Business Angel Alexander Borodich: How We Raised $28 million and continue moving forward
This is the translation of the article originally published in Russian, which is available at https://forbes.kz/finances/investment/biznes-angel_aleksandr_borodich_kak_myi_sobrali_28_mln_i_prodoljaem_dvigatsya_vpered/
We talked to Alexander Borodich, whose startup universa.io won the Russian Crypto Awards national prize as the Blockchain Startup of the Year
Alexander, you are a well-known investor in the venture capital market. At the end of last year, your Universa project raised more than $28 million during token sale. What do you think makes so many classical business angels and funds invest in crypto currency?
- First of all, there’s the cold math: Mangrove Capital experts have calculated that if you invested into all ICOs last year, including all that turned out to be scams or failures, you’d still get a 10x return on your investment. You must agree that’s a strong reason for any venture capital investor. Second, the industry development continues in all countries: legislation is passed to protect investors’ interests, blockchain Universities open, crypto funds are established, and crypto exchange revenue may double to $4 billion this year, according to the latest study by Sanford C. Bernstein & Co, despite the substantial market downturn since the start of the year.
How did your team manage to raise $28 million?
- All blockchain projects planning a token sale go through roughly the same stages: generating an idea, writing and revising the Whitepaper, a marketing campaign, meetings with fund representatives, private investors, and PR. For example, we managed to place Universa promotional video on Times Square.
Once the token sale is over, no magic happens automatically. On the contrary, this is when most of the work starts, both in terms of product development and negotiations process. This stage also has its own unique features.
What are they? It’s no secret many blockchain projects could never get around to presenting a viable product. Where is your project in this regard?
- To date, we have launched the project main network, with the throughput of more than 20,000 transactions per second. We have 750,000 registered users and over 50,000 followers in the project’s social media pages. On the one hand, the team always wants to bring the product to perfection in terms of security, as this is probably the cornerstone of product development. On the other hand, there is the extreme enthusiasm of the crypto community believing in the project and investing in it, and is now demanding more news and more updates every day. It takes a lot of psychological preparation to this kind of pressure.
Naturally, having a crypto community lends a great deal of motivation to the entire development team and organically becomes part and parcel of the project as it enters the next development stage. However, any rush in cryptography does more harm than good for its users in the future. Scrupulosity and paranoid double checks are great helpers at this stage. If you are going to compete against the world’s best teams and products, be prepared to some non-stop work. This is what the crypto market is all about. Blazing speeds. High risks. Great prospects.
Alexander, is there a difference in marketing campaigns before and after the fundraising?
- Most countries today are tightening their requirements to electronic platforms, and those in turn raise the bar for project developers and management. Adding a token to one of the top exchanges in most cases requires a full-fledged due diligence process. It is also hard not to notice the crypto market volatility and cyclic rate fluctuations. Being sporadic and lightning-fast, these changes definitely affect the specifics of the marketing campaign after the token sale ends. First, it is the focus on opening representative offices and science schools: any technology cannot exist on its own, it is based on a firm combination of academic science, practical experience and business. By the way, we have agreed to open Universa Kazakhstan office. This means a lot of mileage for all team members: the situation when you have to fly from Europe to South-East Asia couple times a week is absolutely normal. Second, this is the attention to running federal hackathons: we have to constantly find and encourage young programmers. We try to get the best developers into Universa.
What would you recommend to development teams just planning to create their own blockchain projects?
- For example, I can suggest developing your project on the basis of Universa Blockchain. We consult and offer comprehensive support to teams like this. I would recommend setting long-term goals and focusing on product development, not market speculations. Based on this study by ICS Statis Group, we can see that more than 70% of last year’s ICO projects were considered questionable, for one reason or another. The money was raised solely against a few statements regarding product development. At the end, there is no project and no investor’s money.
How can your project help real business?
- We have produced a long-term development concept for Universa platform, which does not include any market speculation. We have signed agreements with the Ministry of Defense of Malaysia and the National Bank of Lichtenstein. We also have a partnership agreement with Lanit, one of Russia’s largest IT holdings. The list can go on for a while, but the idea is the same: implementing blockchain technology in any business or control system takes time, but economic benefits generously outweigh the costs. We have plenty of cases: launching the pilot project of the Unified Grid Interconnection platform based on Universa Blockchain in Udmurtia; digitization of the rolling stock with a key railroad operator, Novotrans, managing tens of thousands of railway cars; developing the technology platform for Bartini flying cars, and many others. Blockchain allows moving all processes to radical new speeds and strengthening business processes. In other words, we at Universa try to look into the future, and we are inspired by what we see.
Short bio
Graduated from Moscow State Institute of Electronics and Mathematics (MIEM) in 1999, post-graduate studies at the same Institute in 2003.
In 2008, received MBA degree in Stockholm School of Economics.
Recognized as the most active business angel of 2016 in Russia, according to the Russian Venture Company.
Key investment areas: Internet of Things, Cloud Computing, Smart Cities, SaaS at seed and pre-seed stages.
Head of School of Economics and Mathematics at Moscow State University (2003–2013).
Director for “Business Acceleration of Blockchain Projects” education program at Plekhanov Russian University of Economics.
Former marketing director Mail.ru Group 2009–2010.
