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Interview: Elena Mazhuha of Flyer One Ventures

Elena Mazhuha is the first employee at Flyer One Ventures, which she joined after stints at TA Ventures, Citibank and Ernst & Young. As well as sourcing seed, late seed and Series A deals, she has built an internal communications team helping F1V portfolio companies with PR and business development. She is also extremely active in educating the market about PR and marketing through various channels – check out her two articles on Sifted here and here.

How did you end up in the startup world?
My career path began with work in analytics, then I was involved in investments in bonds, currencies and other classic financial instruments. However, even then I realized that I was more interested in working with businesses directly. While reflecting on my professional development, I came across a lecture by Viktoriya Tigipko from TA Ventures and realized that this was what I really wanted. I got an internship at TA Ventures when I was in my 4th year at university, and that was the beginning of my career in tech.

And what were you doing previous to F1V?
First, I was an intern at the analytical media Vox Ukraine, then I did an internship at the analytics department at the biggest media holding in Ukraine.

When I realized that I was more interested in financial issues, I joined EY’s valuation and business modeling department. After that, I joined Citibank in the sales and treasury department, where I got to work with salespeople, traders, and financial instruments. I even helped my colleague develop a new investment product for corporate clients. And then I got into TA Ventures. Along the way, I also helped a friend with an NGO, focused on female leadership.

What are you looking for in startups at Flyer One?
Flyer One Venture focuses on startups from the CEE region. We invest in B2B & enterprise SaaS, EdTech, mobile, gaming, and other startups at pre-seed, seed and Series A stages. It is also worth adding that post-revenue startups that are already generating revenue are a priority.

And in founding teams?
First of all, we pay attention to the founder’s motivation and level of engagement. You can tell right away that a founder is motivated, if she previously encountered a problem the startup works on and is driven by her mission to solve it.

Also, the previous experience of the startup founder and strong expertise in the team is essential. For example, we look at how many people the founder managed before, whether she had other startups and successful exits, and whether she was an effective manager. In other words, we assess founders’ management skills and entrepreneurial spirit.

Equally critical is the balance of skills in the team. If the team is working on a deep-tech solution and is founded by two PR specialists or other non-tech professionals, this is hardly a great combination. Another thing to pay attention to is the founder’s ability to hire strong professionals. If in the early stages it was possible to attract outstanding experts who believed in the product and joined the team, this is a strong sign.

And why should startups choose you?
We build a strong connection with startups and help not only with fundraising but also with operations. For instance, we assist portfolio companies with recruiting, product, analytics, PR, and other areas. In addition, we built a platform for founders. There, they can learn more about the perks and discounts they can get from our 50 partners, useful workshops on PR, fundraising, business efficiency, and community-building events.

How do you assess the startup ecosystem in Ukraine? Recently news have come out highlighting both the resilience as well as the need for survival funding during the war – how do you assess the situation?
The war has shown many Ukrainian startups, which have already received funding, are very resilient. They are able to spend money wisely, maintain a solid growth rate, relocate their teams from dangerous regions, and adapt to working remotely in weeks or even days. According to Forbes research, none of the Ukrainian startups that received funding from active Ukrainian VCs has closed since the beginning of the war.

What is also remarkable is that the demands of many startups, despite the war, have not changed. Many companies are still interested in fundraising and PR on the international markets. At the same time, everyone finds the time to launch charitable initiatives and donate money to the Ukrainian army.

How is F1V facing the challenges of the war – from addressing personal safety of the team, founders to coping with the financial implications?
The fund supported its team and their relatives to move to safer parts of Ukraine and provided accommodation there. We also actively helped our portfolio companies with employee relocation and operational things. For instance, for a number of startups, we have prepared a financial model that recalculates the company’s cash flow weekly (biweekly) and makes it possible to forecast the dynamics of income and costs by segments and geo.

Prioritization of business directions was another area of our assistance. We provided tools to track self-sufficiency, double-check the correctness of their analytics, and prioritize efforts in core areas. Thus startup teams now understand what to focus on to boost profits and efficiency, and which activities to avoid to utilize financial and human resources effectively.

And, of course, the focus of our help was to help startups enter international markets. We helped the startups conduct market research and develop strategies for product adaptation, new sales funnels, and other areas.

