EstBAN and Prototron Fond will launch a syndicate that will invest in the best startup of the next round. We will contribute start-up capital with Estonian angel investors to implement ideas!
The process is similar to the Ajujaht syndicate – up to 100K € is collected, the best startup is selected from the deal flow, and investments in the company will be made at a very early stage as a joint syndicate (the syndicate’s minimum ticket is 5000 €). Lauri Antalainen, Vice President of EstBAN and Lead Investor of the Syndicate, and Jana Budkovskaja, Head of Prototron, will provide answers about the cooperation and which startups are welcome to apply.
How was the idea to create a joint syndicate between EstBAN and Prototron born?
Lauri: For many years, Prototron has stood out as a very good program for ambitious startups. Over the years, several well-known and successful Estonian startups, such as CoModule, Qminder, Lingvist, and others have gained momentum from Prototron. From the deal flow of the last rounds of Prototron, several startups have also come up on the radar of business angels. The latest start-up that received a syndicated investment from business angels was Ender Turing. So, when Jana Budkovskaja, Head of Prototron approached me with the idea of creating a syndicate between EstBAN with Prototron (similar to the Ajujaht, Startup Day, and Latitude syndicates), I didn’t have to think twice before saying YES.
Jana: The idea to build a parallel equity-based fund for the equity-free grants we give out in Prototron allowed many advanced and investable teams that participate in Prototron to findvalue in the process even if they are not qualified to get the grant.
At what stage should a startup idea or ready-made prototype be?
Lauri: We’ve taken into account that the winner of the syndicated investment is at a slightly earlier stage than, for example, the winner of the Startup Day or Latitude syndicated investment. Yet, we expect the prototype to either be ready or soon completed so that the startup could use EstBAN’s syndicated investment to start and scale the company’s business activities.
Jana: The quality of the early-stage tech ideas coming to Prototron is increasing and the time-lap between Prototron and business-angel investment is decreasing. But there are also highly advanced teams we see no reason to keep in the program – we would like to send them to the market and business angels. We run the rounds twice a year and we receive 200-300 applications per round. These are not very homogeneous and range from conception to validation and commitment. Very early teams are lagging because of the tough competition but also very mature teams (the product/service is already on the market and there is some revenue) are “kicked off” because we believe they need to develop the business according to the market rules.
Please describe the application and startup selection process. When is the deadline?
Lauri: The timetable for selecting the startup company that will receive the EstBAN’s syndicate investment follows Prototron’s general timetable. On EstBAN’s side, we will begin to communicate more closely with startups after the selection of the top 50 on the 29 th of November. Furthermore, the recipient of the syndicated investment will be announced together with the recipients of Prototron’s funding on the 27 th of January, 2022.
Jana: The application process is going through the eventornado.com platform and only one page is required to be submitted with non-obligatory additional materials. The Prototron team and mentors are screening and assessing all the applications. Under the rating created, we pick up 40 to 50 teams to accept into the program. During the program, teams receive seminars and mentoring along with “homework”. Putting together one or two pages with information for investors, creating a pitch slide deck, running a (non-obligatory) crowdfunding campaign (prototron.fundwise.me), and creating a profile on dealum. Based on the feedback from the mentors, we get the best 10 to 12 teams to pitch before the Expert Committee and the last will decide who will get equity-free money. We will agree on the 6th of October about how to select the team to invest syndicate money in.
Prototron was founded in 2012. During this time there have been a total of 26 rounds and a total of almost 7,000 applications have passed through the Prototron program. In recent years, the number of applications per round has reached about 300. Since 2020, Prototron’s deal flow has been from both Estonia and Latvia.
In total, Prototron has supported 89 teams for a total of more than 1.1 million euro. This is a grant without shareholding and EstBAN-Prototron’s syndicate plans to make an investment to receive shareholding. There are many good examples of startups who have received money from Prototron – Lingvist, CoModule, Shaka, 3DPrinterOS, Qminder, FlyDog, and many others. During last autumn’s round, funding was given to Soft Robotic Cervix, Litegrav AI, Solaride, Neurosalience, Raiku, and EnderTuring (which also received angels’ money).
More information about the Prototron Foundation can be found HERE