Raising your first venture capital fund is a bit like getting your first job — you need experience and a track record to get the job, but everyone hiring only wants to see those who already got the experience and a track record. As such, Change Ventures would never have happened if it was not for our American partners Harry Huge and Edward Steiner who contributed not only their time and money but also their personal connections to make the fund possible.
Retrospectively, everything looks much simpler and linear. But in our case, there actually were concrete steps that played a role in the genesis of the fund. Rait and I had together founded Solon Partners as an advisory and angel investment boutique. We got to work daily with exciting Estonian and Finnish startups like Fortumo, Pipedrive, PiBond, Tahe Outdoors and others with their fundraising and M&A growth. We were founders of the Estonian Business Angels Network (EstBan); Venture Capital Association (EstVCA); and served as a jury member and mentor at Prototron Fund; Ajujaht; Startup Wise Guys Accelerator and supported other events in the ecosystem. We were also investing in some entrepreneurial projects like nodeSWAT, a specialty software solutions provider, and even worked on some turn-around deals. At the same time, we felt that we could further help the amazing Baltic founders with a more established approach, such as a venture capital fund. As Seneca once wisely said, “Luck is what happens when preparation meets opportunity”. For us, getting lucky meant meeting Harry Huge.
Harry Huge, the Honorary Consul for Estonia in South Carolina has a long history of helping Estonia. He helped Estonia regain its independence and then continued to build bridges between Estonia and the United States by supporting the top two universities in Estonia with donations to TalTech Mectory and Prototron and University of Tartu Startup Lab. Harry & Eba Huge Trust has also funded the NGAL program now in its fifth year providing scholarships and prizes for hundreds of student entrepreneurs from the University of Tartu and Tallinn University of Technology in Estonia, Nebraska Wesleyan University in Lincoln, Nebraska, and the College of Charleston and The Citadel in Charleston, South Carolina.
Harry was interested in building business bridges between Estonia and the United States, something that would make a major impact both financially and socially. So he recruited his friend and trusted colleague Edward Steiner to help and come visit Estonia in person. Ed is a partner at Squire, Patton Boggs, with +30 years of experience advising the top US and International clients in corporate, securities and finance law. Ed really liked the entrepreneurial drive of the Baltic founders and got hooked on the Estonian black rye bread — Leib. Ed was a great addition to the team adding his practical transactional experience and no-nonsense pragmatism to the mix.
We met Harry and Ed in Tallinn and the plan for establishing a venture fund that would invest in ambitious Estonian, Latvian and Lithuanian founders was born. It would be an American VC with US investors investing in pre-seed and seed-stage startups in the Baltics — something no one had done before.
To cover startup deal-flow and provide the best support for our portfolio companies in all of the Baltic states, we needed boots on the ground in all three countries. This led us to team up with the most experienced and accomplished entrepreneur we knew in Latvia — Andris Berzins. Andris was one of the founders of TechHub Riga, Latvian Startup Association, Latvian Business Angels Network and the TechChill conference. He had also played a key role in several exciting startups that had large exits to Black&Decker and OpenTable. His hands-on experience with enterprise sales, scaling startups and his deep network of contacts that also came aboard as our Venture Partners in Lithuania completed our team. Together we launched Change Ventures Fund I in September 2017.
Looking back, it has been a humbling journey, filled with excitement and challenges that come with startup investments.
Yrjö and Rait, Investment Partners at Change Ventures