Roosh Ventures is an entrepreneurs-led VC firm with offices in Kyiv, Paris, and London.

• Taking on a co-investment-only approach, the firm invests from pre-seed to Series A across various sectors with a slight focus on enterprise SaaS, fintech, gaming, and AI-driven products in the EU and US markets. 
• Since its launch three years ago, the firm has already backed startups such as Deel, TheGuarantors, Oura, Pipe, Alma, Playco, Dapper Labs, Alter, and over 35 other companies. 
• Part of Roosh, a broader AI ecosystem in Ukraine, Roosh Ventures drives growth and success for portfolio companies by providing tailored support in AI/ML strategy planning and implementation, mobile app growth insights, B2B gaming sales expertise, and comprehensive assistance in talent acquisition, fundraising, legal consulting, and public relations. 

Fund strategy overview

Geography: EU and US
Preferred industries: Generalistic with a slight focus on fintech, gaming, AI-driven products, and Enterprise SaaS
Investment ticket: $50k-$1M
Company stage: Pre-seed to Series A
Product type: Software. Avoiding hardware and capital-intensive businesses
Product stage: Any
Revenues:  - 

Q&A with Den Dmytrenko, Co-founder and General Partner at Roosh and Roosh Ventures

What are the 5 main things you look for in a startup?

When assessing startups, we place emphasis on:

Visionary founders 

The team’s experience, idea maze for building the startup, and long-term vision are the foundation factors showing a startup’s strength.

Large market 

In order for new players to be competitive and valuable in the market they’re targeting, the market itself needs to be at least $1B.

Product purpose

The product should target a real-world problem. A friction that can be solved by creating a better solution.

Funding relevance 

The investment landscape of the target industry, its volume and market timing are extremely significant in this equation.

Textbook traction 

The numbers generated by the business mirror how well it fits the market conditions and the effectiveness of the business model. 

What disqualifies a startup as your potential investment target?

If the startup doesn't solve a problem in a new way or isn't addressing an unexplored issue, it is disqualified as an investment target. Additionally, lacking a deep understanding of customer needs, failing to demonstrate superiority over existing solutions, and lacking a clear long-term vision can also lead to disqualification from investment consideration. Essentially, if a startup doesn’t check all of the boxes of the 5 main things we look for, it’s a ‘no’ from us.

What in your opinion differentiates the best founders from the rest?

A combination of key qualities characterizes the best founders within the good. They bring valuable experience to the table, ideally possessing industry expertise and a deep understanding of the market in which they’re developing the product. Better yet, the founder has already worked in the industry, identified a problem, and created the startup as a solution. Another strong signal for investors is if the team has former CEOs, CTOs, COOs, VPs, or Heads of successful startups, product companies, or large corporations.

Effective communication is another hallmark of top-notch founders – the fundraising process, hiring, internal communication, and many other aspects rely on that. Moreover, effective communication with prospective customers is essential. Engaging with the target audience prior to launching a business provides invaluable insights into the potential Product-Market Fit (PMF) of their product/service. 

Honesty is a crucial trait. Transparency about the business, product, team, and challenges faced is key in the final stages of negotiation. There’s definitely nothing wrong with things not going perfectly, and the founder's honesty and ability to say "I don't know" will set them apart from other, less open teams. Plus there’s a high probability that, in the end, the investor will help you not only with money but also with additional services such as hiring people, improving your pitch deck, or networking.

Passion remains a cornerstone in the startup world. The best founders exhibit a deep enthusiasm for their work, responding promptly to inquiries, demonstrating a profound understanding of their market, and proactively addressing challenges. These qualities collectively contribute to the foundation of a successful and investable business.

What startups should take into account before making a deal with a VC fund?

Founders should prioritize quality over quantity in their investor search. Instead of aiming solely to raise as much money as possible at the highest valuation, seeking funds offering more than just financial backing is crucial. Look for partners who bring valuable expertise and resources to the table.

What is your approach to startup valuation and preferable share in the company?

Valuation is commonly a sensitive topic, and everyone always tries to get the lowest to maximize potential return. Generally speaking, up to $8-10M is the pre-seed benchmark, and $15-20M is the Seed benchmark, but we are ready to pay more if the industry is hot and the company has potential. Ultimately, it's the market that dictates the prices. As we are follow-on investors, we strive to have 3-4% ownership, though we can adjust our stake based on the risk.

How do you support your portfolio companies?

