Yavor Gochev “If you want to succeed you have to put a lot of effort in what you are doing”

Interview by Rumen Iliev and Lilly Drumeva-O’Reilly

The Fund of Funds recently signed a contract with a selected financial intermediary for the implementation of the Seed/Acceleration and Start-up Fund with the resources under the Innovation and Competitiveness Operational Program. The resource will be managed byVitosha Venture Partners Ltd. and has a budget of BGN 38 million. The intermediary’s international team has acquired relevant experience in managing investments and creating entrepreneurial programs and ecosystems. Along with financing through equity investments Vitosha Venture Partners will provide mentorship and strategic support to the companies. Business development strategies will be offered, as well as strategies for attracting additional private capital and accelerator programs. Other funds that will realize investments are New Vision 3 and Innovation Accelerator Bulgaria. The latter changed its fund manager name to Innovation Capital. Along with Morningside Hill, four equity and quasi-equity financing funds are operating on the Bulgarian market. They will support nearly 400 small and medium enterprises with a total resource amounting to BGN 190 million.

In relation to this news, we spoke to Yavor Gochev, of “Innovation Capital”. This is what he shared:

Tell us a few words about yourself and the fund you co-manage.

My name is Yavor Gochev and I am an investment manager at Innovation Capital. It is a €15.6M pre-seed and seed fund, backed by the governmental Fund of Funds and has the mandate to back around 200 early stage companies in different sectors.

What is your investment strategy?

Our mandate is to support a high number of companies at a relatively early stage. Having in mind that we are a small country and ecosystem we cannot be too focused. We have developed three different tracks and each track has its own thesis. The acceleration track is close to the traditional acceleration concept – this is where we’d expect bigger scalability and less involvement on our part after the third month after the acceleration program finished. The second track, “pre-seed”, is closer to the acceleration program – we expect 3-5x return there. In this track, however, we would be open to work with some standard business models as well, meaning we’d fund companies that have the potential to reach break-even faster. It could also be a brand, products, services. The last track – the seed one, is where we have a model closed to private equity. Given the background of the team, we imagine we could have access to companies that are different from what other investment funds work with.

What are some of the sectors you plan to focus on?

Innovation Capital is generally looking at all verticals, with a bit more focus on Enterprise software, e-Commerce, Financial services, Education, Automotive, Logistics, Healthcare, Media, Food and FMCG, and Cybersecurity.

How many acceleration stage and seed startups do you plan to invest in per year?

We are aiming at having two cohorts per year going through our acceleration program, which means that we will be investing 25K in each company when they join the program and if they meet the KPIs that have been set at the beginning that will receive additional 25K. These will be 20 to 30 companies per year. At the same time we are aiming at investing in a further 10-15 companies at a later stage of their development.

What are the key criteria you focus on when selecting teams?

Having in mind our mandate, the team is one of the most important factors. The people behind the idea or the project, their skills and knowledge are of key importance. Of course, we will be accessing the financial sustainability and potential for growth.

What is the typical process to reach an investment decision that entrepreneurs must be aware of?

All projects have to apply through our website. We have a CRM system that gives us an idea about the valuation of the project. If the project fits within our investment strategy, one of our team members will get in touch with you. The next step includes a meeting with one of the partners and internal due-diligence. If everything is ok, we will move to discussing a term sheet. A typical deal will take up to 2 months, due to the fact that the deal has to be approved by the Fund of Funds as well.

How can entrepreneurs reach out to you?

Our website, or social media, or you can meet us at different events. We are quite open and have just completed our roadshow. We have visited Plovdiv, Varna, Burgas and Veliko Tarnovo, where we had meetings with promising teams and start-ups from the local eco-systems.

What is a ‘no go’ or what are the areas you will not invest in?

Of course, we cannot support illegal business. At the same time, we cannot invest in sectors heavily supported by EU funding such as agriculture, fisheries and aquaculture.

What would you like to share with entrepreneurs in Bulgaria or what advice would you give them?

There are a lot of opportunities, both in terms of education, mentoring and financing as well. Make the best of them! If you want to succeed you have to put a lot of effort in what you are doing!

Mr. Gochev, thank you for this interview.


The Fund of Funds manages its BGN 1.2 billion in four Operational Programs: Human Resources Development, Innovations and Competitiveness, Environment, and Regions in Growth. The resources come from the European Structural and Investment Funds (ESIF) and are planned for the period 2014-2020. They are aimed at projects that could potentially turn into self-sustaining ones, i. e. – become economically viable. The Fund provides the resources through financial intermediaries and banks in the form of guarantees, loans and equity investments. The effort is focused into three main directions. The first is the provision of liquidity support to small and medium-sized enterprises. Secondly, the Fund of Funds already has an existing program to support self-employed persons and small start-ups with a short or almost no business history. Here again, soft loans are provided. Thirdly, the Fund offers a resource in the VC area through shares in start-ups and innovative companies. The aim is to support the rapid recovery of the economy after the crisis, especially in key areas of innovation, digitalization, high technology such as bio-and nanotechnology. In addition, the Fund of Funds finances municipalities by supporting projects aimed at improving the urban environment, development of infrastructure projects, sports facilities, cultural and tourist monuments, among others.

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