Europe’s Angel of The Year Makes New Investments in San Franscisco and Berlin

dusan

Warren Konkel’s crowd funding platform for open source software projects was put on hold for years, until he joined a Geeks On A Plane trip to Berlin and eastern Europe and met Dusan Stojanovic, Europe’s 2013 Angel of the Year. On July 16 Konkel’s San Francisco-based company, Bountysource announced that it had raised $1.1 million from True Global Ventures, a super angel fund founded by Stojanovic, a peripatetic angel investor who backs start-ups on three continents.

Bountysource is True Global Ventures’ second investment  in the past week. On July 9 the fund, which now includes more than 30 entrepreneurs- turned- super angel investors, announced an investment in Berlin-based Stryking Entertainment.  The German start-up was co-founded by Dirk Weyel, who previously cofounded Frogster Interactive, a Berlin-based games company which grew into a leading publisher of Massively Multiplayer Online Games in Europe and is publicly listed at the Frankfurt Stock Exchange.

True Global Ventures exclusively invests in serial entrepreneurs with global ambitions targeting the Internet, mobile and software sectors in Berlin, Stockholm, Paris, the San Francisco Bay area, New York, Shanghai, Beijing and Hong Kong. And, it only accepts investors with a track record. “Our criteria to get somebody in as an investor is pretty strict – you have to have had at least one exit as a an entrepreneur and have done at least two angel investments,” says Stojanovic.

Stojanovic, who speaks six languages, is an example of a new breed of seed investor specializing in cross border deals. While angels traditionally only back local companies so that they can be hands on, True Global Ventures model  concentrates its investments in eight farflung cities with  investors on the ground.  Stojanovic, who carries a Swedish passport and is married to a French woman, spends time in all of the locations.

The strategy appears to be paying off:  In May Stojanovic was named 2013 Angel of the Year by the European Trade Association for Business Angels, Seed Funds and other Early Stage Market Players (EBAN), a recognition of his track record, including three exits concluded between June 27 and July 2 last year: two in France and one in Sweden. The exits include ProwebCE, a French company specializing in enterprise software and e-commerce solutions for employee subsidy programs (which announced on June 27 a €36 million recapitalization led by Edmond de Rothschild Investment Partners and Iris Capital with additional financing from corporate alternative investment fund Edenred), the June 28 sale of France’s secure payment technologies company 4G Secure to SCCP Group in Singapore for an undisclosed sumand the July 2 sale for an undisclosed sum of Swedish online payments company Payson to Svea Ekonomi AB.   

Other notable investments made by True Global Ventures include the U.S.’s SharesPost, which in March announced a joint venture with NASDAQ to establish a marketplace called NASDAQ Private Market (NPM) for private growth companies, which is scheduled to launch this autumn.  The venture combines NASDAQ’s OMX’s market and operating expertise with SharesPost’s web-based platform. NASDAQ will retain a majority stake in the venture, specific terms of the joint venture were not disclosed.

Some of the money from True Global Ventures’ exit and the joint venture with NASDAQ has been invested into a True Venture 2 fund.  Bountysource, True Fund 2’s second investment, bills itself as the first crowdfunding platform  dedicated to supporting open-source software. The company has raised a $1.1 million seed round, the sum of True Global Ventures’  investment and money from Bountysource founder Konkel, the first employee at LivingSocial and a longtime entrepreneur.

 Bountysource  aims to provide  a community-friendly way for open source projects to get funding and support. The tech industry relies heavily on open-source projects and tools, yet  developers struggle to get money and attract  volunteers to help with the day-to-day work required to keep projects running, says the company. Bountysource is trying to solve this problem by standardizing the funding cycle and creating a vibrant marketplace of   developers and backers.

 The model incentivizes users to support their favorite open-source projects through monetary donations or completing  bounties connected to a project. The company hopes to encourage users of open source products to crowd fund the creation of features they would like to see added, Konkel said in an interview with Informilo.

 Bountysource is also working with corporate sponsors, like Adobe and Uber as their companies’ engineering infrastructure relies in part on open source products.  The bounty model allows developers to create incentives for bug fixes, feature requests, and other items by offering a  monetary reward or “bounty.” It integrates with most open-source development  services, including GitHub, Google Code, Bugzilla, and Launchpad, and runs an IRC channel– #bountysource on Freenode – for the community to chat directly with the Bountysource  team.

