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Looking for Slovenian unicorns or what can we learn from SK investment seekers?

/12.10.2015, Author: Stanislava Vabšek

Proven and confirmed! We talked to the startups and jury of the autumn SK Demo Day about how to successfully carry out a demanding and complex process of financing. They confirmed that we more than need financial products, such as SK75 and SK200 for obtaining a 75,000 € or 200,000€ investment from Slovene Enterprise Fund. And that finding a private investor still isn’t easy despite the increasingly bigger offer of private capital, which is why startups on their marathon run from confirming their idea on the market to international customers and everything in between still think that the government is currently one of the best Slovenian investors. At the same time, they reveal their advice and experiences for such a long-distance run.
 

Demo Day for 28 startups

Demo Day was held last Wednesday in Technology Park Ljubljana with members of the jury, consisting of startup mentors from Slovene Enterprise Fund’s list and the Business Angels of Slovenia club. 22 teams contending for the SK75 investment and 6 teams that wish to obtain the SK200 investment pitched to the jury.
 

Pleasantly surprised again

No demo day, which is full of expectations and stress all on its own, for teams as well as for organizers and jury members, has left us indifferent so far. But one of the more positive surprises was ensured right at the very beginning by the team Smart Turn System, developing a system for automatically turning off turn signals for motorcyclists.
 

Only an idea that saves lives wasn’t enough

The team started looking for capital last April by applying to the national competition Startup Slovenia and tender P2. Their idea, saving lives of motorcyclists, placed among the ten semi-finalists of the Start:up of the Year 2014 selection and obtained Slovene Enterprise Fund’s startup grant. But they weren’t one of the finalists (five best teams) that competed for the title Start:up of the Year 2014 at the PODIM Conference, because the evaluation committee thought they had too little market feedback and an insufficiently elaborated business model.
 

A good year for simultaneously developing the product and the market

What was key for their application for the SK75 tender was the feedback of that evaluation committee, which advised them to connect with motorcycle manufacturers as quickly as possible. The team took the advice seriously and spent a year focusing on customer and business model development, while simultaneously doing intense technical development, testing and product upgrades.
 

It’s difficult when you don’t do your homework

The pitch they did at demo day for obtaining the SK75 investment was something completely different from the pitch that we heard a year and a half ago. An excellently elaborated business model, confident performance and a business angel who invited them for coffee immediately after the pitch have confirmed what Rok Upelj, the co-founder, said as well: pitching and proposing to investors becomes difficult when they ask you questions to which you don’t have the answers, because you didn’t do the homework that any startup has on its path from validating the idea to the first serious sales.
 
 

Product and market development go hand in hand

Actually all four SK75 candidates we talked to on Demo Day – Anže Volovšek from the team SipSup, Gregor Kamin from the team BizPand, Davor Mišmaš from the team BreInOne and Rok Upelj from the team Smart Turn System – have confirmed that a confident pitch before investors needs firm, constant work on product and market development, which need to go hand in hand.
 

Company is worth nothing until they have sales

All four teams work 12 hours a day on average. And all have pivoted at least a bit from their first pitch in the first pre-selection phase to the pitch on demo day. They also had the first conversations with potential private investors. But for now, they aren’t searching for them all that intensely, because they’re already dealing with orders from the first customers, with which they wish to finally test their solutions and get as much feedback as possible. At the same time, they realize that “until you have feedback from customers and sales, your company doesn’t actually have any value,” emphasizes Rok Upelj.
 

Teams are connecting for market entry

You can watch the video clip below to see more about what was the most difficult part of the pitch for SK75 candidates, what’s their plan B if they don’t get an investment, and how some teams that apparently know the power of networking are already connecting for a joint appearance on the market.
 
 

Who is trying to get SK200?

What six startups that tried to get the SK200 investment on demo day have in common is that they already found international customers and distributors for their product, but they need additional capital for accelerating global growth.
 

The government as one of the best Slovenian investors

The possibility of gradually obtaining seed capital, first with the SK75 investment and then with SK200, is very important for them, which was confirmed by Miha Krisch (BG Boatguard) and Mitja Poljšak (Pricejet), since these are two of the companies that obtained the SK50 investment last year, getting a 50,000 convertible loan from the Slovene Enterprise Fund.
 
