Anna Kulesza
January 14, 2021
Nothing beats talking to people who love what they’re doing, even if it’s not easy. This is exactly the case with Jure Mikuž. Although he set out as a banker, Jure chose to work on things that truly matter to him, transitioning to VC.
He co-founded RSG Capital, the first VC fund in Slovenia, raising money from established local companies such as Gorenje, Kolektor, or FMR. Jure is also the co-founder and managing partner at South Central Ventures. With offices in Belgrade, Zagreb, and Skopje, his VC firm focuses on tech companies in the Balkans. The EUR 40 million fund is primarily dedicated to early-stage and growth investments.
Jure invested in and served as a board member at several companies, including Celtra (scalable, rich media mobile advertising), Agrivi (knowledge-based farm management), and Sentinel Marine Solutions (software and hardware for monitoring and remote control of modern boat systems).
Paweł Michalski (PM): Did you enjoy being a VC pioneer in Slovenia?
Jure Mikuž (JM): Looking from today’s perspective — I did. I’m not a corporate guy, never was. I never wanted to climb the corporate ladder, elbowing for my position with my colleagues. However, in some cases, spending a couple of years in a stable environment can be good for you. Especially at the beginning of your career.
People learn about discipline and get some education working for international corporations. They learn how to interact with people in the organization and how to develop managers and leaders. Sometimes, it helps if you are a part of something more prominent at the beginning of your career and can decide what you want later on.
PM: Do you prefer to invest in people who have a corporate background, or do you prefer serial entrepreneurs?
JM: What we look for is a team that comes from both worlds, however, the main founder should be an entrepreneur. They should always think about how to adapt or how to reshuffle the business model. It’s perfect if at least one of the co-founders has some corporate experience. It’s especially crucial for people who had technical roles and learned a particular industry well. A great entrepreneur needs a wingman, somebody who knows the risks and opportunities.
PM: How did you end up as a VC? Was it something that you wanted to do?
JM: No, I never thought about becoming a VC in my twenties, not even in my early thirties. I wanted to be a Wall Street guy, making huge amounts of money for myself and my clients.
The tipping point came in 2005, seven years into my career. I was fed up with moving assets from one bucket to the next without providing any significant value add. It was very exhausting and not very rewarding. You never win, because you can always make a better return. If you lose money, your clients take it personally. It’s not nearly as satisfying as venture capital is. In VC, you create new space for people to thrive, new career options for individuals, new solutions to existing problems.
PM: So how did you transition to venture capital?
JM: It’s quite a story. I was a member of young execs society — a business club if you will — and one of the members approached me, asking if I wanted to join a new initiative. Some people at the Slovenian chamber of commerce wanted to provide microloans for startups, but they didn’t have a specific business plan for the new venture. I decided to join, and soon after that, I was sure that this wouldn’t work the way it should to stay sustainable.
You might call it a pivot, because we changed the entire strategy, and started a proper fundraising process to create the first Slovenian VC fund. We were able to raise from corporate investors and later also through a matching scheme established by the government of Slovenia.
When I look back, it was quite naive. We had proper knowledge about finance, but managing founders was something entirely new to us. We made a couple of mistakes that I hope we are not making anymore. Well, you learn all the time.
PM: Does any of those mistakes stick out?
JM: One of the most important lessons was that you need to choose your limited partners wisely. In the first years of functioning, we had quite a few challenges with our LPs. Some of them did not understand our strategy or the nature of venture capital in general, for that matter.
The second most important lesson was that you can never spend too much time with a founder before investing. Everything relies on the founder and the founding team, so you need to take your time.
PM: Did you find a way to manage that part?
JM: I’m still not sure if that is the best way, but we learned the steps we shouldn’t take. For instance, we know that a one-founder-company doesn’t usually work. We also know that when things go sideways, it’s mostly due to personal reasons. We need to get involved quite early to identify potential conflicts and address them. If you cook these things too long, it’s going to be too late to save the dish.
On the other hand, we want to be the first choice investor for the best founders in the region. All we can do is to ensure that people will gravitate to us automatically. We see 600–700 companies per year and invest only in three to five. You need some success stories in your pocket to attract the real winners and cherry-pick them.
PM: How would you compare raising your initial fund and doing it for the second time?
JM: Funny as it sounds, the first fund was faster and simpler. Part of the reason was that we raised from a couple of executives we knew on a personal level. So, even though we secured corporate backing, it felt more like raising from business angels — it was more of a personal decision. I’m not saying it was well structured, but it was far more straightforward.
We consider ourselves lucky because we raised the fund just before the financial crisis. It became a little bit more challenging at the very end, but it wasn’t a struggle. Looking from today’s perspective, it’s quite unbelievable that somebody would give us their money.
PM: What was the primary trigger for the second fund?
JM: I believe it was our track record with the first fund. We were able to show limited partners that we know what we are doing. We also had one successful company that raised a couple of follow-on rounds. It definitely helped.
We were lucky that the European Investment Fund (EIF) had a new investment program for Western Balkans at that time. What’s more, our new LPs, EIF and the European Bank for Reconstruction and Development, know that they need to develop new fund managers and their entire ecosystem. They are open to educating and supporting the fund managers in whom they invest. We still have a lot of support from those guys.
PM: What is the most important part of your job?
JM: There’s a huge opportunity, but there’s also a responsibility to build new teams, products, and businesses. It can really change the way people live. One of the most important things is to focus your attention on that and steer clear from any kind of misconduct.
PM: Isn’t that kind of obvious?
JM: Let me explain: having a EUR 100 million fund can be a significant opportunity for quick wins. Nothing’s going to be dramatically wrong if you invest one million in your friend’s company, and it goes bust. It’s part of the risk, right?
If you get involved in that kind of “side business,” it will seal your VC career. It might be tempting, but if you’re in it for the long run, stay away from such “opportunities.” Everything you do, do it transparently. And always stay away from any black stains.
PM: What gives you the most joy? What makes this career tempting?
JM: I have a feeling that I’m part of something big. I’m working on something new and making somebody’s life easier. Let me give an example: we invested in a FinTech that is providing microloans. The other day I went to a local shop and wanted to buy something for my wife. A customer before me bought something for EUR 1000, and the shopkeeper offered him installments via this FinTech’s platform.
They convinced the buyer to buy just because he could use the installment option. I was the next person in line, so I asked the shopkeeper, are you happy with the service? He replied that it’s the best thing that has ever happened to him. Imagine how proud I was to mention that I know that company and I have invested in them.
We also invested in another company that is doing telemetries for sailboats. You see a boat in Croatia, and you know it’s connected to our device, which increases its safety. It’s wonderful to see the results of your work in your daily life.
I sometimes think that we live in a bubble, but not in a negative sense — I’m working with only positive-minded people. Most of the founders I meet, they want to make something new, to create. If you chat with them, you’re not discussing politics but things that matter, and that could positively change our future.
Sign up for our newsletter