“Rather than having your employees spend time on an open source project companies can put a few thousands dollars in a budget to make their developers more efficient. When they run into a bug they can, for example, put a few hundred dollars down on Bountysource and it will be fixed,” Konkel says.

Through Bountysource, developers can also create donation-based crowdfunding initiatives to fund specific projects in the same way that money is raised on Kickstarter. The differentiator is that the site is focused only on open source and it offers an added bonus: a fulfillment service that manages  printing and  distribution of donation-based gifts such as T-shirts and stickers. Payments are processed through Google  Wallet or PayPal.

Bountysource was originally founded in 2004 by Konkel and David Rappo, previously a producer on handheld and mobile video games such as Guitar Hero, Transformers, and  Skylanders. Konkel and Rappo reunited in 2013 to restart Bountysource as the popularity of  crowdfunding models and the conversation around open-source funding hit a tipping point.The site has already attracted more than 9,000 developers and is growing rapidly as the tech community starts to adopt Bountysource’s  community-driven funding model.

The goal is to make Bountysource “a giant marketplace for software, with developers all over the world logging in to figure out how they make money today,” says Konkel. “We see this as a platform that will compete with jobs with regular salaries or contract work.”

The timing for scaling up Bountysource is perfect considering the explosive growth in both crowdfunding and open-source, said Stojanovic.

The explosive growth of free-to-play games and the need to better monetize them convinced True Global Ventures to also invest in Berlin’s Stryking Entertainment , says Stojanovic.  The company  raised €1.3 million euros in a first funding round that included capital from True Global Ventures and project funding by Investitionsbank (IBB) Berlin.

Stryking Entertainment’s technology allows developers and publishers of free-to-play games to sell real products next to virtual goods within their in-game shops and to integrate consumer brands as part of the game play.. For example, along with allowing a user to transfer their real money into virtual goods, a store connected to a racing game could package in a DVD of the action movie Fast and Furious or a football game could sell jerseys with particular players’ numbers,  Weyel, founder and CEO of Stryking Entertainment, said in an interview with Informilo.

Stryking Entertainment is already serving as a marketing partner and co-publisher for the free-to-play games I am Playr and Auto Club Revolution in German-speaking countries. I am Playr is a football game that lets the user play the life of a professional footballer, both on and off the pitch, and already has established brand partnerships with consumer brands such as Nike, Red Bull and Gillette. Auto Club Revolution, a racing game with social media features, collaborates with more than 100 car brands worldwide. In addition to helping sell physical products Stryking also provides delivery and logistics as well as other necessary after- sale services.The July 2 signing of a deal with I am Playr gives Stryking King a strong start, says Stojanovic.

Stojanovic, who worked for GE Capital and was a member of the management board and a shareholder in France’s Monabanq, before selling his shares and using the money to become an angel investor, says luck is key to success in investing but “luck tends to be the result of hard work.” You have to bet on the right entrepreneur, know how to network to identify buyers and take the cash when there is an offer on the table, he says.

Betting on Europe – and on France – has turned out to be a good gamble. France is home to very successful entrepreneurs, says Stojanovic, pointing to the founders of vente-privee.com, Meetic and Price Minister, all of whom are now plowing money into French start-ups. While French government policy is a negative, that makes French entrepreneurs “more eager to move part of the company outside of France and that is where True Global Ventures comes in,” he says.

And while there is plenty of buzz around Stockholm and Berlin, in terms of “a absolute numbers of pure serial entrepreneurs prepared to really invest their money I can't say I find more in Stockholm and Berlin than in Paris,” says Stojanovic. “ Size matters and these things can’t be wiped away by bad  government policy. We are not going to give up on Paris,” he says.  “Berlin might be more exciting but it is smaller and still very, very new.  It seems to be vibrant and we do see a lot of quality so we believe in the future of Berlin.”  As for Sweden, the success of Spotify and Klarna is prompting more entrepreneurs to think global so Stojanovic says he is bullish on that market as well.

 

 

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