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Armenia-Turkey Investor Day to support a Self-Sustaining Entrepreneurship Ecosystem
“Entrepreneurship and ideas can succeed where diplomacy and politics fail.” That was the conclusion following the first visit of the Turkish Entrepreneurship Delegation to Armenia in November 6-9, 2014. Since then, TEPAV and PJC collaboratively organized six exchanges between the two countries which prove that it really is possible to work together, learn from each other and strengthen the ties between these two countries via innovation and entrepreneurship.
Establishing self-sustaining entrepreneurship ecosystem requires improvement in both talent and capital. That is why the EU funded Turkey-Armenia Entrepreneurship Program started with an exchange of entrepreneurs program. It is believed that talented entrepreneurs are the backbone of healthy Startup Ecosystems, and that this talent should be trained and improved by these kinds of events. Three years of exchanges between two countries allowed us to establish a strong base for startups so that it was decided to broaden the scope of the program by integrating other stakeholders. That is why the sixth stage of the program is designed specifically for Angel Investors and Venture Capitals in these two countries as well as entrepreneurs.
Over the past three years Turkey’s Entrepreneurship ecosystem has come a long way. The total amount invested in 2014 was 45-50 Million USD whereas it’s forecasted that in 2017 it will reach 70-80 Million USD. According to the Undersecretariat of Treasury, there are 408 accredited angel investors in Turkey as of November 2016. It is estimated that there are 150 active angel investors in Turkey who have invested in at least 1 startup. Although there are no specific statistics on the angel investments amounts in Turkey, the total investment amount for pre-seed and seed stages was $18M in 2015 according to the Startups Watch. There are 15 angel investor’s networks in Turkey. There are only 3 angel investor’s networks that were invested in more than 10 startups in the country.
On the other hand, Armenia offers competitive advantages relative to other countries in the region, such as a well-educated and talented workforce with technical skills and English language proficiency, as well as sustainable and continuous growth in its IT sector. While the number of Venture Capitals in Armenia is increasing over the past three years, the country is still lacking to establish any angel investor network as of now. Artsvik Minasyan, Minister of Economy of the Republic of Armenia states that “A number of projects are currently implemented in the sector that are directed towards the attraction of Multinational Corporations to Armenia, promotion of sales and investments, supporting entrepreneurship, assistance in creation of start-ups and new jobs, development of qualified workforce, as well as sustain proportional technological development in the regions of Armenia.
The first-ever Armenia-Turkey Investor Day was designed and implemented by TEPAV and PJC with the aim of promoting the idea of creation of a sustainable angel-investing network in Armenia and Turkey, introducing various formats of investor networks, as well as best international practices.
The Armenia-Turkey Investor Day initiative is unique one in the sense that it is the kick off of the concept of Angel Investors network in Armenia, to support the entrepreneurial ecosystem, to connect entrepreneurs with Angel Investors and to help investors and entrepreneurs in building lasting and profitable relationships.
Investor Day Kickoff Event
On 2-3 May, TEPAV and PJC organized the kickoff event of very first Turkey- Armenia Investor Day and plant the seeds of a joint angel investor network to finance entrepreneurs and new ideas through different stages of development, establishing a favorable balance of power with investors and raising enough capital to confront competitors who have grown elsewhere.
Within the framework of the program; The Economic Policy Research Foundation of Turkey (TEPAV) and Public Journalism Club (PJC) hosted Investors Delegation to Armenia from Turkey, Germany and Silicon Valley.
The event started with opening remarks by Seda Muradyan from PJC, Cansu Sarac from TEPAV, Jean-François Charpentier, the Ambassador Extraordinary and Plenipotentiary of the French Republic to Armenia, Head of Cooperation Section of EU Delegation Hoa-Binh Adjemian, and Tugce Ergul from Angel Labs. Ambassador of France to the Republic of Armenia Jean-Francois Charpentier remarked that unregulated relations between Armenia and Turkey made it harder for the development of the Armenian economy, while similar events were necessary for starting a dialogue between the two countries. He described the meeting as “exceptional.” He said his country welcomes any initiative aimed at the establishment of Armenian-Turkish economic ties. According to the Head of Cooperation Section of EU Delegation Hoa-Binh Adjemian; “only de-facto solidarity can bring to normalization and peace, which will lay ground for successful future in the region.”
