BGlobal Ventures launches the second cohort of its course for venture investors

18.09.2024

Participants will have the opportunity to learn from practical case studies by top experts from Silicon Valley.

Why is venture business a worthy alternative to other investments, what capital is required to start, and where can one learn effective startup investing? These questions were answered by the CEO of BGlobal Ventures, Abai Absamet.

  • Venture investments are a relatively new phenomenon for Kazakhstan. Why are such investments very popular abroad, while they are undervalued in our country?

  • Venture financing is a form of investing where capital is invested in startups with high growth potential but also high risks. Venture capital serves as a catalyst for the development of innovations and technologies. This is most clearly demonstrated by the American market, where over 90 years ago the foundations of the modern startup and venture capital industry were laid. It is generally believed that in the 1930s, Fred Terman, a professor at Stanford University’s engineering department, was the first venture investor to finance and mentor his students — Dave Packard and William Hewlett, who founded HP. Today, the company’s market capitalization is valued at 35 billion dollars.

If, 15 years ago, the list of the most expensive public companies in the United States was mostly dominated by companies from traditional sectors like oil and gas, automotive, and finance, today, technology giants dominate it, many of which have grown from startups. For example, seven companies from the top 10 by capitalization, such as Apple, Meta, Tesla, and others, were funded by venture capital in the early stages of their history. Today, their total capitalization is approximately 10 trillion dollars.

Clearly, one of the main reasons for the formation of the venture market in the U.S. is the investment activity of the population, supported by a developed financial system, a culture of capital accumulation, the availability of a wide range of investment opportunities, as well as education and awareness.

Our regional venture market has been actively developing only in the last 10 years. Nevertheless, there have already been some successes. BGlobal Ventures, together with its partners, conducted research showing that over the past five years, the volume of venture financing in Central Asia and the Caucasus region has increased by 5.5 times. In 2023, the volume of deals exceeded 110 million dollars. Kazakhstan became the leader among the countries in the report, with the total volume of venture deals in the country reaching 80 million dollars.

  • How much capital is needed to invest in a startup? And what investment mechanisms are available to Kazakhstanis?

  • In recent years, there has been a democratization of the venture investment market, making it open and accessible to a wider audience, not just traditional large institutional investors and wealthy individuals.

Previously, a business angel required at least several hundred thousand dollars to invest in one startup, but today, thanks to syndication (the joint investment of several investors in one project), the investment amount in a single project can start from just a few thousand dollars. This mechanism can be implemented through angel investor communities or specialized platforms.

The key recommendation for those starting out as venture investors is to join a community and try to invest alongside experienced angels, as the risk of error can be significantly reduced.

Those who are interested in this type of investment but do not have the time to search for and analyze deals may invest in a venture fund, where a professional team is deeply involved in this area. Choosing a fund is a responsible decision, but this approach does not guarantee that the invested funds will yield returns. Moreover, the amount of investment in a fund is usually much higher than what a business angel can invest in a single deal.

In general, before beginning to invest, one should formulate their investment thesis, which includes answers to questions such as: at what stage of a startup to invest, in which geography, with what check sizes, in which verticals, etc.

  • Which of the proposed mechanisms is safer?

  • All mechanisms of venture investing carry high risks to varying degrees. Therefore, we recommend investing only a portion of free funds available for investment, practically no more than 10% of the free capital.

At the same time, the principle of diversification should be maintained both at the level of investment instruments—balanced between the stock market, real estate, other assets, and venture—and at the level of the venture portfolio itself.

I should note that, like any area of investing, it is crucial to have sufficient knowledge and competencies. This is especially true for high-risk fields like venture investing. Therefore, before diving into this sphere, it is essential to acquire a basic set of knowledge.

  • What is the profile of a business angel? And why might venture investments be interesting for Kazakhstani investors?

  • I’ll start my answer with the second question. Venture business is not just a way to multiply capital. One of the key reasons for many active venture investors is the opportunity to be part of technological progress, to finance and help talented entrepreneurs develop ambitious startups that are changing the world for the better.

I also want to highlight that venture investing helps acquire new knowledge and competencies in various industries. For example, if an investor is considering a potential deal in SpaceTech, they need to quickly understand how the market works, what problem the startup's product solves, what business model is used, and so on.

All of this can be useful for both traditional investors, who view venture investing as a way to diversify their portfolios, and for traditional entrepreneurs, who, by increasing their awareness, can introduce innovative approaches and new business models into their core businesses. After all, there is much to learn from fast-growing startups to transform a company and enhance its competitiveness.

Venture investing also attracts top managers from various companies who have earned bonuses, are knowledgeable in specific sectors, and have the potential to become successful business angels.

Often, business angels are also successful startup founders who have gained significant experience in tech entrepreneurship and earned capital from exits of their projects for further investments.

  • Which startups are more profitable to invest in?

  • It is difficult to pinpoint specific areas for investment that are more likely to bring profit. However, a few fields that have historically been in demand in our region can be identified: financial and medical technologies, e-commerce, and more recently—artificial intelligence.

However, it is important to consider the experience and expertise of the potential investor. For instance, an entrepreneur or expert in the agribusiness sector has a strong advantage when investing in AgriTech startups, as they understand the market well and can adequately assess the investment attractiveness of a startup, and may also be helpful in its development. Again, it all depends on the investment thesis formulated by the investor.

  • In July, your company launched the educational course VC Bootcamp. Can potential venture investors use it as a basis for their first steps into the world of venture investing?

  • BGlobal Ventures specializes in the development of the venture market in Kazakhstan and the region, providing both financial and non-financial support. We actively promote this field through various educational initiatives—masterclasses and workshops.

Together with partners—Silkroad Innovation Hub and the Eurasian Business School—we launched the VC Bootcamp educational course on venture investments, which provides the opportunity for active online learning in this field over six days. It is important to note that the course is taught by practicing investors from Silicon Valley, which is rightly considered the global hub of innovation.

In the first batch, 78 people were trained—investors, founders, and corporate sector representatives, including from NURC "Baiterek," Qazaqstan Investment Corporation, the Astana International Financial Center (AIFC), EBRD, ADB, USAID, and others.

The next batch with a similar learning format will begin in September.

  • In the first batch, there were grants for women founders. Why was this decision made?

  • Our company actively supports ESG principles. We noticed that only 7% of venture deals in the region involve women founders. Therefore, in the first batch, we decided to allocate five grants for women founders, covering the entire cost of their training. We hope that the knowledge gained will help them in future fundraising efforts.

  • What makes your educational course unique?

  • Venture investing is still a relatively new phenomenon in our region, so there are few educational programs available that can serve as a solid foundation for a confident start.

Speaking of the main advantages of our VC Bootcamp program, its participants have the opportunity to gain expertise and learn from practical case studies provided by top experts from Silicon Valley, whose experience is revered worldwide. For example, some of the course speakers teach at Stanford University.

Additionally, a business tour to Silicon Valley is planned for October, where participants will have the chance to attend leading tech conferences—TechCrunch Disrupt and the first Central Eurasia @ Silicon Valley summit.

You can find more details about all the programs on our website.


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