1Mby1M Virtual Accelerator Investor Forum: With Pawel Maj, Investment Director at Warsaw Equity Group (Part 1)

Pawel Maj, Investment Director, Warsaw Equity Group, discusses post-seed and pre-series A funding in Eastern and Central Europe in the context of his firm’s investment thesis.

Sramana Mitra: Tell us about what’s up in Poland. You are in a semi-warzone. What’s happening with the startup ecosystem?

Pawel Maj: The war is in another country, but we had a huge wave of immigrants coming from Ukraine. We already admitted almost five million immigrants. These are difficult times. It’s great to see the Polish population come together to help the neighbors.

Sramana Mitra: That’s really heartwarming to see how well the Polish people have welcomed the Ukrainians. Let’s talk about the startup situation and talk about Warsaw Equity Group.

Pawel Maj: I should start with a short introduction to the fund. I’m the Investment Director of Warsaw Equity Group. We are a family office with headquarters in Warsaw. We invest in the whole of central and eastern Europe. We have $150 million under management. Our focus is B2B startups, especially in automation and process improvements. Since we are a multi-stage fund, we invest in private equity deals. We invest in VC deals. We are also LP. We invest pre-seed and seed funds.

Sramana Mitra: But you invest directly?

Pawel Maj: Yes. We also invest indirectly at early-stage.

Sramana Mitra: For the interest of this conversation, we’re mainly interested in your direct investments.

Pawel Maj: We do late seed and Series A direct to startups.

Sramana Mitra: Let’s talk about what kind of ticket size. What is your preferred ticket size?

Pawel Maj: Our initial investment is between $1 million and $5 million. We are able to invest additional up to $5 million in the follow-on rounds. In total, we’re able to invest up to $10 million per startup.

Sramana Mitra: B2B $1 million to $5 million and another $5 million in the follow-on. What do you need to see in a company that would give you comfort to write a million-dollar check?

Pawel Maj: We are a later-stage investor. First of all, we expect that the companies are post-product and post-revenue. We focus on startups that have at least $50,000 MRR. We expect that there’s a complete core team. Even if it’s a niche, the niche would, as least, be able to grow 20x since our investment.

Sramana Mitra: There is an interesting subtlety in post-revenue investment that I want to probe with you. In a sense, the stage that you’re talking about is termed post-seed, pre-Series A, and all the way to Series A. You want to see revenues.

There are a few things that are in the pre-Series A stage that happens that I want to get your input on. The notion of repeatability. The notion of velocity. Companies do really well if they find a go-to-market strategy that gives them velocity. If they’re selling to enterprises, they want to figure out how to repeatedly sell to lots of customers quickly with reasonable sales cycles.

Am I reading you right in saying that these are things that you’re okay with not being fully fleshed out and can be fleshed out after your investment comes in?

Pawel Maj: To some extent, yes. We’d like to see the first traction. We are already looking at the product-market fit. We’d like to see them figure out a repeatable way to sell the product. It doesn’t have to be enterprises; it can be SMBs. We are keener to provide capital to a startup that’s already working.

This segment is part 1 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Pawel Maj, Investment Director at Warsaw Equity Group
1 2 3 4