How to cash in on an idea - As of February 2013, training for hundred SMEs in how to find new funding methods

In the offing, where waves are churned up by crisis currents and even the biggest ones are not so secure, the only thing that can save small companies from being crushed against rocks is the everyday care of the course they have taken.

Since money is alpha and omega, when you consider starting (or improving) your business, the availaibilty of sources of finance is the first challenge you are going to face. It is difficult to make plans without understanding the criteria set by banks, investment funds, state and international agencies. In spite of that, a majority of financial experts are of the opinion that entrepreneurs in Serbia still don't know much about some significant opportunities that are available to them, one of which is venture capital financing.

Last week, several big steps were taken in that regard. Belgrade hosted the first Balkan Venture Forum (BkVF), where innovative entrepreneurs and large global investors presented their "supply and demand." Also, Robert Shefrin, who is engaged in the Integrated Innovation Support Program (IISP) in Serbia and runs the company International Venture Capital Consultancy, spoke at the Belex conference "Upgrade in Belgrade 2012" about venture investments in Serbia, potential for the development of that market and the barriers we must tear down. On that occasion, he also announced the newest training program that is being prepared by the IISP.

Be ready for investments

- Venture capital financing in the Western Balkan region is still in its infancy. When it comes to supply, the interest of international investors is still low. On the other hand, when we talk about demand, that is, prospective users of funds, there is a lack of understanding. In order to remove barriers for investors, Serbia must regulate some strategic items, such as taxes and regulations, improve financial mediation, etc. – Shefrin explained.

(Robert Shefrin)

- In order to break down users' barriers, we plan to launch the Investment Readiness Improvement Program, which will include a training for hundred small and medium-sized enterprises. The implementation of this program should start in February 2013 - he announced.

Under this program, enterprises will have an opportunity to get familiar with alternative sources of finance, investors' basic requests and the way in which an enterprise should present its business to investors. They will learn how to create a business plan so that it is attractive to potential investors, as well as how to enhance the way in which they present their ideas and how to define business strategies.

Interested companies can already now contact the IISP, visit the web address http://www.iisp.rs/Prijava-Investiciona-spremnost and leave their contact details, so they could be notified of the start of the application process.

How investors choose

At BkVF, on November 22 and 23, representatives of all kinds of investment funds - start-up, seed, business angels, huge venture and private equity financiers, presented the areas of business they invest in, as well as the criteria for deciding who gets the money.

- What we seek in entrepreneurs is to show that they have recognized a problem or a need in the market, that they have found a competitive product or service to satisfy that need, that they know the profile of their prospective clients, and that they have discovered a way to lead consumers into buying that product or paying for that service. The ability of an entrepreneur to cash in on an idea is of the utmost importance, and we also search for a growth potential - says Michael Gold, director of the US investment company Crimson Capital, which has been active in eastern Europe for quite a while now.

- My opinion is that the team comes first when we are choosing the company to work with. A good team can fix many flaws in the product. However, if you don't have the right team, there is no product or business plan that can help you – says Sasa Cvetojevic, member of the Managing Board of the Croatian Network of Business Angels and the owner of several health care and ICT companies.

(one of the panels at BkVF)

- It is very important for me to assess their working habits and whether they are capable of making the agreed deadlines.

Apostolos Apostolakis, an entrepreneur, "business angel" in the ICT area and a co-owner of Greece's Doctoranytime.gr, is of the similar opinion.

- The company's team is the most important, then comes the idea, and then its growth potential. I usually spend few weeks and have five or six meetings with the team working on a project before I make a decision. I also believe that it is very important that the company is ready to adapt its business plan.

Questions

The total of 43 competitors, mainly from the IT sector, presented their innovative ideas at BKvF. There were also some representatives of medical and green technology companies among them.

The jury selected the best ten companies among them, which will have an opportunity to present their ideas in Berlin, at the final competition Europe Venture Forum. Seven of these companies are from Serbia – Brainstorm, Coprix Media LLC, Fliiby, Diasens and KreativeTeh from Belgrade, Novi Sad-based Rendered Text, and Poduhvat Ltd from Nis. The top 10 list also includes E-GLAS from Rijeka, Greece's Galoocom Services and Melt from Ljubljana.

Aside from classical questions - about the target group, reasons for seeking a partner, growth plan, etc., there were also some tricky questions that investors set to the representatives of medical companies.

- Is the product tested on humans? (This is very important because an untested product is less likely to draw someone's attention)

- Are you aware of the failure of your predecessors and how do you plan to perform better than they did? (If you have a "revolutionary" product or service)

- Do you have a clear plan for registering your medical product abroad and do you meet the requirements to do that?

- How are you going to patent your product in Serbia and how do you plan to do that in other countries?

M.S.