You need to look at the team and its leader to make sure they are excited about the project. They also need to have the skills necessary for the project to succeed.
As part of my series about “5 Things I Need To See Before Making A VC Investment” I had the pleasure of interviewing Vlad Krishop. Krishtop is an investor and serial entrepreneur. He is the founder and CEO of a conglomerate that includes the investment company “Second Working District” and the IT company ”Konstruktor Service”. As a venture capitalist, he funded a number of start-ups that focus on areas such as AI, AR, FinTech, and Healthcare IT. According to various expert estimates, Krishtop’s net worth exceeds $2 billion. Krishtop is originally from Russia and, while he was conducting his business there, was ranked by Russian media among the most successful businessmen in Russia. Since 2011, Krishtop has been living in the U.S., working on various projects in Silicon Valley.
Thank you so much for joining us, Vlad! What is your “backstory”?
I have been an entrepreneur since childhood. I started my first enterprise when I was back in middle school, with my classmates as my first employees. My first businesses included such enterprises as operating a video salon, reselling office supplies and trading stock.
Some time after graduating from high school, I opened a company that two years later ended up being the largest IT-business in my native town, Uralsk. I continued trading stock and also started investing in real estate. These activities allowed me to make my first $1M by the time I was 21 years old.
My businesses kept expanding rapidly nationally and then internationally. In 2011, I moved my businesses to Silicon Valley.
In the years 2014–2016, I invested 10M into startups, and I am currently executing a 3-year program to invest 100M into U.S. startups.
Can you share a story of your most successful Angel or VC investment? What was the most important lesson you learned from it?
The most successful VC investment I’ve ever made was probably my investment in the creative environment Konstruktor. This platform ended up having a million users and received an award as one of the top five startups of the year in 2015 according to Bryant University. It was also the hardest project I’ve ever worked on, since I didn’t anticipate how much work creating such a platform would require.
Hence the lesson: you should never underestimate the amount of effort it takes to make from scratch such a large-scale web-based project. It might be better to invest in an existing service rather than building the whole thing yourself. However, that project was a great learning experience, and it has led to our launching a second version of this platform in 2020.
Can you share a story of an Angel or VC funding failure of yours? What lessons did you learn from it?
I wouldn’t consider any of my venture investments a failure. I have a very strong finance and analytics department who analyzes all risks and helps me make the best possible decisions. All of my investments have paid off eventually, even though some of them took longer than others to reach their full potential. For example, there was an agricultural company that we invested into. It wasn’t very profitable for some time. However, recently we were contacted by a very large client that offered for us to work on one of their projects. That agricultural company of ours immediately became a great asset because we were able to use it as a platform in that project. So, all of our investments pay off eventually; it’s just that in some cases we need to wait longer.
The important advantage for me was that I never relied on outside capital for any of my projects. I always funded all of them out of my own pocket. That way, there was no need for me to pay off any debts, and I never had any risk of bankruptcy.
Is there a company that you turned down but now regret having done so? Can you share the story? What lessons did you learn from that experience?
I never regret anything like that because if I didn’t invest in a project, there was a reason for my not doing so, and at that point I wasn’t ready to make the investment. Perhaps I lacked some skills or enough money to make the investment, so it simply wasn’t meant to be. I don’t think that’s something I should regret.
How have you used your success to bring about good in the world?
In terms of giving back, my choice is always to help talented youth. A few years ago, I founded a charity fund, Krishtop Foundation, the goal of which is to support smart, motivated people who simply lack opportunities because of their environment (poverty, corruption and such). My fund offers the financial support they need to be able to fulfill their dreams. We also provide these young people with training and job opportunities. I myself grew up in a small poor town, so I have experienced these struggles and can relate to them.
What are your “5 things I need to see before making a VC investment” and what is the rationale behind them? Please share a story or an example for each.
To be honest, I think that there are only two things you truly need to see. Everything else seems really minor to me in comparison to them.
- You need to look at the team and its leader to make sure they are excited about the project. They also need to have the skills necessary for the project to succeed.
- You have to look at all aspects of the business itself and check its numbers. Only then will you know whether you truly believe that this idea will work.
You have a great deal of influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
I am actually currently working on creating such a movement. As I mentioned before, I am currently developing the second version of the creative environment Konstruktor Portal, and it has as one of its main objectives to help young people who are currently struggling to fulfill their professional goals. It will provide talented people living all over the world a creative environment and the tools they need for professional growth. I think that there is huge potential in talented people who live in remote areas, and I hope to be able to provide them an opportunity to unlock this potential so that they can change the world for the better.
Some of the biggest names in business, VC funding, sports, and entertainment read this column. Is there a person in the world, or in the U.S., with whom you would love to have a private breakfast or lunch, and why? He or she might see this. 🙂
I would be honored to have lunch with Peter Thiel. I have a great deal of respect for him, and he has inspired me a lot. I think that he is more than an entrepreneur — he is a philosopher who has changed the world. I also think that he is probably one of the most underestimated leaders in Silicon Valley.
This was really meaningful! Thank you so much for your time.