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Essay: Business accelerators and incubators

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Executive Summary

As an entrepreneur candidate and a recently established startup employee, I was always interested in how a startup survives the initial grow, perhaps the most risky phase of a startup’s life cycle. I face with business issues everyday. Unfortunately, we are not working with an accelerator. Since we are a small, in fact a micro company, I work as an accountant, HR manager and the sales manager. We face the lack of mentoring and the financial support everyday. Even though, there are lots of grants and scholarships for startups, especially for those that promote innovative products or services, the selection process is quite difficult than the one in accelerators, in my experience.

Over the past decades a wide variety of incubation mechanisms have been introduced by policy makers, private investors, corporates, universities, research institutes etc. to support and accelerate the creation of successful entrepreneurial companies (Pauwels et al., 2014). The subject I want to discuss is relatively different from the incubation mechanisms. Most common names for this mechanisms are startup accelerators or seed accelerators. A relatively new incubation model, seed accelerators, emerged out mid 2000-s as a response to the shortcomings of previous generation incubation models, which are primarily focused on providing office space and in-house business support services (Bruneel et al., 2012). I wanted to see and learn what key performance indicators for these accelerators are. The accelerator phenomenon has been cited across the globe as a key contributor to the rate of business startup success (Dempwolf, et al., 2016).

While the number of accelerators has been increasing rapidly, the roles and effectiveness of these programs are not very vivid. Nonetheless, local governments and founders of such programs often cite the motivation for their establishment and funding as the desire to transform their local economies through the establishment of a startup technology cluster in their region (Fehder & Hochberg, 2014). In this study, I will provide a review of the research literature on the definition and characteristics of start up accelerators; how they differ from other incubation models; their benefits for the overall startup ecosystem. While accelerators appear to be proliferating quickly, little is known regarding the value of these programs; how to define accelerator programs; the difference between accelerators, incubators, angel investors and co-working environments; and the importance of the various aspects of these programs to the ultimate success of their graduates, the local entrepreneurship ecosystems and the broader economy (Cohen & Hochberg, 2014).

In 2014 I had the chance to work as an intern in one of these Startup Accelerators, called Eleven. Eleven is based in Sofia, Bulgaria. At the end of my dissertation, I will try to explain some of the knowledge I gained from my internship experience in addition to the interview I conducted with Belizar …, business developer of Eleven.

Evolution of Incubators

Words “accelerators” and “incubators” are sometimes used similarly, creating confusion about the differences between the two. Both concepts were created in the US. An incubator can be thought as a beginning office for startups. They support entrepreneurs survive during the most fragile phases of their startups’ life cycle, the start and the growth. Incubators usually accept teams that have just started converting their ideas into a business model. Incubators, on this evolution, usually help these teams to achieve their primary goals by providing co-working space and mentorship. Even though it’s not mandatory, in some rare cases, they also provide seed investments in exchange of equity.

In its generic sense, the term incubator is broadly used for collaborative programmes which help people solve problems associated with launching a startup by providing a variety of organizations and initiatives, which strive to help entrepreneurs in developing business ideas from the start, to commercialization and eventually the launch and independent operation of new business ventures. According to a paper by Almubartaki & Al-Karaghouli & Busler (2010), the business incubation is a term describing business development process that is used to grow successful, and to create sustainable entrepreneurial ventures that will contribute to the economic developments of a healthy economy. The paper notes that successful incubation process is about supportive environment in which new ventures can develop and fulfil their potential growths as well as giving them access to a wide range of business development resources and tailored services. Business incubators play significant roles in seeding and developing new ventures and technology transfer with potential growth in most areas and sectors of the economy (Almubartaki, Al-Karaghouli & Busler, 2010).

Many agree on that the first business incubator was established by Joseph Mancuso in Batavia, New York, in 1959. Since the establishment of first incubators the incubation model has evolved and in 2006 there were approximately seven thousand incubators worldwide (Lewis et al 2001). Incubators typically provide their companies with programs, services and space for different amounts of times based on the company needs and their incubator graduation policies (Carvalho, 2016). The main purpose of a business incubator, is to create a favourable business environment for startup firms to compensate for the lack of financial, knowledge and networking resources they generally have (Commission, 2002). The startup firms in an incubator are in general provided with office space, shared equipment, administrative services and other business related services (bollingtoft, 2012). With changing business needs, the organizational structure, the operational sector and value added elements of business incubators have significantly changed.

