New York-headquartered ffVC is not just another American fund with a foot in Europe. It’s the first one to open its first European office not in London, but in Warsaw, due to its strong belief in the potential of CEE. So much the case, it recently announced the raise of a $50 million fund aimed at Ukrainian entrepreneurs and startups. We chat to Mariusz Adamski, ffVC Partner since 2019, about his story, the fund and the CEE startup world.
How did ffVC start, and how did you become involved?
ffVC was founded by John Frankel (ex-Goldman Sachs) in 2008 after his angel investments in several startups in previous years. It was one of the first VC firms in the New York area significantly contributing to the development of the local ecosystem
I connected to John through a mutual friend who used to work at Goldman Sachs and convinced John to combine forces and expend to CEE. It was fantastic idea given the lack of presence from other US based funds in the region, combined with the potential of the CEE in the long term. This is something very similar to what ffVC saw in 2008 in NYC.
It made a lot of sense to combine my local knowledge of CEE/Poland and the tremendous knowledge and experience at ffVC in New York.
I successfully raised our first core fund focused on CEE, recruited the team, and established operations under the ffVC brand in Warsaw. Currently we have 7 investment professionals in Warsaw that work closely with the NYC office in terms of sourcing the best investments in CEE. And, after our investment, we help our portfolio companies with expanding to the US.
What were you doing previous to joining ffVC?
I started my career in management consulting on Wall Street, then moved to one of the largest activist hedge funds in NYC (Pershing Square Capital Management, managed by Bill Ackman).
In 2015, I realized that wanted to move back to Poland, and so I started my path in venture capital.
Why did ffVC choose Warsaw over London, Paris or Berlin?
We see several advantages in CEE region that positively impact CoC returns for our LPs:
- CEE software developers are best-in-class professionals (confirmed by many rankings e.g. SkillValue) with much more competitive financial expectations vs. their international peers
- Higher capital efficiency supported by still relatively lower cost base and the entrepreneurial spirit of the founders
- Injection of public and European funds
- CEE markets are still underpenetrated in terms of VC funding
How would you characterise the Polish startup ecosystem?
Young and promising. We see a lot of similarities to the Baltic countries a few years ago. The dynamic expansion of the VC market only started in 2019 and is expected to continue over the next years.
Entrepreneurial recycling is kicking off, creating a flywheel effect for the whole VC ecosystem and providing an inflow of talent.
What’s currently missing that you wish would improve?
One strong success story. Estonia had Skype, Poland is still waiting for its global growth story. That would attract even more talent to the ecosystem.
Where do you see Polish and CEE startups in the next 10-20 years?
For sure we will see a few global players who will successfully compete with international competitors. Some other players will cooperate with global leaders and corporations supporting their digitalization efforts and innovations.
And what about the CEE founder?
Founders are still relatively young but learning extremely fast. We know that founders are very talented and very capital efficient (can build the products / tech stacks for cheaper and faster than in US) in CEE.
We believe that we will see plenty of unicorns that will emerge in the coming years and even more founders that will start their own startups (talent that will leave more mature business to start their own startups).
Could you tell us about your European portfolio – what type of startups are you investing in?
We are sector agnostic, but we try to select startups where we can bring value from day one. We look at scalability and international potential. CEE markets are too small to create unicorn that has presence only here. We look for big ideas and founders that are not afraid of moving to US and competing there
What verticals are you most excited about?
Fintech, insurtech, cybersecurity, technology infrastructure, gaming infrastructure. We are increasingly more interested in Web3 and Quantum Computing.
Have you drawn any comparisons between ffVC’s experiences in New York and Warsaw?
We are one brand with the same values and standards. We have evolved since 2008, learned from our prior mistakes and leveraging the knowledge not to make the same mistakes twice. It is a huge benefit for us as to be global brand – we can analyze and compare trends in US and Europe. This gives us completive edge in comparison to local players in CEE.
What do you look for in a founding team when being pitched?
Three main things. First, hard skills (experience, market knowledge and network). Second, long term commitment and ambitions to create a unicorn-size startup. And third, the ability to scale up and grow as founders (coachable and eager for feedback).
Why should startups seek to be backed by ffVC? What’s different from other early stage VCs in the region?
We are the only VC firm with an American pedigree in the region. We strongly support our portfolio companies in international expansion especially in the US. We have huge network and act as a bridge between CEE and the US.
By working closely with founders, ffVC companies are 3 times more likely to raise a Series A and 5 times more likely to raise a Series B.
We also understand and experienced the whole startup investment cycle including exits. Most of the VC in Europe are still before these experiences.
What’s next for Mariusz Adamski and ffVC?
VC is not a job, it’s a lifestyle. You don’t change your lifestyle frequently and I love what I do. We are planning on raising new funds that will focus on CEE and Ukraine. Hopefully soon we will share another major announcement.
What is the best way for people to stay updated with your work?
LinkedIn or email. I am happy to connect and share of my knowledge with anyone that is interested in starting their own business.
For more on ffVC, check out the recent euvc podcast episode with the participation of founding partner John Frankel and partner Maciej Skarul.