It was 10 p.m. in Beijing, Shanghai and Hong Kong, 4 p.m. Central European Time, 10 a.m. on the east coast of the U.S. and 7 p.m. in Silicon Valley when Berlin-based Stryking Entertainment, which helps gaming companies blend the virtual and physical worlds, held its monthly meeting on October 20th with its 30-plus angel investors.Although nearly everyone else dialed in from cities in Asia, Europe and the U.S. Dušan Stojanović, a peripatetic super angel who backs start-ups on three continents, made a point of being there in person. It was the start of a typically hectic week for Stojanović: Monday he was in Berlin. Tuesday in Stockholm, on Wednesday afternoon he boarded a plane to Beijing, and on Saturday he headed for Singapore.
Stojanović is the founder of True Global Ventures, which exclusively invests in experienced entrepreneurs and business people with global ambitions targeting the Internet, mobile and software sectors in Stockholm, Berlin, Paris, the San Francisco Bay area, New York, Shanghai, Beijing and Hong Kong. The super-angel fund only accepts investors with a track record. “Our criteria to get somebody in as an investor are pretty strict — you have to have had at least one exit as an entrepreneur and have done at least two angel investments,” says Stojanović.
Stojanović, a native of Sweden 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 concentrates its investments in eight far-flung cities with investors on the ground. Stojanović, who maintains his principal residence in Stockholm, spends time in all of the locations.
The strategy appears to be paying off: in May Stojanović, a scheduled speaker at SIME in Stockholm, 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 27th and July 2nd in 2012: 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 27th a €36 million recapitalization led by Edmond de Rothschild Investment Partners and Iris Capital with additional financing from employee benefits management company Edenred);
· the June 28th sale of France’s secure payment technologies company 4G SECURE to SCCP Group in Singapore for an undisclosed sum;
· and the July 2nd 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 by year’s end. The venture combines NASDAQ’s OMX 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 Global Ventures 2 fund. The first investment by Fund 2 was in Stryking Entertainment, a German start-up co-founded by Dirk Weyel, who previously co-founded Frogster Interactive, a Berlin-based games company which grew into a leading publisher of massively multiplayer online games in Europe and is publicly listed on the Frankfurt Stock Exchange.
The explosive growth of free-to-play games and the need to better monetize them convinced True Global Ventures to invest in Stryking Entertainment , says Stojanović. The company raised €1.3 million in a first funding round in July that included capital from True Global Ventures and the founders plus soft loan funding from 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 users 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, says Weyel, founder and CEO of Stryking Entertainment.
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 2nd signing of a deal with I AM PLAYR gives Stryking a strong start, says Stojanović.
True Global Ventures 2’s second investment, Bountysource, bills itself as the first crowdfunding platform dedicated to supporting open-source software. The company, which is based in Silicon Valley, was put on hold for years until its founders joined a Geeks on a Plane trip to Berlin and eastern Europe and met Stojanović. In July Bountysource raised a $1.1 million seed round, the sum of True Global Ventures 2’s investment and money from Bountysource founder Warren Konkel, the first employee at LivingSocial and a long-time 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 by 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, says Konkel.
Bountysource is also working with corporate sponsors like Adobe and start-ups like 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, says Stojanović.
Stojanović, 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, be very active in making introductions for the entrepreneur, especially on the sales side, know how to network to identify buyers and take the cash when there is an offer on the table,” he says. He believes that his success to date is also due to the fact that he works full-time as an investor, invests in relatively few companies, and is very active in the companies he invests in early on, providing them with loads of introductions and concrete support. To date, none of the companies he has invested in has gone bust.
Betting on Europe has turned out to be a good gamble. In Sweden, payments have long been a strength. Stojanović has made two investments and had two exits in that space: Payson and Dibs.se, an e-payments service provider that went public in 2009 on Stockholm’s First North exchange, an alternative market operated by different exchanges within NASDAQ OMX.
The success of Swedish companies Spotify and Klarna is prompting more entrepreneurs to think global, so Stojanović says he is bullish on the Swedish market. True Global Ventures’ presence in Stockholm is significantly strengthened by partner Carl Johan Grandison, the founder of several companies and the first employee and a former regional director at TradeDoubler, a Stockholm-based Internet marketing company, says Stojanović. Just as PayPal’s former employees went on to create many other successful Silicon Valley start-ups TradeDoubler’s former executives are playing a key role in both creating and investing in the next generation of companies in Stockholm. (See the story on Stockholm’s start-up scene on pages X and X).
France is also home to very successful entrepreneurs, says Stojanović, 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.
“In terms of 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 Stojanović. “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 also holds much promise as a hub. “It might be seen as more exciting (than Paris or Stockholm) but it is still very, very new. That said, it is vibrant and we do see a lot of quality so we believe in the future of Berlin.”
At A Glance
Dušan Stojanović, Europe’s Angel Investor Of The Year
Born: July 23, 1969
Birthplace: Borås, Sweden
Place of principal residence now: Stockholm
Number of languages spoken: six
Expertise: e-finance/e-payments/ e-commerce
Number of start-ups he has invested in so far: 14 direct
Number of exits: 5
Number of companies closed down: 0 (so far)
Number of air miles logged: Uses low-cost airlines like Ryanair, Norwegian and Southwest which normally do not give air miles
Passion: Donated some of his exit money and was the largest individual contributor to save the last Tesla Lab in Long Island, New York and actively helps the non-profit Tesla Science Center
Fun Fact: Distantly related to Nikola Tesla
Wish: Wants every member of Parliament (or Congress) in Europe, Asia and North America to make a €100 direct investment in a start-up