Each year, thousands of startups appear on the IT market. Investors are looking for the most competitive of them ready to put their money into a brilliant idea. Sergey Tokarev, a professional investor and the founder of technology company Roosh, shared his experience and gave entrepreneurs some tips addressing the Cyprus IT Forum.
Sergey Tokarev is a well-known investor with a remarkable portfolio that includes 100+ projects. Some of them gained popularity around the world, others worked well on the local markets.
Among the most promising projects funded by Roosh is Reface, an application based on facial recognition that allows users to edit their photo and video content, Oura Ring sleep and activity tracker, and Facemoji, an avatar system created in a collaboration with Twitter.
The investor believes in the further development of social networks that transform into meta universes that unite users.
Another prospective trend, according to the speaker, is no-code games for different messengers. Sergey Tokarev recently invested in Playco gaming company that has raised $100 million funding.
There are projects that the investor reflects as a good experience; despite them being unprofitable and unsuccessful. “Your failures will determine your further actions. It is pure mathematics: more fails — more new attempts with improved expertise — more success,” the expert explains. He adds that first investments are the riskiest but important to cut your teeth in. Problems appear and they motivate the investor to brainstorm solutions to solve them.
What helps to minimize risks is a comprehensive audit of the startup. It is worth analyzing the team, to test an idea, to check the level of expertise of the team members and risk management strategies they have.
According to Sergey, close to 100 percent of failures happen due to the wish of some team just to make money quickly instead of developing a good product. Talking to the founders of startups that are looking for investment, Sergey asks them about the transformation of the framework of the project in a long-term perspective. If the founder believes he can do everything in 1-2 years this is a red flag: real success comes to companies only at the age of 6-8 years.
One of the key factors of the future success of the startup is a powerful marketing manager working in the team. Understanding the needs and pains of the target audience is critical to build communication on a professional level and attract customers.
In the early stage advertising of the project`s idea among a small group of people can be a good evaluation criterion. Sergey says: “If you see that people’s eyes light up and they understand your idea, this is a sure signal that you are moving in the right direction. If there is puzzling in the eyes, this is a reason to reconsider the idea or the product.”
The investor explains how the founders work: mostly they create a dossier for each project to compare it with the competitors on the market. If there are some crucial differences between them, the investors analyze factors that can lead to success and adjust the development strategy accordingly.
To achieve great results investors should put not only money but also all their attention and sources into the project. For instance, working on Reface, Sergey expanded the network of colleagues that could be interested in the project, advertised it at every opportunity, and looked for collaborations. He was mentoring the startup and the result was significant. Cooperation of a professional founder with an inspired investor is always fruitful, believes Sergey Tokarev.