Business incubators have proven to be an economic development tool for the communities they serve. According to the European Commission Enterprise Directorate-General’s Final Report on Benchmarking on Business Incubators in February, 2002, business incubators have two main functions:

1. The provision of physical space is central to the incubator model. Standard good practices now exist with regard to the most appropriate configuration of incubator space.

2. The value added of incubator operations lies increasingly in the type and quality of business support services provided to clients and developing this aspect of European incubator operations should be a key priority in the future.

Birth of Accelerators

With the increasing tendency towards technology and the support to SMEs(Small Medium Enterprise), there was a new window of opportunities for investors. With exponentially increasing number of new players joining to the startup ecosystem, venture capitalists needed to find a way to support, fund and invest in those companies.

There is no denial about how small businesses play a massive role in any country’s economy. They have a very large impact on the national GDP and they create countless jobs for people. They are the backbone of a country’s economy. With the technology available at our hands, everyday hundreds of new companies are set up. People are eager to create, to provide for others. Innovative ideas are being turned into businesses everyday. New sectors, new products and new services emerging out of nothing, making people’s life easier and contributing to a nation’s economy. However, there are also ideas that can’t be turned into a business or businesses that have to shut down because of insufficient funds. This is why local enterprise funds, grants, non-profit support groups for SMEs started to grow recently. Whether they are non-profit or not, we cannot deny that this is an excellent way to increase the wellbeing of overall society. One phenomena, called seed accelerators or startup accelerators, aimed at helping startups at the very early stage of their business.

According to the research Accelerating Startups: The Seed Accelerator Phenomenon by Susan G. Cohen and Yael V. Hochberg, published in March 2014, the first accelerator, Y Combinator, was founded by Paul Graham in 2005 in Cambridge, Massachusetts, and soon moved and established itself in Silicon Valley. The research states that in 2007, David Cohen and Brad Feld, two startup investors, set up set up Techstars in Boulder, Colorado, hoping to transform its startup ecosystem through the accelerator model. Since 2005 YC has funded 1,430 companies and almost 3,500 founders and the total market cap of all YC companies is over $85B (Mañalac, 2017). Y Combinator was the first accelerator to provide a small amount of seed investment money in exchange for a minor equity stake in startups participating in a three-month program with networking and advice from experienced entrepreneurs (Kohler, 2016).

Accelerator TechStars Y Combinator

Location Boulder, Boston, New York, Seattle Silicon Valley

Launched 2006 2005

Length of Program 3 months 3 months

Batch Size 9-12 teams 65 teams

Seed Funding per Team $6k -$18k $11K-$20K

Equity Stake Required 6% 2-­‐10%

Acceptance Rate 1% 3%

Table 1. Techstars and Y Combinator Source: Accelerating Success: A Study of Seed Accelerators and their Defining Characteristics by Barrehag, Fornell, Larrson, Mardstrom, Westergard & Wrackefeldt published in 2011.

After the birth of startup accelerator phenomena, the number of existing accelerators rapidly increased. Today, estimates of the number of accelerators range from 300+ to over 2000, spanning six continents (Cohen & Hochberg, 2014). Even though they have some similarity with their ancestors, incubators; the lack of mentoring and financial support in the incubation system makes startups loose money and time, which they could invest in building and improving their business instead of trying to raise funds and find the right way to take certain steps.

Launched in 2007, Seedcamp is considered by many to be the first “Y-Combinator Style” European accelerator (Brunet, Grof, & Izquierdo, The European Accelerator Report 2015, 2015).

Researchers I mentioned above, Susan G. Cohen, Daniel Fehder and Yael V. Hochberg are three of the lead researchers when it comes to the seed accelerators. Together and seperately they have published several papers on accelerator concept. Due to fast increasing numbers, naturally, it attracted the media and researchers. Discussions still go on about how to measure the performance of an accelerator.

Characteristics Of Accelerators

The definition for accelerators is continuously evolving. The change in the industry and the fast-paced evolution makes it quite difficult to find a stable definition. With the new models emerging, the term accelerator changes, as well. Recent years have seen the emergence of a new institutional form in the entrepreneurial ecosystem: thee seed accelerator (Fehder & Hochberg, 2014). These fixed-term, cohort-based, “boot camps” for startups that offer educational and mentorship programs for startup founders, exposing them to wide variety of mentors, including former entrepreneurs, venture capitalists, angel investors, and corporate executives, and culminate in a public pitch event, or “demo day,” during which the graduating cohort of startup companies pitch their businesses to a large group of potential investors (Fehder & Hochberg, 2014).

