A common situation: a fundraising founder comes to the Valley and wants to meet VCs, calls someone who he knows there (very often Bogomil Balkansky) and asks for an intro, as soon as a meeting is arranged it turns out the founder has already left the US. The problem: missed opportunities. The reason: no predictability, due to bad planning.
This is a repetitive scenario that Ivan Dimov, CEO of Bulgarian Entrepreneurship Center (BEC), has seen many times. And this is also one of the issues the new Bulgarian Innovation Hub in San Francisco aims to solve.
The main drivers overseas are the Bulgarian honorary consul in the Valley Bogomil Balkansky and Pavlina Yanakieva from Teach for Bulgaria. Vassil Terziev, co-founder of Telerik Academy and partner at Eleven Ventures, and Ivan Dimov are those in Bulgaria.
Prepare before asking for US capital
It is clear why Bulgarian and not only founders go to the US: either to fundraise, because they need more cash than the available seed funding on the local market, or they want to enter the US market. Local VCs also travel often to explore investment opportunities, fundraise or look for follow-on investments for their portfolios.
BEC has identified around 20 companies that are ready for the next step to the US and could benefit from the support services of the new hub. The Bulgarian Innovation Hub will provide particular services and aims to institutionalize and put into process the established and not so effective ad hoc support approach. For startups, the new center provides office space, access to legal and tax advisors, intros to mentors, potential partners and clients and VCs. The idea is that founders stay for several weeks, use the office spaces rented by the hub and plan accordingly, but also get prepared to speak to investors and clients.
“We lost a deal with a major client in the first two months because we lacked US corporation status and representation”, Ivan Osmak, CEO of Gtmhub says. According to Dimov, founders are often not prepared to fundraise as well, which are missed chances. “VCs ask about clients, testimonials, subsidiary in the US, where’s the IP etc. and often enough entrepreneurs haven’t thought about that in advance”, he explains.
The office is expected officially to launch operations in the Valley in May and to welcome its first cohort this autumn. The pilot accelerated group will be selected by the team of the hub. After this, the hub will be open for applications.
The social experiment
Having a representative office of this kind is nothing novel: Germany, France, the Nordics, the Czech Republic, etc. already have similar structures. The interesting detail is, that unlike the other hubs that are backed by the local governments, the Bulgarian hub is a 100% private project, initiated by BEC and funded in the startup way.
The center is a “social experiment”, as Dimov calls it. It is registered as a nonprofit but will operate as a consultancy that offers soft-landing to startups and investors.
The first two years of the project are aiming to validate the concept and eventually transform the center into a for-profit entity. The team has almost gathered the needed initial $500K for the first two years of operations from the local VCs, who are also willing to benefit from the services BIH offers. For the companies that go through the tailored acceleration, the program is paid, however, the prices are still not defined.