Lyuben Belov, LAUNCHub: “Bringing startups and angel investors together is the best way”

Startups in the CEE have now the opportunity to apply to an accelerator and they’ve got hundreds of options to chose from, around the world or even within the region. But their objective is to secure an investment from an angel or even a VC.

In the last few years the regional startup ecosystem has been developed significantly with local accelerators and investment funds being raised. The interest for the CEE region of the Western VCs has also increased but there’s still a gap in funding from local investors that needs to be filled.

We asked Lyuben Belov, a successful entrepreneur and one of the pioneers of the Internet sector in Bulgaria, now Managing partner LAUNCHub seed fund, what’s his take on the matter from a regional perspective and how local investors can cooperate with accelerators to fill that gap.

Lyuben had exit Net Info to Sanoma Magazines International in 2008, a transaction that represents the highest valuation achieved in this sector in Bulgaria, then actively invested in startups through either the vehicle he founded or as an angel.

You have a very successful exit in your track record, after which you focused on investing in startups. Which of the two do you enjoy more and why: founding startups or investing in them?

Lyuben Belov: The thrill is quite the same both ways. In either of the cases you are starting something that you dream to become big and meaningful and you want to see it through with all your heart and energy. It is all about the feeling that you took a look ahead, found an opportunity and had the chance and hopefully the luck to build something really big, not just about the money you will get in the end.

What has changed in the Bulgarian tech ecosystem since you founded your startup until the present day?

Practically everything has changed – from the attitude, to the environment through the access to financing. When I started, Bulgaria was only just starting to talk about tech. There was no real ecosystem, just a few players trying to find the right way through. It was an unknown world, challenging and longing to be explored. I often say that I am from the first generation of tech entrepreneurs in Bulgaria, when it all started.

Which are the main players that contribute to the ecosystem?

The core of the ecosystem are the founders. I always say that all of us are service for the entrepreneurs – the funds (capital is commodity these days), the mentors, the service providers, etc.

However some foundation was needed in order to boost the ecosystem’s development. Some tech companies that first of all changed the tech scene in Bulgaria and opened up new opportunities for a country to develop its engineer capacity. Bulgaria has a good educational tradition in engineering.

Then came the first entrepreneurs, daring to start tech business on their own. Telerik is a great example for talented, daring young people to disrupt the whole scene. It was only in the past three years that we started to talk about funding in terms of acceleration, seed and venture capital.

The EU institutions and initiatives played an important role here too – the European Commission, the European Investment Fund. And then it was raising awareness of the new reality and first funds and startups that joined the game. Altogether, I can say both Bulgaria and the region experienced a super change in digital entrepreneurship for the last three years.

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What impact do you expect Telerik’s exit to have on the local and regional tech ecosystems?

They made history and will be remembered. I strongly believe this will impact the way our digital entrepreneurs are thinking – make them braver, take them out of the comfort zone and get them dare to risk and to change the scale and the limits.

It is a great example to admire, follow and respect for years and generations of startups to come. The old saying – nothing is impossible! Two things are the most important – they put a stress on the role models and there would be recycled capital.

Did you invest in startups as an angel investor before co-founding LAUNCHub?

Yes, I am also an angel investor but founding and working with LAUNCHub is different – you have a team and you are into something big. I do not like to work on my own; I respect and believe in teamwork. This is a value we look for and try to bring in all startups we invest in and work with. As a firm believer of the team work I much more enjoy working with the team.

How do you see the interaction between angel investors and accelerators? Do you see a way they can create more opportunities and offer more support to early-stage startups?

It is a complementary model with proven results and benefits for all sides. Early stage investment is very important but never enough. Angel investors bring in also other key factors other than the cash – experience, value, mentoring advice, market and product knowledge, testing techniques.

The region does not have that many angel investors but our team is seeing a growing interest from the Western European countries, from the US. More and more angel investors are coming to the events in the SEE region, they have well-acknowledged the tech potential and educational preparation in our countries and are ready to take part.

How do you encourage angel investors in Bulgaria to take their chances on early-stage startups? What professional field to these investors usually come from? What do you think accelerators in the region are doing well and what could they do better?

Bringing startups and angel investors together is the best way. LAUNCHub puts a lot of efforts and energy into connecting people, networking and of course lots of events on a year-round basis. Most of the angel investors are coming from either the corporate world or are founders themselves.

How do you think that the increasing competition between acceleration programs will change the way they operate?

We still need to see how accelerator 2.0 would be like. I think we are overpacked with accelerators of all kinds. I even heard of Coke accelerator…

How did the presence of two local investment funds in Bulgaria affect the local startup world there?

Let’s put it in some figures:

  • 2 Funds, 2 years’ in operations;
  • 21 Million Euro capital;
  • over 120 startups invested in;
  • over 400 founders on board – from more than 10 countries in the region, including Romania;
  • 2 Series A Rounds closed in Bulgaria and now looking even further beyond;
  • More than 20 VC’s have expressed interested and visited Bulgaria in less than 2 years;
  • 5 key areas addressed to bridge technology and innovation with – dev tools, education, healthcare, finance and entertainment;
  • Bitcoin on the run, first startups founded and funded.

So, it’s a growing and maturing ecosystem attracting more and more attention from the Western VC world, thus building a bridge to more developed ecosystems. I think it is not bad at all and I expect the figures to get even better with initiatives and events like How to Web helping the ecosystem grow and bringing together the best digital startups and investors in the SEE region.

The How to Web’s Angel Investment track is co-curated by Angelsbootcamp. Its Program Director, Mike Doherty, will moderate a panel talk with George Lemnaru and Malin Stefanescu, sharing his expertise gathered from working with angel investors from all over Europe. This track has been initiated and developed in partnership with VIBE (Venture Initiative in Balkan Europe), a regional eco-system accelerator supported by the European Commission. VIBE is one of the projects of the South-East Europe (SEE) Programme.

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