If you could change one thing about the ecosystem for the better, what would it be?
There’s still a big problem with Ukrainian institutions. We need to improve legislation, eradicate unfair play and bribery, and reform our courts. Speaking of mentality, we need to get rid of the misconception that only very unfair or very rich people can create a successful business and that it’s a shame to make mistakes. By developing startup culture, educating startup founders, and exchanging experiences between entrepreneurs, we can drive the industry forward and make it more efficient.

Where do you see the ecosystem in the next 12 months – 5 years?
It is hard to plan for such a period of time, as the most important issue now is the end of the war. Now, all people and businesses have one task – to survive. We cannot think about building an ecosystem in the future without economic and political stability in the present. However, I’m sure that when the war is over, there will be no more excuses to prevent young Ukrainians from building a business, because we have successful cases of startups working even under such extreme conditions.

In addition, many Ukrainian startups have already proven their resilience and performance, even with limited resources. It gives a huge advantage to the Ukrainian ecosystem in the future.

And finally, since the beginning of the war, Ukrainians have proven that the level of digital adoption skills in our country is huge. We learned to use Starlinks in no time, a lot of people learned to use crypto to raise money for charitable initiatives, we learned to use Diia app instead of passports and other documents and vote for important causes in the app. I hope this trend will continue after the war ends.

What are the most exciting startups coming out of Ukraine or started by Ukrainian founders?
Ukraine has a lot of startups to be proud of. For example, one of our portfolio companies, Allset, a marketplace connecting restaurants and local diners for everyday dining that is fast, easy, and healthy, attracted investment from Andreessen Horowitz and other prominent VC firms. Another portfolio company, Awesomic, a platform that matches designers with their clients, raised a round from Y Combinator, Pioneer Fund, as well as business angels Ragnar Saas (Pipedrive), Michael Siebel (CEO YC) and James Park (FitBit).

A very inspiring experience also comes from Influ2, a person-based advertising platform that is one of Forbes Ukraine’s Top-30 startups operating in the US market. Another cool product is Let’s Enhance, a platform that automatically enhances images for personal and business needs. Also worth mentioning here is a promising startup Legal Nodes, which connects founders with multiple legal professionals. This list could go on for a long time.

What startups from your portfolio are you most excited about?
I really admire the progress of the Estonian startup 99math – an EdTech startup that uses gaming techniques to teach math. I can also highlight a logistics startup Cargofy, Fintech Farm – a company that launches mobile-only banks on different markets, Hackernoon – a UGC-driven online media.

And from your anti-portfolio that you wish you had invested in?
Since I am a big fan of the movie industry, I really like Ukrainian Respeecher – AI-based voice-cloning startup, which works with Hollywood movie studios. Also there was a Polish startup inStreamly – a connecting platform for streamers and brands. Unfortunately, the startup did not pass our investment committee’s check in 2021, but they seem to be doing really well in 2022.

What advice would you give to startup founders in this unique moment in history?
First, when there’s a problem, don’t wait until the last moment, but act as soon as possible. Timing is the core value for startups. The sooner the founder admits there is a problem and comes to her investor, the more likely it is to be solved with minimal losses and stress.

Secondly, start fundraising as early as possible – 5-6 months is the optimal time frame to raise funding in 2022. I also think startups should stop wasting time on “perfect” presentations. Just imagine! The team spends 1-2 months creating a presentation and getting bogged down with design, instead of spending that time improving the product and talking to investors. The content of your presentation is more important than its design and euphemisms.

And third, work on your online presence. You don’t have to invest a lot of time in social media, but polishing your LinkedIn, Twitter, Crunchbase, Dealbook is important to be more visible online.

What’s next for Flyer One Ventures and Elena?
The main focus of Flyer One Ventures now is to develop a community and startup ecosystem in Ukraine, to invest efforts into the education of entrepreneurs, and network. Our goal is to become one of the most active and successful VC firms investing in the CEE founders.

My plans are closely aligned with F1V’s plans. In the near future, I will be involved in new deals, fund’s PR and portfolio companies, educational content for start-ups, mentorship and networking.

What’s the best way for people to stay updated with the latest from you?
I am constantly sharing news on Linkedin and Twitter. I also recommend subscribing to Flyer One Ventures’ LinkedIn and checking out our blog to keep up with VC industry trends and our latest updates.

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