“ Certainly, much of this sound familiar. After all, incubators and angel investors, which are more established phenomena, also help and fund nascent firms. Accelerators certainly bear certain similarities to incubators and angel investors. Like the former, accelerators aim to help nascent ventures during the formation stage. We therefore might expect that many of the activities provided by incubators and angels would also be provided by accelerators. But accelerators differ in several ways. Perhaps the most fundamental difference is the limited duration of accelerator programs compared to continuous nature of incubators and angels investments.” (Cohen & Hochberg, 2014).

Before the definition of Fehder and Hochberg (2014), I noticed that most of the definitions were uncertain, or in other words, unofficial. Paul Miller and Kirsten Bound defined accelerators in their discussion paper “Startup Factories” in 2011 as:

• An application process that is open yet highly competitive (Miller & Bound, 2011).

The paper states that the application process usually consists of filling out an online application as the first step. Many of the programs have a very high application rate, the most well known accept less than 1% of the applicants (Miller & Bound, 2011).

• Provision of pre-seed investment, usually in exchange for equity (Miller & Bound, 2011).

The paper indicates that the investment provided by accelerator programmes varies but is usually based on assumption about how much it costs per co-founder to live during the period of the programme and for a short period afterwards. Miller and Bound stated that programmes usually provide a minimum of £10,000 and a maximum of £50,000 investment during the first three months. This can be in the form of a convertible note or an equity investment (Miller & Bound, 2011).

• A focus on small teams not individuals (Miller & Bound, 2011).

• Time-limited support comprising programmed events and intensive mentoring (Miller & Bound, 2011).

Miller and Bound state that accelerator programmes provide support for a set of period of time – usually between three and six months. Furthermore, the paper inidicates that this time frame is partly linked to the decreasing length of time it takes to launch a web startup, but it’s also about creating a high pressure environment that will drive rapid progress.

Frequent direct contact with experienced founders, investors and other relevant professionals is a core aspect of an accelerator programme (Miller & Bound, 2011).

The paper states that it’s essential for an accelerator programme to develop an extensive network of high quality mentors. Attracting high quality mentors requires high quality mentors (Miller & Bound, 2011).

• Startups supported in cohort batches or ‘classes’. (Miller & Bound, 2011)

While many accelerators are generalists across industries, others are vertically-focused(healthcare, energy, digital-media) (Fehder & Hochberg, 2014). The focus of accelerators is to help startups grow. This happens usually through mentorship and educational programme for a fixed period of time. After the programme, startups are prepared for a funding by private or public investors. Basically, in my opinion, accelerators try to do in a few months what would normally a startup aim to do in several years. Accelerators are for-profit organizations, publicly or privately funded. Depending on the accelerator programme, they generally provide a small seed investment in exchange for a small amount of equity.

Table 2 below gives us a summary of the characteristics of both Incubators and Accelerators. As you can see, the accelerators are more eager to include web- or software based startups, who promote innovation in their value proposition, in their portfolio in comparison to incubators, who follow a more tolerating path when it comes to accepting companies. Accelerators follow a distinct elimination process: “firms that do not require significant immediate investment or proof of concept”.

One of primary goals of incubators is to help firms from the local community. Accelerators’ selection process, on the other hand, can include firms within local to regional or nationwide borders.

Typical “boot camp” programme varies from 1 to 6 months in accelerators. As mentioned earlier, during this bootcamp, startups go through intense education, mentorship and consulting practices. After this period, startups have the chance to pitch to investors for further funding.

Another, maybe the most important distinction between accelerators and incubators is the investment to startups in exchange of equity. Table 3 below shows us several accelerators in Europe and their length of programme, investment size (in £) and equity-stake taken in exchange. The equity stake taken is mostly between 3-10%. This is mostly related to the investment size, naturally.

Table 2. Characteristics of incubators and accelerators

Characteri-stics Incubators Accelerators

All kinds, including science-based

Businesses (biotech, medical devices, nanotechnology, clean energy, etc.) and nontechnology; all ages and genders; includes those with previous experience in an industry or sector. Web-based, mobile apps, social networking, gaming, cloud-based, software, etc.; firms that do not require significant immediate investment or proof of concept; primarily youthful, often male technology enthusiasts gamers, and hackers.

Clients

Selection Competitive selection, mostly from the local community. Competitive selection of firms from wide regions or even nationally (or globally).

