How to find an investor. Bakht Niyazov on how he evaluates startups, which sectors he plans to invest in, and how he can help founders

Bakht Niyazov, city — Almaty, investments, development, @nbbreal

About myself

My path to venture capital began a long time ago. In my youth, I was involved in creating the Kazakh stock market. I worked in leadership positions at the regulator and gained invaluable experience. Later, I left public service and founded an investment company. I was interested not only in trading stocks and creating the first funds but also in finding projects at an earlier stage for investment. Thus, I became involved in pre-IPO stages.

Then I ended up in the US, where I met interesting people, for example, Anthony Scaramucci, who had tens of billions under management. With his help, I found myself in Silicon Valley, where I met the then-head of Y Combinator. Unexpectedly for myself, I became a co-founder of a biotech startup. I studied all stages of development and fundraising. I participated in an IPO. I made an exit.

Later, I returned to Kazakhstan and made my first investment in a Kazakh startup, Smart Satu, which is currently developing successfully. I met Alim Khamitov and Mirat Akhmedsadikov. They invited me to participate in the creation of the new MOST Holding, which I agreed to without hesitation.

Beyond venture capital, I am actively implementing my dream project — the suburban town Lake Villa. I want to relocate 1000 families from an environmentally disadvantaged city to an area that will allow people to live a longer and higher-quality life.

One of the most important projects for me at the moment is Gen2B. My friend Armen Atayan invited me to it, who moved to Kazakhstan to develop within the MOST ecosystem. We are creating revolutionary products for businesses based on artificial intelligence. We have already acquired our first clients, and this is just the beginning.

I love participating in club deals and syndicates in our MOST club. This is an opportunity to share my investment idea with partners. The most vivid such deal was Educate Online — a platform that allows children to study online in foreign schools. The project reached revenues of tens of millions.

For me, successful stories are important, but so are failures: they improve our experience. An example is Madat Karimov and Qtap. I invested not only money but also my time and effort into the project. The potential was huge, but the main founder made, in my opinion, not entirely adequate decisions, which ruined his future. At the same time, the team remained strong and retained faith in the product. I will do everything possible to help them relaunch the startup and achieve success, and current investors will not lose their investments.

The main qualities of an investor are considered to be the ability to understand people and the basics of the business you invest in. Appetite for risk is also important. And in venture capital, it is also necessary to be patient. After all, no one knows when that very moment you are waiting for will come.

The main problem is the human factor. When investing in startups, you have to believe in people, one way or another. Teams do not always behave as you expect. Sometimes they act in the worst possible way. But this should not undermine the investor's faith in talented people. Otherwise, investments lose their meaning.

About investments

I do not consider my experience outstanding, but it is extensive enough to allow growth, learning, and moving forward. My most successful projects are foreign. For example, Turing, which became a unicorn. The first foreign startup — MeiraGTX — was also successful, although it earned less than I expected.

I particularly like one of the projects in my portfolio — a bank for immigrants created in the US. It was ahead of its time, and therefore initially faced difficulties. But in the end, the product took off. For me, this is valuable experience: the founders believed in success and continued to develop.

For me, the main criterion when choosing startups is understanding what the project does and what problem it can solve. If I do not understand the industry, I immediately decline.

I want to work in the format of a venture studio to participate in the birth of innovative projects and work with founders at the super-early stage, when the product design is just being defined. Although evaluating the potential of a startup is always a subjective matter.

It is important to recognize in the founder that very leader who is capable of going through all the difficult stages. In this regard, I value the experience of startups that found Product-Market Fit with great difficulty. An example is Bolatbek Ospanov from Smart Satu. He searched for the right application for his product for a long time and eventually found his niche, in which he is dynamically developing.

I also invest outside of Kazakhstan. One such project is the crypto startup XDAO. It was created by incredibly talented guys from Georgia. We met on the island of Bali, where I lived for almost two years. It was ideologically important for me to develop the direction of supporting the development of data access objects in the crypto industry. Today, I am one of the most popular creators of such organizations, which brings significant benefit to the entire industry.

I can provide a startup not only with financial support but also with experience and expertise. This is what young founders often lack — the opportunity to avoid typical mistakes that founders have previously made. In any case, everyone faces the same challenges. There is no need to learn only from your own mistakes if you can learn from others'.

The investment amount depends on the stage of project development, the industry, and belief in its potential. There are direct deals with startups — here my checks range from $50,000 to $1,000,000. There are also club deals — usually from $10,000 to $30,000. I enter them less frequently. Recent examples include the deal of the MA7 club, created by Murat Abdurakhmanov and Yelzhan Koshkebayev.

No one knows the exact term for exiting a startup. I rely on investors whose experience is more extensive than mine. Usually, I am ready to wait five years or more. One of the portfolio projects is created in the field of real mining — in it, you have already been for eight years. We see the potential for multiple growth, so we are ready to wait further.

Advice from an investor

The best way to prepare for raising investments is to go through a quality acceleration program. I recommend our accelerator MOST Business Intelligence and its IRA program. But you can go through such a program abroad as well.

Investors can be found anywhere. I agree with Margulan Seyssembay that the right people are always around us. But we do not always see this potential.

Venture investors are open people. Pitching a startup to a leading business angel is not difficult. The main thing is that the product is worthy of attention.

About plans

I see valuable experience and a billion-dollar history in promoting the Gen2B project. In the era of artificial intelligence, it is important to be the first to enter the market and occupy the niche that will soon become an integral part of our lives.

I want to invest in AI startups that are not just a "shell" based on OpenAI but have unique working solutions useful for business and people. We may relate to artificial intelligence differently, but we must recognize that AI is already a reality. Of course, there are challenges and risks, but the era of artificial intelligence has arrived, and this must be taken into account when evaluating projects.

Our startups will find it difficult to compete because the starting conditions in developed markets are much better. In the US, projects with artificial intelligence raise rounds worth tens of millions of dollars without having a product, a cool team, or an idea. Therefore, it is necessary to become global players from the very beginning, even though it is difficult.