Cankut Durgun, Founding Partner at Aslanoba Capital. Series of interviews with investors in Turkiye n°11.

Imagine my surprise as Cankut Durgun told me he was living in Belgium till his 18th birthday. Although born in the US, the biggest part of his youth, he resided in Belgium, a nice place by the way, near Brussels. Don’t be mistaken, he is Turkish, single child of Turkish parents. It was very funny he could sum up television programs I knew like the channel 4TV broadcasting the Simpsons. He moved back to the States to join the university at the East Coast to follow Economics and Management Science at MIT in 2004. After finishing successfully at MIT he moved to the West Coast to undergo an MBA at Stanford University. No doubt a talent who was able to lay out a great foundation for his future. To make it even more amazing he starts explaining me Romulus Capital, a seed investor company he started with 2 partners. Krishna Gupta and Anant Chaturvedi are his partners at that time, friends he made during his time in Boston. So we are talking about 3 “boys” in their early 20’s, more specific 21 years old, whom decided to raise a fund of 1 million dollar from different investors. Friends, family, MIT alumni, all trusted them enough to hand over the green backs. Imagine this in Turkiye, or in any other more, let’s say, conservative country. In a short time they made 17 investments, small tickets as they positioned themselves as a seed fund, 1st round, tickets between 30.000 and 100.000 USD. Interesting is that they could also find 17 startups that trusted them and were interesting enough to invest in. When I asked the obvious question about trust and experience it was clear that he did not hear this for the first time. What struck me from the beginning of the interview is the kindness and the positive attitude. When I interview the more local Turkish investors they always have a more heavy hand, more weight, more sort of complaining. Cankut is totally the opposite. Next to the fact that he answered my mails within hours (average in Turkiye is 2 weeks, not kidding), he had that smile on from the first moment I met him. Each part of his story is followed by the, almost, excuse. “I was very lucky”. I guess that is true, but still, if you just sit in your sofa and watch TV, you will never know your level of luck that is preserved for you. Back to trust and experience.

According to Cankut, it comes all down to focus, dedication and a professional attitude. Of course while fundraising they met people scratching their hairs but they were themselves a great team and gave the attention it needs. They listened to the needs of the startups, were flexible about the investment instruments they used including direct equity deals and convertible notes, and always went for the first round. Their main aim was each time to help the startup forward after they decided it had potential. It is no secret that it is a learning for all of the stakeholders. Ending with a 30 years engineer career does not make you have all the answers, investing and helping a startup today, at the end of your career, where the whole context has changed. We are confronted with a rapid changing environment, so you make it up on the go anyway. Actually when I look at most Angel Networks in Turkiye, they seldom have a dedicated experienced team working fulltime for the acquisition by rolling their sleeves up. Most investors have a fulltime job, running a successful business, and rarely time and energy to really deep dive into the startups. Soit, as we say in French, they did it. Respect. On the other hand we need to emphasize also the whole startup is on one hand very young, and on the other, very old, just changed names, not the process. The biggest differentiator I guess is that technology nowadays became available to many people, easy and accessible and for sure the internet plays a big role here. Scale has always been important for investors, even during the industrial revolution, but from material it went into non-material, so scaling has now become a natural hockey stick icon.

In 2012 Romulus started its 2nd fund, this time 50 million dollars, with already 2 exits from the first one, Crocodoc and Gyft. Cankut was not involved in the 2nd fund. Remember 3 guys, 21 years old at the start, from MIT and Babson. When I asked what he saw as a predictor of success before investing in a startup, he answers with this interesting list: 1. Drive combined with a good team; 2. Luck and 3. Intellect. I did at this time 13 interviews and it is the first time somebody so clearly speaks out for luck. I remember 10 to 15 years ago in the business environment it was all about the window of opportunity, sounds more sophisticated than luck. At the end it means the same thing, as no one can predict that window as it depends on so many factors and you need to be in that place with the right offer, not your neighbor.