 

Searching for an angel that knows hardware

Searching for a private investor, whose presence is one of the conditions for obtaining the SK200 investment, is still not simple despite the rapid development of the Slovenian startup ecosystem. This was also the experience of Uroš Čadež from XVIDA who says that he misses private investors who truly know hardware companies. And reveals an interesting experience when he was invited for an interview in the American accelerator Y Combinator as a late applicant.
 

How will you build a billion-dollar company?

“How can you make me a billion-dollar company? This was one of the questions and I couldn’t prove it to them,” says Čadež who also got the feeling that Y Combinator is gambling. That they’re mostly interested in unicorns, searching for companies in which they detect the slightest possibility that they have potential to become the next Dropbox or Airbnb.
 

First excitement, then worry and hard work

A conversation with potential SK200 teams also revealed the feelings when signing the first bigger sales or distributer contracts. First comes excitement, soon afterwards worry when realizing how much hard work the team suddenly has to do in order to ensure that the product works perfectly, to take care of the packaging, distribution and guarantees for potential unplanned mistakes.
 

Sales aren’t a goal but a marathon at which you have to persevere

Poljšak, who already excited the first big serious customers at home and in the region with the Pricejet platform, also says that big sales aren’t a goal but a path or, better yet, a marathon you have to persevere at. At the same time, he agrees that when unsatisfied customers complain, it helps to have a big dose of kindness, patience and honesty, when you simply admit that you can’t solve everything at once as a staff-starved startup. Startup charm also helps, says Krisch, and a personal challenge to transform the most annoying client into a loyal customer, reveals Čadež.
 

Fairs aren’t for everyone

They also warn startups to be careful with fairs abroad, which are one of the most frequent first steps for entering the global market. Not all of them are suitable for everyone, and check if it’s really necessary to attend all of them as an exhibitor, warns Krisch, sometimes it’s enough to go as a visitor. Meanwhile Čadež recommends that you only go to fairs once you have a perfectly working product or a guarantee, and a meticulously structured packaging and logistics.
 

Evaluators happy about two key benefits

And how did evaluation committee members summarize their impressions about the already third SK demo day? Gregor Pipan and Darko Butina, who have been with us from the beginning, support and welcome SK Programmes for two key reasons …
 
 

Government support for the ambitious ones, building a community …

With a lack of private initiatives, they think it’s more than welcome for the government to financially support ambitious individuals who wish to co-create their future through entrepreneurship. The same or even bigger importance is also given to the community of entrepreneurs, mentors and investors that’s being built around both products.
 

… and a bigger possibility of survival and success

According to Samo Lubej, who attended demo day as an evaluator for the first time but has been actively tracking the startup scene for the past 18 years, SK75 and SK200 are reliable systemic solutions for the best startup projects to get starting capital and increase the possibility of their survival or potential success.
 


Presenting the teams

The list of SK75 teams that competed for investors’ attention and evaluators’ points at the autumn SK demo day have been posted in the report of the autumn working weekend. Six startup companies competing for the SK200 investment are listed below in alphabetical order:
  • BC Boatguard, developing and marketing an energetically very economical device for remotely controlling vessels and a device that protects boat owners from theft of outboard engines
  • Ledcom, developing and marketing accessories for mobile phones and tablets under the brand XVIDA, innovatively joining the function of a carrier, protector and battery charger
  • Maksus or GlobalWebDJ.com, which is a multimedia platform for online playing of purpose-made music in hotels, locales, restaurants, stores and other service establishments
  • Ponika, developing green technologies for aquaponics breeding of vegetables and fish
  • Pricejet, developing the online platform Pricepilot for online bookings, setting dynamic prices and a dynamic web or mobile advertising, including loyalty programmes
  • Vastok, developing a system for making and selling personalized natural cosmetics AlpStories
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Author of content: Stanislava Vabšek,
Communications and PR Start:up Slovenija
 
Start:up Slovenia eng
The Initiative Start:up Slovenia is an active facilitator and promoter of public and private stakeholders of the Slovenian startup ecosystem. In collaboration with them, we also carry out and promote national programmes for supporting innovative entrepreneurship. With all listed activities and partners, we are trying to place Slovenia on the map of established European startup hubs. The leading partners of the Initiative are the strategically connected Venture Factory and Technology Park Ljubljana. Members of the Initiative are Primorska Technology Park, Pomurje Technology Park, Savinja Region Incubator, SAŠA Incubator, RC IKT and RCR Zasavje. You can find all Initiative’s partners at www.startup.si/en-us/stakeholders. More...
 

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