Women Impact Angels Investors and the future of entrepreneurship in Serbia
13 December 2018 - belgrade

The Impact Angel Network, as a part of Impact Hub Belgrade, will help the development of the entrepreneurial ecosystem in Serbia. It will bring to the forefront women and men leaders, investors, and founders who are growing their businesses internationally, thus creating increased job opportunities, innovation and economic development. Serbia will be seen as a developing entrepreneurial ecosystem, attracting international investments and opportunities. This is not a mere wish, but the reality we’re creating every day!

Such a trajectory is definitely reflected in the work of our Impact Angel Investors, and we’re extremely proud of them. Recently, we had a privilege to interview some of our women entrepreneurs and angel investors here in the Hub, who continually grow their businesses while helping Serbian startups rise at the same time. These are their honest opinions about the (r)evolution of the startup scene in Serbia. You’ll read the most insightful and honest answers combined from many interviews we held with our Impact Angel lady-bosses!

Why did you join the Impact Angels Network?

I’m an Impact Angel because I like to ‘walk the talk’ and put the money where my mouth is. I am also going after my goal of preventing the angel investing gender-gap in Serbia before it develops as it has been happening elsewhere in various entrepreneurial ecosystems. Remember this? “There is a special place in hell for women who don’t help other women.” And it’s a twofold mission:

  • To achieve gender equality, and
  • To scale business sustainable growth;

This goes hand in hand with my big vision and I know it is feasible, viable, desirable and achievable. At the same time, I collaborate and work at the same time with startups, mentors, angels from Serbia and abroad. I see very clearly how we at Impact Hub Belgrade can bridge market opportunities from Serbia to the US and international ecosystems and accelerate startups growth to reach US targets. But, it takes a village to make this happen. Hope more people become aware of this so we can better collaborate and build faster.

Startups are starting to develop in Serbia and there is an urgent need to connect the dots and enable professionals to support startups while raising their stake. I am convinced that angels are the key to bridge the early-stage gaps of startups in Serbia and I am very excited to take the challenge and be amongst the “first movers”. We are ready to experiment and fail small which is the same as learning. The objective is to accelerate the “learning-unlearning-relearning” cycle, then share it with increasing numbers of professionals, founders and entrepreneurs.

Why are investors more resistant to investing in the startups from Serbia?

Worldwide angel investing is demonstrating to be profitable and also a powerful source fuelling national economies, jobs and innovation. However, Serbia is not yet there and while more startups are arising, success stories and exits are few and far between. “There is nothing as convincing as a success” is so true! Without examples confirming how angel investing practices create the same impact in Serbia, the number of angels is going to be lower. So, we are at a very exciting stage of the “pioneers’ gap” where a few have started to invest and mostly to accelerate the learning (their own, the startups’ and the ecosystems’).

There’s clearly a mystification of what angel investors look like and how much money they earn; not to mention that most often they are depicted and referred to as males. And I know a lot of individuals that do not consider themselves or are not “high net worth” as per how this is defined in the USA, UK, Vietnam, etc. They are not at the head of multinational corporations in Serbia and do not necessarily play squash, golf, tennis at sports clubs.

Our angels are:

  • Professionals with business practices and experience;
  • They see how startups can create further opportunities and add value to their professional endeavours;
  • Angels are also connected to business people that could receive and create benefits by collaborating with these startups;
  • They see money in the longer-term and a lot more successes from Serbia that will make everyone live better here, including themselves;
  • Angels have and an income/revenues that can allow them to put aside some cash, which they may decide to invest in startups instead of saving;
  • Their stake is higher both in terms of learning and drives to success;
  • They are the real pioneers whose investment is in the entrepreneurial mindset;
  • Angel investors are the bridge from friends and family to more structured funding;
  • They risk as much as the founders do and the projections of success are very low at this stage.

That is exactly why they are still reluctant! Most often, afraid more of the social and cultural consequences of “failure” that can mean “shame” in our environment.

Is there something about the startups that make them seem less investable?

Generally, main barriers that (potential) angel investors perceive are:

  1. The feeling of being the “first” that associates with loneliness and foolishness;
  2. Lack of incentives;
  3. An early-stage gap of startups in Serbia that prevents them from attracting investments to scale traction

There is an additional element that is very specific to the emerging ecosystem and that relates to underdeveloped accumulation of know-how. Just like startups, angels did not have so far models and peers from Serbi transferring their lessons-learned, failures and successes. So, there are three types of disconnects:

  • Lack of self-confidence and awareness on how these professionals and individuals can actually be so relevant and crucial in the learning path of startups – “how could we help founders anyway?”;
  • Insufficient tools and body of knowledge to raise the confidence of potential angels in assessing investability, prospects of deals and scalability of businesses;
  • Insecurity about the possible investment mechanisms and vehicles and how they are applied in Serbia and recognized abroad;

There are really three but actually two main things that are most important for angel investors in terms of investability of seed or early-stage startups:

  1. the team – experience, skills, diversity, communication;
  2. the market opportunity;
  3. the “idea” or solution;

Idea or solution is the last of the list because at this stage it’s actually not developed, and by default, it will be pivoted repeatedly before taking shape. The main reason why startups from Serbia look like they are less investible is exactly that they often reverse the rank hierarchy of these three elements. They have a tendency to develop solutions without testing. Often, Serbian startups fail to collect relevant, objective, qualitative and quantitative data referred to the type and size of the (addressable) market they are targeting!

We see a lot of technical experts who are founders (like scientists and software developers, for example) pitching and thus focusing on and asking investments for the development of the product instead of addressing the problem-solution-fit; the customers and the markets and why the team is best positioned to achieve results.

Furthermore, we see a lot of capable women building startups and significantly contributing to business development. At the same time, because of gendered roles, they still encounter difficulties in pursuing big visions and big markets and they tend to refrain from officially taking on leadership and founding roles.

What are your expectations from the Impact Angels Network?

There are several expectations I have from the Impact Angel Network:

  • I expect an increasing number of impact angels to join forces in supporting startup growth from Serbia, which will exponentially increase the odds of success;
  • Reaching and engaging women in equal measure as men in angel investing because this will both increase gender-equality and business asset growth!
  • That the Impact Angel Network in Serbia, leveraging on its international character, will enable investing practices and mechanisms that make it easier for angels to invest.

Honestly, the lack of established practices here in Serbia creates a lot of insecurity. But even if angels usually invest in startups that are “a phone-call away” they have a lot of similarities worldwide. Connecting the ones with more experience in international markets with angels from Serbia growing their own practices is a win-win-win:

  1. This strengthens the know-how and experiential learning;
  2. Connects market opportunities and expands relevant networks for startups and angels;
  3. Creates better referrals and trusted deal-flow also for the next round investors;
  4. Enables access to more startups and allows the spreading of investments which automatically increases the odds of success!

Angel groups that start out may not have the time to manage, track and timely react to the needs of the startups. They may not have resources to dedicate to support their growth path or the ability to allocate them in a concerted and systematized way. This creates resistance here from the side of potential angels and it inhibits their engagement. Actually, it does not allow startups to fully take advantage of the potential contribution.

This is why in Venture Growth Accelerator we match angels’ support with acceleration services that increase founders’ competence, startups’ investment readiness and the likelihood of the next rounds of investments. This creates value for the startups, the angels and the ecosystem: it increases the odds of success; accelerates growth and learning of all actors involved in Serbia. Such a process is extremely needed at this point!

Are you interested in our Venture Growth Accelerator? Send us an email to belgrade@impacthub.net