How to Get the Most Out of Venture Capital Investments: Advice from Dmitry Chikhachev

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No one is immune to mistakes.
There are inevitably risks in the venture capital investment process, and even experienced players have to deal with unsuccessful projects. Runa Capital faced a similar situation when funding online travel booking service Travelmenu. By 2011, the startup had invested $1.6 million, but the business failed to achieve success. In 2013, the company decided to sell its technology and close down, which resulted in a loss of $4.6 million.


Travelmenu website in 2013
Another unsuccessful investment by Runa Capital was in the mobile app Talkbits, a service for communicating via voice messages. The fund invested $800,000 in the first stage, and then invested an additional $1.3 million between 2011 and 2013. By 2013, the total investment of $2.1 million was irretrievably lost.

Despite these failures, Runa Capital learned important lessons and improved its approach to project evaluation. Venture investing is inherently high-risk, and even experienced players are not immune to losses. The founders identified success factors — a scrupulous company audit and timely adjustments to the investment strategy.

In the process of venture investment, it is critical to follow a well-thought-out strategy and adhere to clear criteria for selecting projects. According to expert and co-founder of Runa Capital Dmitry Chikhachev, it is necessary to invest in companies that operate in sectors that are well known and understandable to the investor.

Chikhachev emphasizes that the fund's portfolio should include projects from areas in which the team has deep expertise and understanding of the market specifics. In the case of Runa Capital, one of these areas was lebanon phone number list software, in which the founders had significant experience and competencies.

Dmitry Chikhachev also notes that successful venture companies receive most of their profits from a very small number of transactions. This emphasizes the importance of careful selection of investment objects.

The founder of Runa Capital highlights several specific factors that influence the prospects of a startup:

The project solves large-scale problems and pain points of the market.
The project has the potential to grow into a $1 billion company or more.
The product is in line with the market and this is confirmed by the high average return rate (ARR). An ARR of $1 million is considered a good indicator.
Exceptions may be DeepTech startups, but they still need to demonstrate other competitive advantages, such as a strong technology base, the ability to use open source, active users, etc.

As Runa Capital's experience has shown, focusing on projects from familiar industries, carefully checking teams and technologies, and focusing on scalable solutions are the most important components of a successful venture investment strategy.