A Look at the EntrepreneurialEcosystem in Eastern Europe and theBlack Sea RegionVenture Connect, 28 May 2013, Bucharest, RomaniaBarry Kolodkin, Regional Programme ManagerUNDP Black Sea Trade & Investment Promotion Programme
OUR WORK IN ITINDUSTRYCo-sponsor ofVenture Connect inBucharest, 2013Co-sponsor of ITMatchmaking Forumin Izmir, 2013Sponsor of CONNECTin Bucharest in 2011Speak at conferenceslike thisPurpose of program isto promote trade andinvestment in keysectors in the BlackSea region
TRADITIONAL INNOVATIONBASED MODELCOMMUNITY BASED MODELWhat does an EntrepreneurialEcosystem look like?Many different models …
Policy – OK –Markets – OK –Supports – Good –Finance – Bad –Culture – Bad –Human Capital –Good -DomainAssessment
Regional Issues• Lack of early stagecapital• Control/exit strategy• Need to make endsmeet• Understanding debt v.equity• Ability to sell• Deal size – US contextSome people stillreally don’t get it.
MIDDLE CLASSRomania, Bulgaria, Greece– Good entrepreneurs– Limited exit ability– Medium environment– Some scalabilityPAYOUTPoland, Turkey??– Big markets– Some ability to exit– Good entrepreneurs– Rapidly improvingenvironmentBIG WAVESRussia, Ukraine– Big potential– Unsure environment– Strong in heavy industries– Local moneyBOUTIQUECzech, Hungary, Croatia, Serbia– Small markets– Small labor pool– Success stories– Good engineers
There is money …• Commercial banks• SME banks• Government programs• World Bank/IFC• EBRD• EIB• BSTDB• EU– SME grants, subsidies– Innovation– FP7• Big companies– Google, Microsoft• VC– Twilio, Accel IV – started inMarch• PE• Angels• Crowdfunding• Individual investors• Microfinance
THINK ABOUTBERLIN, PRAGUE, TEL AVIV AS MODELSM&A IS STILL A DECENT EXIT STRATEGYDISRUPTION GREAT; MARKET DIFFERENTIATION ISGOODWHO IS YOUR CUSTOMER AND KNOW YOURCUSTOMERKNOW WHERE TO GET MONEY AND HAVE THE RIGHTPITCH READY – NEED MORE THAN ONE ROADSHOWUNDERSTAND THE PAYOUT/DEAL SIZE AS WELL AS THECOSTSTO GET AHEAD IN THE MARKETPLACE