Are you an early-stage startup founder struggling to secure crucial funding? Look no further than the insights shared by Vladimir Malakchi, the CEO of Xanada Investments. As a seasoned venture capitalist, Vladimir reveals the 3 key elements that investors like himself prioritise when looking at seed-stage opportunities and investments.
Vladimir emphasises the importance of assembling the ideal team - a strategic visionary, a technical expert, and a sales/marketing specialist. He explains that a strong, well-rounded founding group can often outweigh even the most impressive founder track record. He urges startups to understand their market benchmarks and projections, even in the earliest stages you need to have realistic, well-planned financial projections that demonstrate a clear path to profitability.
0:00 How to fund a startup 1:30 Where to start as a founder 3:00 Early-stage founder essentials 5:40 How to have realistic financial projections 8:00 Why you should adjust projections after the first year 11:10 The 3 secrets to raising seed money 13:00 How to build the perfect pitch deck
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The ideal team I think for the last 10 years in venture capital, it's always three factors, one in strategic, one technical, and one like sales marketing. You're listening to 15-minute mastery, a show that empowers you with insights from leading eye-gaming experts to enhance your personal or business performance. The show is brought to you by the AI-powered data analytics platform BLASK, and supported by 10 driven affiliate and media company already media. BLASK starts the leading casino partnership program and next.io, the world's eye-gaming community. Welcome back to 15-minute mastery. Today, we're diving into the world of early-station, startup investments with the true industry leader. I'm Trilte Anandz, Vladimir Decion managing partner at Sanada Investments. His film specializes in pre-seed, seed, and CVA funding, making him the perfect guide to help us understand what it takes for startups to secure the crucial early-stage investment. Vladimir is the great example of business development and commercial mind with a great expertise and proven track record. My friend, welcome to 15-minute mastery. Hey guys, thank you a lot for inviting me. It's really an honor for me to be here. Thanks a lot. Let's start with our first question, investment criteria. I think this is something which bothers a lot of minds in our industry and people in our gaming, especially in the startup segment. What are the key factors Sanada Investments looking for when considering a seed stage startup for investment? It's difficult to find any kind of financial triggers, unit economy and other stuff. The first thing is always important, it's team. You need to present your team your experience in the greatest way to show your strong size, to show what you're expecting, what you can do, and so on. The next, of course, is the idea of the project and the markets. If you're an expert in cuisine and you're trying to launch some e-commerce market, it probably will be not suitable for investors. If you're doing the whole time, you'll be to be a business. You're expertizing, they say, "You're going to launch it. You want to be a business. It's always good." I think this is two main factors that everybody is looking for. Of course, you're paying out of your opinion from the point of how you're blending and how you're making the goals. Don't be afraid to make very big goals, but don't try to make them huge and unreachable. The blending is very important for the start, because it's showing your mindset, your vision, and market analysis. There are a lot of things to do on it. Just be ready to rely on them. Thanks a lot. I heard three components which I really want to dig deeper into. I heard the first one was team, then unit economy and financial projections. Let's start with the first one. Team, how much emphasize do you place on the founding team when evaluating early-stage startups? What qualities do you look for in founders? The ideal team, I think, for the last 10 years in venture capital, it's always three factors, one in strategic, one technical, and one like sales marketing. It depends like B2C or B2C or B2B projects. This is ideal, let's imagine. If you have no founder from any kind of these stages, probably you need to find somebody from your employees, or who will join and cover this point of the team. Inside iGaming, nothing changes. If you're launching some platform or B2C brand, a sports walk, you need a very strategic guy with experience vision need. You need very experience technical, technical guy, and of course, like the market here, because you know exactly that. Without marketing, without traffic, there's no sense to launch it. I was chatting with the friend recently, and he said that to AD from stake.com, he can give any amount of investment at any valuation. Kind of referring back to his current results on the track record. Do you think track record of the founders is actually one of the most important elements? Or you would have preferred, like you mentioned, like a team of seasonal experts who are well combined with each other and the perfect team against the track record and legendary status of the founder? I had a conversation with one of my friends before, and statistics shows that if you