On March 23, CFA Association Russia held its regular business breakfast, focusing on the early stages of startups and how their founders could build successful businesses with the help of venture capitalists.
The invited speakers at the event held at the Food House restaurant, which has lately become a regular gathering place for the CFA Russia community, were Dmitry Chikhachev, Managing Partner at the venture capital firm Runa Capital, and Mikhail Ushakov, a young entrepreneur known for the development of Forksy, software designed for weight loss and healthy-eating and the browser extensions company Metabar that a few years ago was successfully sold to Russian Internet-giant Yandex.
When dealing with the management of a startup, investors should only be motivated by how to best allocate available resources to maximize their value, Dmitry explained. Whereas startup founders can (and often have) other non-monetary incentives, such as comfort, a desire to work with his/her friends only or even a dream to change the world, investors’ key interests should be focused on the increase of a company’s cost.
Dmitry Chikhachev from Runa Kapital talking to Boris Tawakkoli (left), a member of CFA Russia's board of directors, and Vladimir Tutkevich, CFA Russia's executive director.
Although startup founders seek personal interests when managing their companies, they should understand that when they sign an agreement with investors, their personal interests should be put aside.
“The moment you sign an investment agreement, you become judicially responsible to satisfy the needs of your investors and shareholders,” Dmitry said.
The speaker also added that the idea of fiduciary duty and all the legal responsibilities that come with it are a common thing in the West; however, some startup founders in Russia still fail to follow and oblige this concept.
According to Mikhail Ushakov, the most important moment for a startup founder is when his/her company becomes profitable. That is the key and that is what all startup founders should strive for.
Mikhail Ushakov, the founder of Forksy
Speaking about the relations with investors, Mikhail pointed out the importance of trust.
“It can be hard to achieve, as startup founders and investors may have different interests, but it’s important to build trust,” Mikhail emphasized, adding that without the element of trust it can be hard to become successful.
The speakers soon turned their presentation into a dialogue, as the members of an audience were eager to ask questions and join a conversation. Compared to the San Francisco Bay Area, Russian startups may be in their infancy, however, slowly but surely, new entrepreneurial ventures are starting to get traction in Moscow and other big Russian cities.
CORRECTION: The previous version stated that Mikhail Ushakov sold Forksy to Yandex. This turned out to be false; instead, Mikhail sold his another startup to Yandex, the browser extensions company Metabar.