Development of innovative businesses creates modern jobs, strengthens market competition, increases productivity, and ultimately fuels economic growth. Business angels - investors who support business projects at early stages of their development by providing finance, expert advice and networking support - are a key element of building a startup ecosystem aimed to develop innovative businesses.
In 2018, USAID supported creation of the Belarus Business Angels Network (AngelsBand), a community of local private venture investors, to stimulate the exchange of knowledge and best practices in the field of financing high growth innovative startups. With USAID support, AngelsBand grew from 15 to 75-90 annual members in less than three years. AngelsBand was growing rapidly in terms of numbers of members with various expertise and backgrounds. However, the co-founders lacked knowledge of organizational development principles and understanding of which direction to pursue for economic development.
“My participation in USAID’s Community Connections exchange program ‘Women in Business’ in 2019 acquainted me with the experiences of different kinds of venture investor companies,” Nina Labkovich, AngelsBand Managing Director said. “In the U.S. we visited firms, agencies, clubs, and associations with different numbers of members and diverse opportunities. We discussed a wide variety of approaches and methodologies they use. The American experience proved that in many respects we are moving in the right direction. For example, we were assured that our annual quantitative indicators of portfolio transactions are not small, and they are regular numbers for many angel associations.”
Nina and her colleagues, some of whom had also traveled to the United States as competitively-selected participants of the Community Connections exchange program, are actively using American lessons learned in the development of AngelsBand. Learning from their American colleagues’ successes and failures has helped Nina and her colleagues avoid making the same mistakes while assisting in the Network’s progress.
After returning from the United States, Nina and her colleagues have applied American best practices with renewed energy to enhance AngelsBand’s development. AngelsBand has regrouped to focus more on pitches and on the pre-screening of startups as well as quality due-diligence. This approach reveals startups’ weak points and provides a strong financial and legal analysis for proposed projects.
The American experience triggered the transformation of the Network’s mentorship support into a long term approach aimed at assisting projects with critically important expertise, networking and experience sharing opportunities at early stages when financial support is not yet available.
Membership agreement templates that Nina brought from the United States are being adapted and introduced into the AngelsBand’s operation. AngelsBand promotes the membership agreement as a useful instrument that cements the values and responsibilities of business angels. The Network is also considering introducing the American practice of operating in a mini fund format which allows a business angel to provide an annual contribution as a complete payment with prior consent to invest the money into the development of one or more startups within a year’s time.
Following best American practices, Belarusian business angels have introduced regular educational events for local investors on financial and legal investment practices, adequate risk assessment, role of lead investors, and other aspects of business angels activities. AngelsBand strives to develop a correct understanding of the venture investment concept within the local angel community. In particular, the network encourages serious science-based projects that engage experienced scientists. Chances for success increase when startup teams include the expertise and competencies of scientists.
Based on best American practices, AngelsBand reworked their training sessions that prepare startups for pitching. Pitching preparation now includes storytelling as part of a sales training and a standalone training in project presentation that focuses on selling the product to an investor stressing the business model and profit calculation.
AngelsBand has spearheaded the formation of a startup and venture ecosystem in Belarus by developing the business angel capital financing culture and promoting a new type of investment. The Network has supported an environment where ambitious technological projects can receive assistance in developing their startups and finding their investors at an early idea stage. Business angels, in their turn, have opportunities to invest in projects with high potential. AngelsBand’s effort to advocate for and build a mature venture and startup ecosystem in Belarus is in full swing. The Network is working hard to create an environment allowing for bright people and ideas to contribute to Belarus’ journey to self reliance.
Since 2016, USAID’s AID-VENTURE project, implemented by Belbiz, has helped create the Belarus Business Angels Network, and established the Business Angels Academy which has trained 126 potential investors on best international practices in venture financing. The project conducted multiple startup competitions and events such as the annual Venture Day forum and Global Entrepreneurship Week which help bring investors closer to startups. It also helped develop and now supports the first TechMinsk Accelerator in Belarus, in partnership with the Google for Startups program.
Nina Labkovich shares her insights from the Community Connections exchange program here (in Rissian): https://euroradio.fm/startapnica-yak-u-zsha-padtrymlivayuc-biznes-u-1405-raskazha-nina-labkovich
AngelsBand