Process

Terms of 1 to 5 or more years (33 months on average) Generally 1- to 3-month boot camps

Assistance

Offers access to management and other consulting, specialized intellectual property and networks of experienced entrepreneurs; helps businesses mature to self-sustaining or high-growth stage; helps entrepreneurs round out skills, develop a management team, and, often, obtain external financing. “Fast-test” validation of ideas; opportunities to create a functioning beta and find initial customers; linkage of entrepreneurs to business consulting and experienced entrepreneurs in the Web or mobile apps space; assistance in preparing pitches to try to obtain follow-up investment.

Services

Investment Usually does not have funds to invest directly in the company; more frequently than not, does not take equity. Invests $18,000 to $25,000 in teams of co-founders; takes equity in every investee (usually 4 to 8 percent).

Source: Excepts from Atkins, D. 2011. What are the new seed or venture accelerators? (cited in Innovation Accelerators: Defining Characteristics Among Startup Assistance Organizations by Dempwolf, Auer and D’Ippolito published in October, 2014)

Accelerator Location Date Length of Investment Equity Output (# active

created programme size9 stake companies/follow–

taken on funding)

Techstars UK, London 2013 3 months £ 12,500 + 6% 22/~£10,4M

London option

conv. loan

Healthbox UK, London 2012 4 months £50,000 10% 7/undisclosed

Europe

Fintech UK, London 2012 3 months / / 14/undisclosed

Innovation Lab

Bethnal Green UK, London 2011 3 months £ 15,000 6% 34/~£9,3M

Ventures

Climate–KIC Europe 2010 12–18 Max. of / 45/~£46,5M

Europe months £75,500

Microsoft Germany, 2013 4 months / / 16/undisclosed

Ventures Acc. Berlin

Axel Springer Germany 2013 3 months £ 19,900 5% 46~£6M

Plug & Play Berlin

Acc.

ProSiebenSat.1 Germany, 2013 3 months £ 19,900 5% 26/undisclosed

Accelerator Münich/

Berlin

Startupboot– Germany, 2012 3 months £ 11,900 8% 16~£4,9M

camp Berlin Berlin

Le Camping France, Paris 2010 6 months £ 3600 3% 72~£14,8M

TheFamily France, Paris 2013 Indefinite / 3% undisclosed

L’Accélérateur France, Paris 2012 4 months £ 7,900 + 7–10% 49/undisclosed

option for

more

Scientipôle France, Paris 2002 6 months £ 15,900 – / undisclosed

Croissance £ 71,500

Table 3 Accelerators in Europe Source: A look Inside the Accelerators by (Clarysse, Mike, & Van Hove, 2015)

Business Model of an Accelerator

The business model describes how the accelerator is structured to obtain its goals, how it prices its products and services, and how it generates income and, in some cases, profit (Dempwolf, Auer, & D’Ippolito, 2014). Furthermore, Dempwolf et al. states that most of the existing accelerators to date have operated in the software or mobile applications arena, an industry characterized by relatively low capital requirements and short prototyping durations. The accelerator’s revenue assumptions are then built around rapid growth and large-scale markets (Dempwolf, Auer, & D’Ippolito, 2014).

Miller and Bound in their paper “Startup Factories, 2011” state that there are a number of variations, but the core business model of accelerators is simple: investors invest in the accelerator programme which acts as a small fund. Some part of the fund goes on the costs of running the programme while some of the fund is invested into startups that are accepted onto the programme (Miller & Bound, 2011). The paper continues: The accelerator programmes take equity in the startups and hope to make a return on those shares. Some programmes take ordinary shares, others prefer what’s called a ‘convertible note’ which offers a discount on stock should the company raise further funding, others have a clause that makes the investment into a soft loan to be returned if certain conditions are met (Miller & Bound, 2011).

Table 4 below gives us the statistics the main source of revenue of accelerators in Europe in 2016. The European Accelerators Report published in 2016 by (Brunet, Miklos, & Izquierido, European Accelerator Report 2016, 2016) states that the relationship between accelerators and corporations have grown stronger and more numerous. Corporate revenue generated by accelerators came from two main sources in 2016: 23% was a result of corporate partnership, generally in the form of white labeled or jointly run acceleration program created by the accelerator on behalf of the corporation, and 32% came from corporate sponsorship packages sold by accelerators.

