Private VC Digital Disrupt Startup Funding SpaceApril 8, 2021
What makes a good startup?
How much money can the project make? How unique is the idea? How much media attention the company gets? Founders Andrey Belozerov and Artem Ermolaev of Digital Disrupt, a private venture capital club, argue it’s something different.
The duo knows they’ve stumbled upon something special when they discover a project “that meets or creates a strong demand, that calls to some basic human needs.”
They cite investment in Tilli, an educational platform that prepares children for school. Belozerov and Ermolaev explain the startup grew 25x in 2020, partially because the project “satisfies an important need…the need for education.”
Belozerov and Ermolaev are no strangers to the startup world even though Digital Disrupt was founded in 2020 (yes, in the middle of the COVID-19 pandemic).
Most interested in early-phase startups and tech companies, the club eschews a traditional VC structure and emphasizes a flexible, collaborative approach between club members, investors, and partners.
The founders have spearheaded investment into large entities like space logistics company Momentus, educational projects in Africa (Hippo Fred), and innovators in the digital world, like eHR platform PitchMe.
“It seems to us that the future belongs to the maximum variety of forms of interaction between capital, professional interests, competencies, and technological knowledge. Therefore, we believe in new formats, platforms, and services that will allow achieving super-matches between founders and potential clients,” Belozerov and Ermolaev muse as they consider the future of the VC industry.
A Cheat Sheet On What Potential Investors Look For
Any savvy founder knows their idea is only as strong as their ability to attract investment.
Author Alejandro Cremades writes in The Art of Startup Fundraising & Serial Entrepreneur about how vital it is for a startup to have a proper amount of working capital and runway to reach the next milestone. Cremades notes how he’s seeing “an increasing number of ways startups are getting noticed, found and are connecting with potential investors.”
Belozerov and Ermolaev look for a few key elements when considering startups that come across their desks.
Both always consider if a project can “apply our knowledge, contacts and help founders to maximize the efficiency of our investment.” The reason? Once interests and competencies between a team and the investor match “you can achieve effective cooperation and multiplying market success and capitalization of the startup.”
Going on, the duo says a startup will have a better chance of inking a deal with Digital Disrupt if negotiations continue beyond a few introductory meetings and “basic due deal procedures.”
Belozerov and Ermolaev have a few tips for industrious startup teams looking to make it through discussions with potential investors. To them, it’s extremely important project team members are “experts in their field and understand what they’re doing…are ready to work hands-on, dive into a daily routine, and improve each business process and each detail of the product.”
They point towards the personalized skin care service Openface as a good case study.
The Digital Disrupt founders reference how the company CEO has ten years of experience in marketing business development and mention the COO’s educational credentials, namely a master’s degree in chemistry and finance.
These levels of expertise, coupled with Openface’s reliance on big data, allow the business to “think in detail about the mechanics of entering markets while not forgetting about the product itself.”
Support At Any Stage Of A Startup’s Development
Startups who do receive support from Digital Disrupt receive more than just funding. Belozerov and Ermolaev point to the company’s “alliance of committed professionals ready to help when you need it” thanks to the club’s emphasis on turnkey, tailor-made approaches.
An example of this model comes when examining the Hippo Fred educational startup. Belozerov and Ermolaev note the company was born after an unplanned meeting with a European entrepreneur who lived in Kenya for a few years. He had insight into local industry, prompting Digital Disrupt to collaborate to help evaluate the market and eventually launch a rapidly-growing app helping Kenyan children learn math.
When it comes to potentially launching a startup, Belozerov and Ermolaev encourage entrepreneurs to take the plunge. Both believe the world of digital industry “offers a lot of opportunities if you want to earn money through innovation and enjoy the social impact of your investment.”
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