have a super-style track record in one company, 70% of that the second company will be failed. So I can't put only on this. Of course, it's important to see a good track record. Of course, it's important to see, like, really firing the ice like it's old. You feel it usually when people are doing something they really want to do. But only because somebody launched something great, I don't know, five years ago. It doesn't mean, like, after five years, he or she can launch the second brand as well. So choosing probably some exclusive way, yes, I will choose some track record. But if we're talking about serial investment, I will give advantage to the team. Awesome. Thank you. I really like your answer. So next one from your first answer was the unit economy. So at what stage do you expect startups to have proven unit economies? How do you evaluate this for a very early-stage companies? Very nice question. Unit economy is a kind of theme, the understanding of the business festival. If we're speaking about projects in iGaming, there are a lot of options to take their benchmarks, their VIX, their BLAST, there are a lot of smaller services. So I really assume they're not so very expensive. So even on the startup stage, you can invest some money and collect data. If you're working in the industry, there are a lot of friends, possibly, or the projects. And what I really enjoy in our industry, you can speak with everybody. So when we're talking about unit economy, there are a lot of benches. And I expected even an early stage. Everybody's understanding that, of course, like, it doesn't mean that 100% it will be crucial to be the same that you showed. But at least you will have several options of understanding. You will understand how to build it, you will understand different models, and you will choose the best one that suits you. And only understanding of something which is already historical can give you an option to create something new. Because without understanding this, you can't just come to the market from the feed, from two feeds, entry at the door, and I have created a new system. Now, you firstly need to understand that creates something new, or it does all school. Thank you. I think it leads me to one quick question before we jump into financial projections about actually traction, and whether traction is more important than potential of the projects. Like, are these cases where potential can really alter it, lack of traction, based on your unit economy's reply? It's very, again, like, case by case. I mean, in our portfolio, we had one case from five projects that invested now, whether we put really effort fully inside the team without any kind of traction, without any product prepared. The guys for fully represented the experience, they worked in top companies, they did a lot of good things in top companies. And when we were speaking with them, the full analysis about market, about products, why do they need this product to be created? Why exactly, in this way, and what the problems with other competitors, how they can win them, so it was fully clear understanding. Yes, they have no numbers, because they're kind of new way of project, new way of positioning it. But at least they fully understand the market, and they can answer all our questions. And their experiences show that they probably really know what they're telling them about. So in such cases, when you're common as a startup to invest in, you really know that your new idea, your product, will solve a lot of problems of your potential customers, and your experience proved that you are not taking it from your head. I will invest in without traction. I will give it to potential. Well, okay, this is really interesting. I think not many investment companies in high gaming, especially right now, believe in the future, and less cash-oriented and cash-driven. So I really like your thoughts and your approach, because it's very similar to mine as well. Okay, so the team was the first. Unity cannabis was the second, and then we got financial projection. So what level of financial projections do you expect to see from the seed stage startups? How do you assess the realism? We know both that financial projections from the startups are always well-promising. It's good. Honestly, it's good. Even if you're targeting 1 million and you reach like 700,000,000, it's okay, no problem. But if you're targeting only like 100k and like, I don't know, five years, I think nobody will invest in you. So the financial projection is quite important. I'm not trying to make very, very deep financial projections about like, okay, office will cost you $100. I don't know, like, we will have like 50, 55 employees with such split of duties. Now, financial projections should include very simple things. How much are you going to spend on which major categories, what are you going to do, where are you going to earn, how are you going to earn? And again, based on major contracts, how many clients and how much is the potential charge rate, retention rate, how are you going to manage this? Very simple things just to understand when the investor can potentially return their money, what the categories of growing of your expenses should be like probably its employees or probably its traffic, and offices, traveling, sales, whatever it is. So the main categories of your expenses. In average, on