Sergey Kartashov (Sergejs Kartasovs): Searching for an IT startup to invest in is like working as a gold hunter
- Guest Posts
- December 27, 2020
IT asset management companies help investors manage their capital wisely and select worthwhile projects in an overloaded startup market. Sergey Kartashov (Sergejs Kartasovs), General Director of the Cypriot company Generation Partners, tells about the aspects of this work.
Asset management companies have three key activities: market analysis, reducing financial risks via diversifying investments, and studying further prospects of companies. Experts study a company whether it adopts legal compliance, whether its employees are competent for their job and whether the management has enough commercial skills.
‘Developers are geeks, but often they behave like creative people. Often, they can create an ingenious product, but at the same time, they may not be able to competently bring it to the market. Even though a product has the brightest potential, it can get lost among a huge number of other offers due to flaws in marketing and management. Our task—just like gold hunters—is to find nuggets and bring them to investors. At the same time, there is always a risk. It is important to diversify it by investing in various projects,’ says Sergey Kartashov.
Looking for something unique
The most interesting part of analysts’ work is finding a unique, worthwhile, and high-quality project among thousands of startups. According to statistics, only a small part of them is cost-effective. And there are even fewer startups that are growing into stable companies.
‘When analyzing startups for investment, you should, first of all, look at the following criteria: the location country, the company’s age and its experience, the income for the last year, and whether there are investments from other investors. It is better to choose companies that have developed a unique innovative product that solves an urgent problem. This practically eliminates competition risks and increases the cost of both the product and the company,’ says Sergey Kartashov.
Cyprus is the cradle of IT startups
Another activity is advising IT companies on choosing a country for the relocation. Today, there are dozens of states with a more or less favorable business climate for IT. Cyprus is one of the most popular destinations for companies from post-Soviet countries. It meets all the key criteria of comfort for IT business. There, you can find IP-box, a preferential tax regime—a company must pay state taxesonly from a part of the income from the creation or improvement of intellectual property products. Apart from that, Cyprus has signed the Double Taxation Agreements with a number of countries. It is also worth mentioning the strong legislation on intellectual property rights protection.
‘As a nice bonus of relocation to Cyprus, I would like to note the relatively inexpensive but at the same time pleasant service. The standard of living on the island has an ideal quality-to-price ratio. Apart from that, here you have a large IT community that was born here and now helps the industry to develop and improve further,’ notes Sergey Kartashov.
Apart from Cyprus, there are other countries that are often considered for relocation: Malta, Poland, Estonia, Lithuania, Germany and, of course, the USA. According to Kartashov, all of these locations provide conditions for more or less comfortable work for IT businesses.
NOTE. Sergey Kartashov holds several degrees. In 2005, he graduated from the University of Malta with a BA in Science and Computing. After that, he studied at the Riga Business School. He has a Master’s in Business Administration (full-time MBA). For over 10 years, he worked in the banking sector with large corporate clients from the UK and Eastern Europe. Over the past five years, Sergey’s main areas of activity have been asset management and investment assessment of startups. Since 2019, Kartashov has been the CEO of Generation Partners, based in Cyprus. He focuses on startups that work with video technology and IT ecosystems, as well as on launching projects for pre-IPO and IPO.