I guess a second big step in his life and career was meeting the girl he married later. She is Turkish, also a MIT graduate, and they decided to continue their lives in Istanbul. Interesting detail is that his parents in the meantime moved to Miami enjoying their retirement. The world is my village. To be able to also have a living, the 3 partners in Romulus in the beginning did part-time jobs for consulting companies like McKinsey and others. So moving to Turkiye was a big change for Cankut as he made the decision that he had to think of a family now. He met Hasan Aslanoba in 2013 through a mutual friend. The famous Aslanoba who started a blitz career in Turkiye and confronted the investor’s scene with a “showing balls”. At that moment Aslanoba already invested in around 15 startups and another roughly 10 already at due diligence status. In a week they decided to collaborate. It took Cankut 3 months to get familiar with all the investments done and the ones in the pipeline. When Cankut joined, the counter was already at roughly 25 investments. The result today is 41 in total, of which 26 are active, investments in Turkiye where they’re usually lead investors and 33 in total, of which 30 are active, investments in the US where their strategy is that of a co-investor. That makes 74 investments in 4 years time with an additional 4 fund investments. Asking about the differences between US and Turkiye Cankut points out to the availability of capital is much higher in the US than in Turkiye but he sees a positive evolution in Turkiye where more money will be put available. Secondly he confirms that the US has an advantage in high-tech startups in emerging fields like AI, robotics, and drones. For Turkey, Cankut suggested that there are opportunities in creating solutions to problems in more traditional sectors like agriculture. He is very driven by the impact the startup scene can make on society, from political to economical. Cankut loves to help in creating a sustainable environment for the good of society. Here again he underlines how fortunate he is that he can be part of this. Not bad for a 30 year old young man in my humble opinion. Also for Aslanoba the “social return” is important and one of his drives. What brings us to Taze Direkt. Aslanoba wrote in a public statement at the halt of the company that he took the responsibility on himself for the failure of the company. Grand. I couldn’t get an answer on why an investor that active with startups would lead a company. Seems pretty impossible to me to be successful in very different domains. What were the selection criteria for Aslanoba to invest? The market was the most important indicator combined with the idea but in time he shifted to put the team more in front. Here also Cankut refers to the fact that Aslanoba is a very humble man, always open to experience and learning. In that light his investments must also be seen as a learning at the start. We know how many investments he did but there is also the “how much money?”, to put it all in perspective. Until today the investments are 62.3 million USD in Turkish startups, 5.1 million USD in Funds and 7.0 million USD abroad. One man. Super Angel Investor. The outlook is that in 8 to 10 years from the start of the investment, return is expected. Aslanoba Capital is also co-investing with the local VCs and Angels, with GBA for Insider, 4 deals with Earlybird, 5 deals with 212 Limited, 1 deal with Hummingbird and 4 deals with Wamda. Aslanoba Capital has tickets from 100.000 to 2.000.000 USD. In regards to the quality Cankut is rather pleased with it. He sees 4 to 6 startups per year with a 50 million USD exit volume possible. Future will tell. He sees a shift in Turkey to global startups, giving Insider as an example, as they open offices in Russia, Poland, Australia and Singapore to name some. At the same time he sees investors from the East coming here like Wamda, Middle East Venture Partners, STC Ventures, Addventure etc. This may sound positive but as a footnote I need to maybe put some things in perspective. Arab capital from the oil-rich Gulf countries is less than 10% of the external funds coming into Turkiye with Europe covering over 50% and the US as second. This is the reality for some years now. Cankut still has a good feeling how Turkiye will evolve especially in the next 10 years with Istanbul as the center, also for tech companies. As I stated before, Cankut is a positive man, who focuses on the potential and regularly stating how lucky he is.

As can be expected with a driven person as Cankut, personal and business happiness overlap. He strives for a meaningful life, as that is the most important for him. Job, career and family come as one and he wants it to be meaningful to arrive at happiness. Also here comes being fortunate around the corner. When I talk with Cankut about the non- factual aspects he goes into a more philosophic space that I don’t fully grasp. It feels a bit like an encapsulated cocoon covered by words. I ended my writing in my notebook as “too mature” for his age. Not important anyway as it is great that he came back to Turkiye with a great attitude and knowledge and dedication and personally. I think Aslanoba did a great move to partner with him. Keep up the great work Cankut.

Patrick Bosteels, Stage-Co Co-Founder

patrick@stage-co.com

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