We provide comprehensive support to our portfolio companies through a range of strategic initiatives:

AI Boost Package

• AI Strategy Planning and Consulting

We offer AI strategy planning and consulting, providing full access to our advisory board, including CTOs from Roosh ecosystem companies Zibra AI, Reface, and Neurons Lab. This also includes comprehensive cross-checks of AI strategy, scalability, and operational bottlenecks.

• AI Tech Dev Outsourcing 

Our AI tech development outsourcing services are tailored to the startup's needs, with a three-week timeline for developing AI technology.

Going from 0-to-1 in Gaming and Mobile

• Mobile Growth Insights from Reface

Founders can gain full access to Reface’s expertise in launching and scaling mobile apps (a track record of up to 300 million downloads). The Reface team can analyze the startup's user acquisition methods, monetization strategies, and ML infrastructure scalability through detailed case studies.

• B2B Sales Expertise from Zibra AI

Tap into Zibra AI's extensive experience in partnering with industry giants like Epic Games, Nvidia, and Unity. The team will offer personalized guidance on establishing and nurturing relationships with game studios and streamlining integration processes, while also addressing any industry-related inquiries the startup may have.

Founders' Ops Support Kit

• Talent Requirement:

We offer access to Roosh’s talent pool of outstanding professionals for fast and cost-effective hiring.

• Fundraising Support:

We provide fundraising support by introducing startups to top-tier VC investors and offering detailed pitch deck reviews and feedback.

• Legal Consulting:

Our legal consulting service offers guidance on legal matters, including term sheets, IP rights, and jurisdictional issues, along with connections to suitable legal experts.

• Public Relations:

We support startups with all PR and communication-related queries, connecting founders with VC-focused media outlets for funding round announcements or other significant news.

What are the best-performing companies in your portfolio?

We take immense pride in each startup within our portfolio and remain fully committed to supporting their growth journey. Among them, Deel, TheGuarantors, Oura, Playco, Dapper Labs, Alter, Folk, and Promethean AI stand out for their remarkable agility in product development, rapid user base expansion, and effective monetization strategies. This exceptional performance has translated into substantial increases in valuation, reinforcing our belief in their potential for continued success.

What are your notable lessons learned from investments that didn’t work out as Expected?

Notable lessons from investments that didn't meet our expectations have taught us valuable insights. Firstly, it's crucial to look beyond short-term market demand spikes and consider how a business model performs in the long run, as exemplified by the challenges faced in instant delivery and certain crypto sectors. Secondly, pricing matters significantly, emphasizing the need to avoid excessive valuation risks for high-profile names and instead prioritize investments with a favourable risk/reward ratio. Lastly, recognizing the complexity of exit scenarios in different industries is essential, prompting us to proactively assess and strategize for potential liquidity challenges when entering an investment.

What are the hottest markets you currently look at as VC and where do you see the biggest hype?

While we maintain a broad focus across various markets, our particular emphasis lies in fintech, gaming, AI-based products, Enterprise SaaS, and productivity tools. Looking ahead, we anticipate the next year will bring even higher penetration of AI solutions into sectors characterized by extensive manual labour and rudimentary processes. This trend is likely to be fueled by intensified competition among the biggest players to advance their AI capabilities, paving the way for new capabilities that were never seen before.

In your view, what are the key trends that will shape the European VC scene coming years?

The European VC scene is undergoing a transformation with, how we see it, 6 key trends shaping its landscape in the coming years:

Funding Challenges: Despite AI's resilience in the face of an overall funding decline in 2023, European companies faced a notable reduction, raising only half the capital compared to the previous year. In the wake of geopolitical tensions, rising interest rates, and macroeconomic uncertainties, significant shifts in funding may remain elusive.

Market Recovery: The market appears to be recovering from the 2021 setbacks, with even industries like crypto and fintech finding positive ground for growth. This recovery is poised to fuel advancements and expand tech proliferation.

AI Dominance: AI remains a pivotal focus for funds, driving them to develop their AI expertise as understanding this technology becomes crucial for profitable investments.

Vertical Tech Emergence: Expect the emergence of vertical AI models tailored to specific niches. Areas like AI implementation, ready products, and growth in robotics and drones are set to influence the VC landscape. 

Competitive Environment: VCs have amassed substantial dry powder for investments, intensifying competition and making it increasingly challenging to participate in the most attractive financing opportunities.

In summary, the European VC scene is marked by both challenges and opportunities, with AI, market recovery, and vertical tech solutions standing out as key drivers in the coming years.

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