1Mby1M Virtual Accelerator Investor Forum: With Milos Sochor of Y Soft Ventures (Part 4)

Sramana Mitra: Capital-efficient company building that goes straight into acquisition is a very good model for entrepreneurs, especially entrepreneurs doing it for the first time. I see no problem at all with that model. I think it’s a great model.

Milos Sochor: I hope we play a big role. Like I said, Y Soft has made many mistakes and has learned the hard way. I’ll give you another example of a company that is in our portfolio. We have done business with them in Japan. They went from zero to money in the bank in three months. It took Y Soft 12 years to break into the Japanese market.

It was strategically important for us because that’s where Konica Minolta, our biggest partner, is headquartered. It is very hard to sell in the Japanese market. With us being there for so long and having our own person there for 20 years, we went from zero to money in the bank in three months.

Sramana Mitra: I love it. What is the business of this company?

Milos Sochor: This company is GreyCortex. They do network traffic analysis. They’re in the cyber security space. They install their software on third-party hardware. They take a copy of what’s happening. They monitor your network. They have machine learning so the system learns not to give you false alarms, which is the biggest issue of these types of software. They let you know everything about what’s happening on your network.

A little fun fact is that while one of the government agencies here in the Czech Republic was testing the software, they have discovered WannaCry virus that was attacking the Czech government. That was discovered because of the testing by GreyCortex. It gave them more information about what’s happening in the network. That obviously helped in the early stages of the company.

Sramana Mitra: Excellent. A slightly different line of questioning just to understand what’s happening in the Czech Republic by way of entrepreneurship, how many companies come to you for financing? What is the size of the deal flow?

Milos Sochor: I usually talk to 200 to 300 people per year. I believe that those are already filtered by the message that we send out – that we focus on B2B, hardware/software, and globally scalable companies. If it’s a local company, we don’t see them. We have invested in five in the last two and a half years.

One to two investments for us per year is what we like to see because by being so specific, we have one advantage among other VCs. Our fund is not huge, so we have no pressure to quickly invest the money to satisfy the investors. Number two, we have our manufacturing facility, hardware certification, and logistics. Other VCs don’t have that.

I work with some companies for more than a year before I invest in them because they’re just not going to go anywhere else when they see what we can provide for them. That manages our risk and we can invest in later stages. We play with small numbers.

This segment is part 4 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Milos Sochor of Y Soft Ventures
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