ucluster.org\/en\/wp-json\/wp\/v2\/media?parent=11854"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ucluster.org\/en\/wp-json\/wp\/v2\/categories?post=11854"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ucluster.org\/en\/wp-json\/wp\/v2\/tags?post=11854"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}