Apply for Eleven

After the Third Month


After the Third Month

by Dilyan Dimitrov, founder at Eleven Accelerator Venture Fund

With this post, I will try to answer the question we get more and more often these days – “What happens at the end of the third month at Eleven?” Just to put it in context, Eleven is a 12 million Euro acceleration and seed fund based in Sofia, Bulgaria. Our investment cycle starts with funding startups with 25 thousand Euros for a period of three months, on average. After that, we have the option to either invest a full seed round of up to 200 thousand Euros, or follow up with another 25 thousand for a second acceleration period if needed. And of course, we always have the option to do nothing. This post is about what matters to us when deciding which way to go.

Stand on the right sign


About two months ago, in the end of January, Eleven teams had their first international Demo Day in London. Every time I am in London, the same thing impresses me over and over – people rush up and down the escalators in the Underground all the time. It does not matter that trains pass every other minute, or that the dash up will save them maybe 20 seconds – people are always in a hurry.  There is even the “Stand on the right” sign, meaning if you are on the left, you need to move. And you don’t see that same thing very often in the metro in Sofia – here, people generally take the more relaxed approach and just hang on to the rail, waiting for the next floor to come. And if you walk up, you are likely to face some reproachful glances from the people around.

Since this time around it was all in the context of our Demo Day, and we had spent about four months with our first batch of companies, I couldn’t help myself seeing things from that angle. And don’t get me wrong, I am not going to compare London startups to the startups in our programme. Rather, there are teams in Eleven doing it London Underground style, while few are taking it Sofia Metro way, and it makes a lot of difference.

At this early stage, one cannot tell when results are going to come, so it is more about moving forward than hitting some specific milestones. It is progress we prefer to track, rather than set targets – target setting has an inherent flaw – it distorts your viewfinder and one tends to focus on hitting that milestone, rather than doing what’s best for his startup. We erred in setting specific goals to some teams, and they responded by tweaking their focus in such a way that it made no sense at all.


So maybe the most important part of the answer to how we decide what to do at the end of the first stage of acceleration, is whether we see more Underground or more Metro in a team. It is about whether a company is moving in the right direction and at a proper pace rather than did the company achieve certain set goals. If we see that, then we sit down and discuss the future.

 And I am not saying we expect our investees should be running full speed up the proverbial escalator all the time, but we will not be happy with them sticking to the right and just staying there. After all, the funding we provide for the first stage goes mostly to the team members so they can focus 100% on their startup. And to use another analogy, in this stage fuel consumption is measured in liters per hour, rather than litters per 100 kilometers, so if you stick to 1st or 2nd gear, you will cover very little ground on the fuel provided, while hitting top gears will get you much further in the same period.


Of course, if a team is steaming ahead in the wrong direction, it makes very little sense. Usually, when we get teams on board, it is a leap of faith for both of us. And early on, while working with mentors and getting feedback, the projects get shape and focus that can lead to a meaningful business. While most of the teams try to take the best of the programme (and ask for more), some prefer to filter the feedback and only hear the positive part that supports their hypothesis. And this is a big turn-off for us, as investors.


Again, it comes down to time and pace. Some teams take entrepreneurship as a lifestyle business, others dedicate fully to their projects and spend all of their time and resources on getting as far as possible as quickly as possible. No need to tell which ones have a better chance in getting a follow-up round from us.


While we make our first investment decision based on gut feeling, we love to have our follow-up investments based on data. Any data that validates the market and the product should do, but with very little exceptions, we want to see that (early) hockey stick before we put more money into a project.


Finally, whether it is very early stage or not, the team is of critical importance for a project. We have teams join our incubator space in downtown Sofia, and we spend all our time there, so by the end of the third month we are pretty clear on how a team works and what makes it tick. And at the end of the third month, we want to see that the team is just as strong as it was in the beginning, and as capable to hit that next milestone, whatever it may be.

Furthermore, we are convinced that it takes A players to be able to hire other A players at a later stage of a project. And if in the beginning the founders should be sufficient for hitting the first milestone, it takes more resources, capacity and expertise to grow a project beyond its validation stage; so if we don’t see an A team early on, we will likely not see A players join it in the future.

 So, although there is no magic formula that gives a straight answer to the question what happens in the end of our first acceleration stage, our play is to invest in many companies, filter out failures and invest in successes. And how you fare in the first three months really matters, because if you don’t run up that escalator, someone will get there first, no matter where you are going.

Is three months enough to get to a proof of concept? – let us know what you think, join the conversation below.