“The objective of our initiative is to support those who are willing to further develop Armenia’s start-up and investment ecosystem by forming angel investor network. Such networks do successfully exist worldwide, and our aim is to introduce this concept in Armenia and in Turkey, as well as promote cooperation between angels from these countries for implementation of joint projects,” Head of the PJC Seda Muradyan remarked. Director of Angel Labs Tuğçe Ergül told “This is a great way of starting a dialogue between the two cultures, as VC and entrepreneurship is truly a global language, which anyone from Silicon Valley to Berlin can speak; that is why our delegation is so international. This is a way of filling the lack of business angles in Armenia. You have a number of successful entrepreneurs, but Venture Capitals and angel investor side is really missing. I think Armenia can profit from being a small country, which helps entrepreneurs think at least regionally if not globally. Definitely you need to build traction globally or regionally instead of creating a product for local market and to your advantage. You need to think bigger and make sure you focus on traction, not investment, because money will find you once you have traction”
Program was composed by six sessions:
- Investment Ecosystems in Armenia and Turkey were discussed by representatives from both countries.
- Investment Director of HR Ventures Ertan Can, explained mechanics of startup investing and how deal structuring is done in Germany.
- Harald Braunstein, founder of NFQ Capital in Germany stressed how to build your own investment thesis and due diligence investing in funds. Interactively he discussed and shared the best practices.
- Alan Tung, Manager of Group Strategy at Delivery Hero explained how to add value as an investor and portfolio management investing in funds by sharing her know how and best practices.
- During the last session investors delegation had a round table discussion with four Armenian Startups. Investors first asked the potential questions that might come up when they pitch to any type of investors.
Then, they requested from startups to practice pitching their ideas in one line. An hour of discussion helped startups to understand what really investors are seeking to hear and see when they want to invest new project ideas. Duygu Öktem founder of DO Consultancy indicated capital and talent are the two elements that compliment each other. She said investors need startups just like startups need investors.
Investor Delegation was most impressed at the level of initiatives surrounding and empowering both investor scene and startup scene. Alan Tung commented; “Entrepreneurship ecosystem is more like chicken and egg scenario where you have to lift both in order to build a productive ecosystem”. Harald Braunstein also indicated that “What we found really amazing is technical capabilities of the startups in Armenia, looking forward to introducing our companies in Germany with the talent of Armenia”.
Participants of the Investor Day were satisfied with the daylong event and very much interested on the topics discussed by the Investor’s Delegation.
Exchange of Entrepreneurs Program Background:
The first stage of the Exchange of Entrepreneurs Project jointly organized by TEPAV and Public Journalism Club (Armenia) was held in Yerevan and Gyumri on 6-9 November, 2014. The project brought together Turkish and Armenian entrepreneurs in Gyumri. The event hosted a Turkish entrepreneurship delegation of 12 entrepreneurs, 12 investors and a Silicon Valley-based investor. The events were attended also by more than 30 startup entrepreneurs from Armenia, selected by TEPAV’s event partner Public Journalism Club, as well as Armenian and American investors, established entrepreneurs and ICT experts. One of the highlights of the first stage of the project – the Armenia-Turkey Startup Weekend, brought together over 27 startup entrepreneurs from both countries, as part of the larger INNOWEEKEND forum with 300+ participants.
For the second phase of the “Exchange of Entrepreneurs” Project introduced under the Project for Armenia-Turkey Normalisation Process, a delegation of Armenian entrepreneurs visited Turkey. In the context of the 5-day exchange program, an Entrepreneurship Delegation of 14 people from Armenia went to Istanbul. The meetings brought together ICT experts, investors, academia, and entrepreneurs from Armenia and Turkey to discuss collaboration and opportunities in the ICT sectors of the two countries.
Given the unprecedented nature and impact of the Project, the U.S. Embassy in Armenia proposed to provide longer term support for the startups, due to which 6 startup teams from Armenia and Turkey involved in a 6 month capacity building project. A joint training session was held in Ankara for the benefit of Turkish and Armenian entrepreneurs as part of the “Entrepreneurial Partnership for Technology Exchange” program funded by US Embassy in Armenia, co-organized by TEPAV, Public Journalism Club (PJC) and Viveka. Twelve young Armenian entrepreneurs including university students and new graduates have attended a four-day acceleration program between Feb. 1 and Feb. 4 at TEPAV with Turkish entrepreneurs and trainers. The training was held within the framework of the program that aims to encourage entrepreneurs from neighboring countries to build transnational partnership networks and turn entrepreneurship into an interactive process.
In 2016, project is funded by European Union again, as a second round. As a first stage of second round, for the first time Armenian start-uppers participated in the Startup Istanbul regional forum. For the first time the Armenian startup ecosystem had the exceptional opportunity to take part in the Startup Istanbul Regional Forum was held in Istanbul, Turkey, on October 6-10. Ten Armenian Startups selected by the Turkey Armenia Exchange of Entrepreneurs Program had the opportunity to meet with and pitch their business ideas to investors, mentors and entrepreneurs from all around the world. For the Demo Day organized on 8th of October, 50 startups were selected by the mentors and pitched to the jury. Having qualified for the final stage among hundreds of business ideas; Armenian startup Skycryptor became one of the 15 finalists to take the stage and pitch their business idea to the vibrant crowd of Startup Istanbul.