Interestingly, (Brunet, Miklos, & Izquierido, European Accelerator Report 2016, 2016) found that the traditional “cash-for-equity” model is becoming rare as accelerators reconsider in their general outlook. The report states that 50.5% of accelerators do not invest cash in startups. Accelerators that do not invest cash generally focus on providing services and resources such as workshops, mentorship, co-working spaces and connections (Brunet, Miklos, & Izquierido, European Accelerator Report 2016, 2016). The report continues: Most likely, the small number of exits -52 reported in 2016- has proven insufficient in funding their operations. Only 6% of accelerators operating in the region reported exits as a main source of revenue (Brunet, Miklos, & Izquierido, European Accelerator Report 2016, 2016).

Table 4. Main source of Revenue of Accelerators

Table 4 Main source of revenue of accelerators in 2016. Source: European Accelerators Report in 2016 available at http://gust.com/accelerator_reports/2016/europe/ (Brunet, Miklos, & Izquierido, European Accelerator Report 2016, 2016)

According to the European Accelerators Report 2016 by (Brunet, Miklos, & Izquierido, European Accelerator Report 2016, 2016), there were total of €47,575,976 investment in 3.701 startups by 193 accelerator programmes. The report states that the United Kingdom had both the highest amount of money invest in startups, €15,566,629 as well as the highest number of startups accelerated, 992 startups. Furthermore, the report indicates that 66.3% of the accelerators in the region claim to be for profit ventures. “Typically for-profit accelerators are funded with private capital from investors aiming to generate long-term profit. This is primarily accomplished by the appreciation of their equity in startups, but also by providing business support services and by offering acceleration as-a-service to large corporations” (Brunet, Miklos, & Izquierido, European Accelerator Report 2016, 2016).

Non-profit accelerators support industries that provide a specific public benefit, such as Healthtech and Edtech (Brunet, Miklos, & Izquierido, European Accelerator Report 2016, 2016).

The strategic focus of an accelerator can be strongly shaped by the types of funders or stakeholders supporting the programme (Clarysse, Mike, & Van Hove, 2015). There are two important elements to the funding of structure of an accelerator: the funding of the accelerator itself and the funding of available to startups (Clarysse, Mike, & Van Hove, 2015). The paper A Look Inside the Accelerators by (Clarysse, Mike, & Van Hove, 2015) found that most programmes received the major part of their working capital from shareholders, such as investors, corporates and public authorities.

The strategic focus concerns the accelerator’s strategic choices regarding industry, sector and geoghrapical focus (Pauwels, Clarysse, Wright, & Van Hove, 2015). The industry and sector focus ranges from being very generic (no vertical focus at all) to very specific (specialized in a specific industry, sector or technology domain) (Pauwels, Clarysse, Wright, & Van Hove, 2015). When it comes the geographical focus, the accelerators choose between being localized or international.

Types of Accelerators

Innovation Accelerators

Innovation accelerators are the main focus of this paper. Innovation accelerators are stand-alone, for-profit ventures that look forward to identifying classes of promising startup companies with fast, high-growth potential, making seed-stage investments in those companies usually in exchange for equity, being part of innovation-acceleration activities with such companies to help them get next-stage funding and cashing out for a profit when these companies are acquired or have successful IPOs (Dempwolf, Auer, & D’Ippolito, 2014). The immediate goal of the accelerator is to help ventures get next-stage funding, but their primary goal in the long-term scenario is to make substantial profit when those companies are acquired or have successful IPOs (Dempwolf, Auer, & D’Ippolito, 2014).

Examples for this type of accelerators are Y-Combinator and Techstars. Its objective is to bridge the equity gap between very early stage projects and investible businesses (Clarysse, Mike, & Van Hove, 2015). Often we see that these accelerators begin to focus on startups that are in later stages of development; they tend to select ventures which already have some proven track record, and in some cases have already pre-seed finance (Clarysse, Mike, & Van Hove, 2015).

Corporate accelerators

“These accelerators engage in provision of seed capital and various combinations of mentoring, technical assistance, networking, and facilities to entrepreneurs, investors, and startup teams to advance certain goals of the corporate or institutional parent. Corporate accelerators grow and manage portfolios of complementary startups to accelerate innovation and gain a competitive advantage.” (Dempwolf, Auer, & D’Ippolito, 2014). They are a promising way for established companies to explore new ideas for their corporate innovation efforts (Kohler, 2016). The corporate accelerator trend extends well beyond high technology and has gained transaction across the globe and across the industries, from healthcare (Bayer), to insurance (Allianz) to entertainment (Disney) to consumer packaged goods (Kohler, 2016). Effective corporate accelerators combine the best of two worlds: the scale and scope of large, established corporations and the entrepreneurial spirit of small startup firms (Kohler, 2016).

