Sitar Teli, Connect Ventures: “You have to go where the capital is”

Newsroom 23/11/2012 | 13:06

Venture capitalist Sitar Teli talks to Business Review about her investment focus saying that her presence in Romania for the second time is justified by an investment interest in the Central- Eastern European region.

By Otilia Haraga

What are the most important projects you invested in up to this point? Have you invested in a startup in the Central-Eastern European region?

I’ve invested in several early-stage startups through both my previous fund, Doughty Hanson Technology Ventures, and my current fund, Connect Ventures. The companies include SoundCloud (Berlin), SecretSales (London), CityMapper (London), URList (Berlin) and MegaZebra (Munich). Most of these investments were made at a very early stage, through either a seed investment or a Series A investment. They’re all important (naturally!), though some have grown quite a bit since I first invested.

I haven’t invested in a company in the CEE region yet, but it’s an area we’re looking very closely at (hence our support of and participation in How to Web)

I read in your bio that you mainly invest in early stage companies with strong focus on product and user experience. Why is that, what are the reasons?

It’s my belief, and there’s plenty of anecdotes to demonstrate it, that a focus on product and user experience is the best use of capital for an early-stage company. If you’re a startup just getting off the ground, as are most of the companies I invest in, your resources are severely limited. You have to allocate capital to the areas that lead to efficient, scalable growth and product and user experience are the two best. Everyone who uses your product is affected by the amount of effort you put into developing it and the user experience you craft, and is that much more likely to become an advocate. In addition, if you focus on product-based distribution and compelling features, it further increases your growth rate and engagement, two of the most important growth drivers for any company.

Usually, in how much time do you make an exit from the business?

I don’t have pre-set expectations on how long I’ll be an investor in a company. At Connect Ventures, what we consider in our investment-making process is the founding team, how compelling a product is, and what we think the long-term prospects are.

What is the maximum and minimum threshold that you invested in projects?

Our investments range from GBP 250,000 to GBP 1,500,000, though for the next year we are going to focus on sub GBP 750,000 seed investments.

Would you consider investing in a Romanian company? Have you come across interesting projects that belong to Romanians?

Of course! Last year at How to Web I spoke to some really interesting entrepreneurs that were starting to work on compelling projects, so I’m particularly interested in how those are developing. One thing VCs look for is companies that are building global businesses, which is an ambition that I think Romanian entrepreneurs are just starting to address. Over the past few years, a few Romanian companies like Branient and Ubervu have started scaling internationally and I think they’re great role models and a positive influence on the scene here.

What advice would you give to a young Romanian entrepreneur who is confronted with a lack of funds but believes his/her idea will catch on?

This may be difficult advice to hear, but I believe you have to go where the capital is. If you truly believe in your idea, and can’t find local investors who are willing to back you, consider moving to an ecosystem that has more risk capital (i.e. angels, seed funds, VCs, etc). An alternative approach is applying to one of the pan-European accelerators or incubators – these can be a fantastic way of getting much wider exposure to investors than you would ordinarily.

Do you have any knowledge about the Romanian entrepreneurship culture? Is it different from what you have come across so far?

I do and I don’t see Romanian entrepreneurs as any different than the ones I’ve met in London, Berlin, Paris or NYC….or anywhere really. The ones I’ve met are passionate about solving problems and building great products. I think the situation they face may be tougher, as from what I’ve heard, entrepreneurship is not as widely celebrated in Romania as it is elsewhere. Hopefully, efforts like How to Web can change that culture. In the meantime, though, I think entrepreneurs have to shrug off the criticisms and negativity they may face at home and persevere and focus on building their companies and giving themselves the best opportunity they can to succeed.

Sitar Teli is partner with Connect Ventures, an early-stage fund focusing on European internet and mobile companies. Connect Ventures’ investments include: Secret Sales, Space Ape Games, Ondango, and Citymapper. Prior to Connect Ventures, Sitar was with Doughty Hanson Technology Ventures for seven years and was a board member of SoundCloud, MegaZebra and Handmade Mobile. She was present this year at How to Web, on November 7-8, in Bucharest.



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