Tl;dr: This is the Early Game Ventures investment thesis.
Early Game Ventures (EGV) is an early-stage venture capital firm investing in startups that jumpstart new industries in the emerging markets of Europe.
Their philosophy is quite straightforward: they invest at the earliest stages in companies whose founders have vested interests, are coachable and address big markets. If the opportunity is real, they prefer to be the first institutional investor in such startups.
Infrastructure for innovation
The systemic “chicken and egg problem” in emerging markets and the role of a VC in building future ecosystems
The root of all evil
Vicious cycles are endemic in emerging ecosystems — they are the byproduct of systemic deficiencies and make it difficult or even impossible for the emerging ecosystem to grow and develop. Example of such a vicious cycle at work in Central and Eastern Europe: the adoption of electric vehicles (EVs) is slowed down by the lack of the charging infrastructure; conversely, the charging infrastructure is not being built because of the lack of the EVs to use it.
Because of their systemic origin, breaking such vicious cycles is a capital-intensive and a long-term endeavor — the kind of task a VC fund is both qualified and responsible to assume.
On a high note — the root of all evil is where the promise of venture returns lies.
A (technological) leap of faith
Emerging ecosystems are strong enough to leapfrog existing technologies and adopt the solutions of the future. It happened in the past (see LTE adoption in Africa/India leapfrogging traditional landlines) giving birth to a breed of companies that created their own markets. These startups are the backbone of the future ecosystem populated by dependent/client third parties.
The thesis: invest in startups that build the infrastructure for innovation and jumpstart new industries by breaking vicious cycles.
Examples of target industries and their needed infrastructure of innovation:
Mobility — needs a continent-wide network of charging stations (and open source data) to power the future of electric mobility.
Vicious cycle: EVs adoption vs. charging infrastructure (as described above).
Smart cities — need data collection systems to spawn and feed third-party apps.
Vicious cycle: public utility apps vs. structured data providers.
Workspace — needs office space affordable for companies of all sizes, where location-centric communities to grow and cross-pollination to happen.
Vicious cycle: affordable rent vs expensive real-estate development.
e-commerce — needs end-to-end order fulfillment services (including shipping software, integrations, and logistics).
Vicious cycle: small size online retailers vs. complexity of fulfillment.
Advertising — needs the self-service model applied to all advertising channels in order to democratize access and reduce costs (especially for SMBs).
Vicious cycle: high complexity/high costs of the professional services vs. small marketing budgets
Solution/example: Facebook Ads, Google AdWords
Economy of trust — needs utility DApps that make life easier and replace (public) legacy systems; leapfrogging through blockchain.
Vicious cycle: middlemen vs. end beneficiary.
Insect protein — needs supplies, knowledge centers and distribution platforms for insect protein.
Vicious cycle: new proteins adoption vs mass production capabilities.
Geography — regional ambitions
We look to add a regional dimension to the ideas that we invest in — start from Romania and expand across the borders in CEE.
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