One of the main trends in the acceleration world is that the increasing collaboration between accelerators and corporations (Brunet, Miklos, & Izquierido, European Accelerator Report 2016, 2016). There is a growing trend for corporations to outsource their acceleration programs due to the their limited skills in accelerating programs (Brunet, Miklos, & Izquierido, European Accelerator Report 2016, 2016).

The European Accelerators Report in 2016 by (Brunet, Miklos, & Izquierido, European Accelerator Report 2016, 2016) describes the 5 different ways in which corporations can benefit from startup accelerators:

1. Launching a program quickly and cost-effectively: by partnering with accelerators, corporations can quickly enter the acceleration business and adopt best practices developed by accelerators over years of operation.

2. Enhancing deal flow: by accessing the accelerator’s immense marketing power and network.

3. Staying up to date: by having access to an accelerator’s deal flow, they receive insight into the innovation pipeline in their market. Corporations have learned that competitors now often come from the startup world.

4. Building an innovative corporate culture: by placing their corporate executives as mentors in the accelerator or by enabling their own corporate executives to innovate. In the latter case, the new product could be placed into a separate company that is then accelerated by the accelerator.

5. Building a more innovative brand: by aligning with accelerators and their startups which have become symbols of innovation in the eyes of the public.

University Accelerators

University accelerators are educational nonprofits that accelerate the development of student entrepreneurs and innovation at universities throughout the United States (Dempwolf, Auer, & D’Ippolito, 2014). Universities seem to recognize the importance of fostering the local entrepreneurial ecosystem and some of them have decided to launch their own accelerator programs (Carvalho, 2016). University accelerators typically provide seed grants to support students through the early stages of development (Dempwolf, Auer, & D’Ippolito, 2014). Unlike for profit accelerators, university accelerators do not take equity stakes in student-founded companies and they are typically agnostic when it comes to technology focus (Dempwolf, Auer, & D’Ippolito, 2014).

Case Study: Eleven

As I mentioned in my Executive Summary, I had the chance to do an internship there in August-October, 2016. Eleven is one of the major startup accelerators in Europe. It is a seed accelerator based in Sofia, Bulgaria (Eleven Ventures). “Eleven is one of the pioneers in early-stage investments in Eastern Europe, comprising a team of entrepreneurs and investment professionals passionate about the world of technology and innovation. With 150 collective investments of our partners over 5 years, we have gained the unfair advantage of how to transform a startup into a scaleup in a capital efficient way. Eleven started in 2012 with an EUR 12 million acceleration and seed fund, which was fully invested in 115 startups over three years.” (Eleven Ventures).

“We initially invest pre-seed tickets of EUR 100 000 for 10-12%. The fund itself has the ability to follow with up to EUR 200 000 more. Together with the investors in the Founders Fund, comprising some of the most active angel and seed investors in the region, we can fully subscribe funding rounds of EUR 500 000+, thus allowing our portfolio companies to focus on building their business and not waste too much time on fundraising.” (Eleven Ventures)

On-demand support mechanisms provided by Eleven as described in their website:

• Business knowledge and deep industry know-how brought by our mentors and investors.

• Global Network of partners, friends, and like-minded business organizations.

• The #OneOf11 community – our biggest asset and backbone of Eleven. The family, you can always rely on, learn and inspire from.

• One Roof to unite us as a home and become our base camp on the way to the summit.

I had the chance to interview Belizar Marinov, the Business Developer in Eleven. Belizar has been working in Eleven for 4,5 years.

Table 5. Top Vertical Industry Startups Invested by Eleven

Table 6. Business types invested by Eleven

Belizar mentioned that 39% of 116 startups that they have invested in were international. These countries included Serbia(15%), Croatia(7%), Romania (4%) and Slovenia(3%).

Belizar describes Eleven’s 3 pillars based formula as following:

1. Quantitative Investment Approach: We receive more than 1000 applications per annum and invest in about 30-40 startups, effectively 10x more than a standard VC.

2. Community-Driven Peer Network: We engage our 300+ startup founders through peer groups, founder weekends, selection days, ambassador events, etc. The #oneof11 community is one of our biggest strength.

3. Product and Operations Support: Dedicated accelerator and post-accelerator program, design thinking workshops, entrepreneurs in residence. This is the are we could improve most.

Table 7. Eleven’s Investment thesis

Source: Belizar Marinov, Eleven’s Business Developer

Bibliography

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