The European VC-Funded Startup Guide: Create and Manage a Startup in Eastern Europe

Explore the startup landscape of East European countries and review the differences in the concepts of limited liability companies and company equity in approaching the market. This quick reference guide is structured around the primary author, Ivan Voras, with additional chapters written by guest collaborators. Chapters are concise and focus on ways to overcome the various obstacles start-ups may face. You'll benefit from regionally relevant advice on finding problems worth solving as a startup, how to hire people, how to raise investment rounds, and how to find and communicate with investors. Eastern Europe has become a region of fast growth after years of mismanagement and stagnation, and it has become the origin of promising startups. The last couple of years have also seen the rise in the number of local VCs who are attempting to address this market, as well as local incubators and accelerators. But there’s a problem: the vast majority of educational material available in books and online are written from the perspective of the US market and economy, and are not directly applicable in the complicated nuances of Eastern Europe. The European VC-Funded Startup Guide does not pull punches to highlight the difficulties involved in starting up from this region, but also provides workarounds and advice on how you can overcome them. What You'll Learn Create and manage an early stage startup in East European countries Run a young company, hire initial people, and raise investments Understand venture capitalist funds, which ones to avoid, and what to do with the early investment once you get it Who This Book is For Novice startup founders in East European countries or more experienced professionals, such as investors and lawyers, interested in the startups in this part of the world. Table of Contents About the Author About the Contributors Acknowledgments Foreword by Bruno Balen (Cidrani) Introduction Chapter 1: Look Around You What’s So Special About Being a European Startup? We’re Not All Living in America! (Yet!) How Not to Be a Prophet in Your Village Choosing a Problem to Solve/Build Your Business On It’s All About the Gaps Service Businesses Need Not Apply What Type of Company Do You Need? The Corporate Veil Chapter 2: Guest Chapter: A Founder’s Guide Through the Legal Jungle Sharing and Protecting Ideas Great! You Have a Cofounder and Now You Need to Regulate Your Relationship When to Incorporate the Company How to Choose the Type of Legal Entity How to Take Investments Chapter 3: Setting Goals What’s Not a Startup? What’s a Stealth-Mode Startup? What Do Startups Do? Everyone Wants Recurring Revenue What’s a Successful Startup? Staying Afloat When Does a Startup Stop Being a Startup? How to Approach the Market The Lifecycle of a VC-Backed Company On Hedging Who Buys European Startups? Chapter 4: Guest Chapter: On the Franchise Model for Startups Why Franchise Your Concept Other Reasons Four Steps to a Successful Franchise Step 1: Create Something Successful, Profitable, and Scalable Step 2: Make It Desirable (to Entrepreneurs) Step 3: Work with an Expert Who Will Set Up Your Franchise Model Step 4: Start Saying “No” As Quickly As Possible What Are the Revenue Streams in a Franchise? A Summary Example When Does a Franchise Become Interesting to Investors and Potential Buyers? Summary: Focus on Internal Processes First Startups as Franchises Chapter 5: Getting Money Equity and the Cap Table Ways of Getting Money A Special Note about EU and Governmental Funds What Are Investors and What Do They Want? Types of Investors Investors Also Have Preferences How to Deal with VC Funds Finding Investors What to Ask Money For Red Flags in Investors What to Spend Money On What Is This Mysterious “Runway” Everyone Is Talking About? The Financial Lifecycle of a Typical VC-Backed Unicorn Startup Rules of the Game When Diligence Is Due The Eastern European Perspective on Company Shares How Can Founders Make Money? Chapter 6: Guest Chapter: On Startup Valuations (and Other Dark Stories) The 5W Rule Who? Where? What? When? Valuation The Term Sheet Conclusion Chapter 7: Your Company is the Average of Its Founders If You Need to Make Mistakes in Choosing Cofounders, Be Aware of Them in Advance Corporate Culture Is Made of Founders’ Habits Remote Work Is Like a Potent Spice. Use It Sparingly. On Transparency The Option Pool and Vesting Waiting for ESOP in Europe Chapter 8: Guest Chapter: Recruiting in a Startup Environment Recruiting Starts Well Before the Recruiting Actually Starts If You Talk the Talk, Walk the Walk Recruiting From Personal Channels No-Bullshit Job Descriptions Describe the Startup Describe the Position List Expectations of the Candidate Describe What the Startup Is Offering the Candidate Describe the Interview Process Communication with Candidates Task Before the Interview Interview Process Onboarding Feedback Loop Easy to Hire, Easy to Fire Stock Options Conclusion Chapter 9: Managing Money The Root of All Evil Time Is Money Reinvest Everything The Holy Grail of the EBITDA Margin On Growth Chapter 10: Get Your Product Out There Business Development Pricing Strategies Selling B2B vs. Selling B2C Growth Hacking Survival of the Most Tenacious Use ChatGPT and Other Content Generators Where You Can Chapter 11: The Big Exit Theory Keep Your Head On What If You Succeed? Building for an Exit Define “Win” Chapter 12: Find Your Replacement(s) Index