Startup guide

This is not a 10-step guide, which will help your startup succeed. There is none.

Instead, based on the most common questions we get, we put together a short guide to help you navigate when launching and growing a tech startup out of Slovakia. The guide also includes a legal part that was prepared together with Sparring and their Playbook. If you are missing anything, drop us a line.

Introduction

First, let’s agree on some basic terms. 

We say “out of Slovakia” because we believe startups should be scalable. And to be scalable means to be global. 

What do we mean by “startup”? We follow the classic definition by Steve Blank: a startup is a temporary organization designed to look for a business model that is repeatable and scalable. The goal of a startup is to be a small business but to find a repeatable business model that will turn into a high-growth and profitable company.

While working on your startup, it is crucial to understand the stage you are in. You don’t want to skip a stage or, even worse, get distracted by something that should worry you in 12 months and NOT NOW. This model by Startup Commons (Check out all resources at https://www.startupcommons.org/) nicely illustrates the startup phases ranging from an idea to an established business.

This guide is focused on helping founders in pre-idea, seed, and early stage

Ideation

The first step is to have an idea to work on. But even if you don’t, there are concrete steps you can take to get an idea worth pursuing. Founders should learn the science and art behind getting the right ideas as well as abandoning them.

Check out this blog by Jared Friedman, Partner at Y, on how to get startup ideas. You can also participate in hackathons (ideation events taking place usually over a weekend) or sign up for a Startup Weekend. These events are a great way to form teams and work together on problems that can lead to some great startup ideas.

Validation

Most founders get obsessed with their ideas. That’s a good thing. Otherwise, they would never spend all those hours on top of their regular jobs. But before building your product, make sure you spend enough effort (time & resources) validating your idea. Yes, you are right – you validate your idea by talking to customers over the phone, email, or by meeting them at events.

If you are not sure how to do it (the chances are that you don’t 🙂 ), we recommend learning how to validate your idea at https://rozbehnisa.sk. There are also a ton of great resources freely available online. You can start by checking out these blogs by Mitchell Harper or Alexander Jarvis. If there is one book you need to read on this, it is the Mum Test – it is fun and eye-opening.

Founding Team

There is nothing more important when building a startup than having the right team of co-founders. Here are few basics you need to know:

You should not be on your own. Y Combinator, the world’s most famous startup accelerator, even has a rule of not accepting startups with a single founder. If you are a solo founder and you think you can pull it all together, watch this video interview with the founder of Dropbox describing his journey of having to search for a co-founder to get into the Y Combinator.

Complementary skills. If you are a group of 2-3 co-founders, make sure your skills are complementary. In your core team, you need to have a product expert with technical skills and a business person. 

Agree on the vision. What kind of company do you want to build? Are your ambitions to create a local small business or to become a high-growth global company?

Agree on fundamentals. It happens too often that founders do not explicitly agree on the fundamentals when starting their business. Define your commitments (time, resources, capacities) and decide on the ownership of shares. Write down a simplified Shareholder agreement or agree on the basics in writing in short bullet points. You might be best friends now, but it is still essential you explicitly agree on this. You might want to renegotiate later as your situation or commitment changes, and that is ok.

Support

There is a lot of support and programs available for founders aimed at incubating and accelerating startups. Many of them can be of great help and stepping stones for your business growth. They can provide you with great mentors, office space, access to investors, or even give you some cash.

However, as a founder, you should be busy building your team and product (often on top of your regular job) and not attending every event, training, or incubation program that you see. 

At https://innovateslovakia.sk/ecosystem/, we curated the best support programs and go-to organizations based on your startup phase.

If you have an MVP or prototype and want to scale and find investors check out Challenger Accelerator or Perry Talents.

There are also programs dedicated to startup needs in specific sectors, e.g. HealthCarelab for digital health startups, Lifbee for biotech, Fintech Hub for fintech startups, or Challenger Urban: Creative aimed at startups working in creative industries or city challenges. 

You can also take advantage of university infrastructure and their incubation programs. We recommend the incubator at STU (InQb) in Bratislava, Startup Center at TUKE in Kosice, or UNIZA incubator in Zilina.

In multiple cities in Slovakia, there is also the National Business Center that runs multiple programs for entrepreneurs and can provide you with some specific experts.

For social innovation check out the program Generacia 3.0 by Pontis or Agathe Center for Entrepreneurship.

Funding and Investors

When building your startup, you will hear a lot about “raising money”, “angel investors”, “venture capital”. Before you send your pitch deck to any investors, make sure you understand what it means to have an investor in your startup. Sometimes founders forget that the goal of a startup is not to get funding. Getting funding (capital from an external investor) can be the right thing to do for many startups, but it is not the only way to get your company started or grow.

There are a few main questions all startups should be able to answer: Why should I raise money? When? How much? What are my financing options? We recommend reading this guide to seed fundraising by Y Combinator. Also, most startup incubators and accelerators can guide you very well through the fundraising process.

In the last few years, there has been a significant growth of investment deals to startups in Slovakia. You can find all deals to Slovak tech startups in our Spreadsheet

Several active venture capital funds are based in Slovakia, such as Neulogy Ventures, CB Investment Management, Vision Ventures, Zero Gravity Capital, and ZAKA Ventures. Add links

Other investment groups such as IPM or Eterus Capital sometimes invest in startups as well, or Crowdberry platform putting together individual private investors.

You can find a nice overview of the leading VC funds here.

Do you have any questions? Is there any information missing?
Reach out to us!

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