the first way of financial projections, there is around 30% of mistakes. After half a year, if everything goes well, the you have already traction, it's possible to have only like 10, 15% of mistakes. No, this is really interesting. I was chatting with a group of people who probably invested around $200 million in the last few years, and when I was chatting with them about financial projections, we came to a very interesting point, and I want to run this through here. So with the current state of digital marketing and the digital era of fight gaming, it's very hard to build projections for like three, five years upfront. And we kind of came to conclusion that the projection which comes after the first year is becoming insanely inaccurate, especially for the early stage companies. So I just wanted to hear your thoughts on the timeframe of these like financial projections. So what do you think in the current realities is the perfect timeframe to build this projection? Before speaking about the early stage, I fully agree with this statement. I had the same mistake when I came to a gaming industry. The guys told me like, let's create the projections for several years ago. And I've created and it was very well promising and promised hundreds of profits. But in half a year, I have adjusted it fully because I understood that that was fully incorrect. And we have fully agree with you for the first year, which is early state, there is no traction, there is no numbers, you had just created a year. The first year is crucial, you can probably make it normal. But after first year, you need to adjust to adjust for several days. After first year's subtraction, if you have a good traction, you have five, I don't know, 10, 15 clients who are speaking about me to be or some traffic from the users, at least like, I don't know, five, 10,000 miles. You already have enough information to create more accurate production for year two, year three. And then you are just adjusting it to add in additional years from time to time. Awesome, I love it. So going back to essentials for a sec. So in your experience, what do you think are the most half elements of a compelling pitch deck for early stage startups? I will talk about iGaming because this is the main starting yet. So there is no possible problem in B2C. So nobody asking for a new brand or sports book. But there is a potential place in the market. So there is no problem. But you need to present your experience firstly. In my stage, if I was speaking about sit around, for example, you need to show your experience, of course, in turn to explain where you worked, what did you do, what the case, everything you can tell about your team will be a really good adjustment. And the main mistake that everyone is doing, they're making, I've seen for last several months days, they summarize in the experience of all founders making like, we have 100 years of experience, guys, please don't do it. It's a knife. Of course, when the market day are going to target, why are you going to like that? Probably you have experience, probably you see more hands experience in this market, you have the tall benchmarks, because no targeting Brazil and targeting Italy, for example, white and of Spain, it's three different approaches, three different strategies, and three different approaches of the marketing. So you need to fully explain that you were understanding what you're going to do, probably you have enough connections or payments if you applied for, for example, you need to explain how you're going to read this market. Of course, market violation, what the market potential, what the crows, we know these markets as the investment fund, we know most part of the markets, we are using all these data, but we need to understand that you know as well, you need to show your expertise and knowledge from the beginning. What a lot of projects forget, they forget, they don't forget to put how much money they need, but they always forget to ask what they need exactly, additionally to the money, and what they offer for this money. They're just putting, okay, it's around, it's like five million, okay, yeah, five million from five million or five million from 100 million, what depends, what you propose, do you need marketing, do you need some help, don't be afraid to ask investors about exactly what do you need exactly, it will help you to find the best investor. I think some team problem solution, numbers offer, I think that's all these, they're the main things. Awesome, I think this conversation has been so close to my heart as this is something which I was doing for the last eight months and I was really happy to hear that 99% of your answer were literally aligned with my vision as well. So I found this conversation insanely valuable. Thanks a lot my friend and I'm looking forward to chat with you soon. Thank you a lot, Mitty. And by the way, I didn't know we've started it like eight months together. Thank you, it's really cool. I was actually looking at it. I think you started it in JEN and I think I started like pretty much at the same time. So I think it was just like a few days before and then I started. So I think it's very cool to hear that, you know, we're both on the same journey and, you know, we share our vision in such a crazy aligned manner. I always pray that you feel it, but it's all right. [BLANK_AUDIO]
