Founded in 2018 by Nykyta Izmaylov, N1 investment fund is an early-stage VC fund with offices in Lisbon, Warsaw, and Kyiv. Investing in software, fintech, SaaS, and AI, its team adopts a quick decision-making process and embraces an agile approach. N1 investment fund strongly believes that speed is a critical factor for success, and is not afraid to make mistakes, as its team shared with Vestbee.
Fund strategy overview
Geography: Europe/North American traction
Preferred industries: Software: Fintech, B2B SaaS, AI, beverage
Investment ticket: $50k-300k
Company stage: pre-seed, seed
Product stage: From pre-revenue with MVP and pilots to seed with first-paying clients.
Q&A with Nykyta Izmaylov, CEO and founder of N1 investment fund
What are the 5 main things you look for in a startup?
- Founders and a talented, passionate, entrepreneurial team with compelling storytelling and vision.
- Empathy for the problem and passion for the solution. Innovative, unique solutions, products, or services identified a niche in your desired market
- A large market opportunity
- A sound business model, convincing sales & pricing strategies
- Understanding of their competitors
What disqualifies a startup as your potential investment target?
- Lack of Market Potential
- Weak Founding Team and Inflexible Founders
- Poor Product-Market Fit and Financial Health
- Unsustainable Business Model
- High Risk Profile
- Competitive Disadvantages
- Misalignment with Investment Thesis
- Regulatory or Legal Issues
- Overestimated
What in your opinion differentiates the best founders from the rest?
They have a clear vision and can effectively articulate it to stakeholders. They demonstrate resilience, adaptability, and a customer-centric approach. They are effective leaders who prioritize tasks, focus on execution, and build strong networks. Additionally, they have a solid understanding of financials and can make strategic decisions to support growth.
More than a startup. The idea is their life’s work, their mission.
Founder's persistence and optimism. They'll see it through despite personal sacrifice.
Domain expertise and drive. Their vision and understanding set them apart.
Delayed gratification. The potential of their idea outweighs material possessions.
What startups should take into account before making a deal with a VC fund?
Research competitors and the unit economy of your product. Ensure strong alignment between your startup's vision, values, and goals with the VC's investment thesis and industry focus. Demonstrate evidence of traction, such as user growth, revenue, and key metrics. Highlight the strengths, experience, and complementary skills of your founding team.
What is your approach to startup valuation and preferable share in the company?
1) When evaluating a startup, for us, it is crucial to thoroughly analyze the market and industry, traction and metrics, financial projections and business model, comparable company analysis, and risk assessment.
2) We are open to negotiation and flexible in our approach. We recognize that each deal is unique and requires a customized strategy. As a fund, our focus is on creating a win-win situation where both the startup and the VC can succeed. We aim for a balanced ownership structure that aligns incentives for both the founders and investors. We ensure that the founders retain enough equity to stay motivated and attract further investment.
How do you support your portfolio companies?
We provide comprehensive support that goes beyond more financial investment. Our approach encompasses several key areas to ensure that our companies have the resources, guidance, and networks necessary to succeed:
- Strategic Guidance and Mentorship
- Networking and Partnerships
- Talent Acquisition and Development
- Legal support
- Fundraising and Financial Management
- Marketing and PR support
What are the best-performing companies in your portfolio?
Our healthy food development segment has great potential and scalability in the short-term period but still in the long run we believe that our fintech startups have great future and that’s why we're preparing for the next fintech boost, and we are searching for new early-stage startups which can be a part of our N1 fintech ecosystem.
What are your notable lessons learned from investments that didn’t work out as expected?
Every early-stage startup faces various challenges and threats, but the most regretful is cases when there is a disruptive idea that can’t chase proper product timing in terms of the market needs and passes through possibility to prove its product necessity for customers and catch a chance for scaling.
What are the hottest markets you currently look at as VC, and where do you see the biggest hype?
While AI and ML are among the top trending topics globally, our fund has a strong focus on fintech and crypto, reflecting our deep expertise in these areas.
Moreover, the food tech and beverage market is another exciting and rapidly evolving sector, in which we are really interested.
In your view, what are the key trends that will shape the European VC scene in the coming years?
For sure, military tech will be the key trend for the nearest decade. All of us are facing the war now. Markets respond to this run in developing the best and most effective solutions and weapons. And the finish of the war in Ukraine, I don't think will become a stop factor for this trend.
Also, I assume that the pendulum of the tech oriented startup is quite high, and I think that in the near future we will see a growing segment of startups focusing on producing something material, such as beverages like in our case.
