In a press conference introducing TrigUp’s new investment model, it was announced that the company will use the Micro VC investment model to support startups needing between 1 to 6 billion Toman in funding. This model is designed to fill the gap in the growth stages of startups.
According to Iran digital economy annotation, Seyed Hamidreza Alavi, Deputy Investment Manager at Shenasa and Chairman of TrigUp Accelerator, said, “WMicrohen a startup team begins, after being accepted into acceleration centers, they need to seek venture capital investment. This process is very difficult for startup teams and hasn’t developed as it should in the country. In this gap, TrigUp invests in startups at this stage of their maturity as a Micro VC.”
He explained that TrigUp invests 20000 dollar in startups, with 60 percent in cash and 40 percent in services. Investments above 100000 dollar are handled by Shenasa.
The need for Micro VC in investment
Mohammad Sadegh Sobhani, CEO of TrigUp Accelerator, spoke about the need for Micro VC in investment, saying, “In startup ecosystems around the world, if all entities such as accelerators, universities, and government institutions function well, two factors ensure their survival. The first is talent, and the second is the capital needed to bring ideas to life. In recent years, various political and social challenges have weakened both talent and capital in our ecosystem.”
Sobhani also announced TrigUp’s plan to invest 3 million dollar in startups in 2024, adding, “As one of the longstanding players, we hope to solve the funding issue with Micro VC. In this regard, we will invest 3 million dollar in businesses at various stages of acceleration in 2024.”
He addressed the challenge of weakened talent by saying, “Our solution to the talent challenge is promotional activities. Our students and the new generation are not familiar with the culture and essence of entrepreneurship and lack sufficient awareness of the institutions that can help them on this path. This situation worsened during the COVID-19 pandemic. We have allocated over 800000 dollar to help students become familiar with the entrepreneurial environment and to realize that there are alternatives to freelancing.”
Sobhani also mentioned providing technology grants to uniersities, adding, “In our academic environment, through models of technology grants, we support research and student theses that have the potential to turn into a service or business. Of the 3 million dollar in direct investment, 60% is directed towards Micro VC, which, alongside our social responsibility perspective, will have economic benefits for us in the long run.”
Mehdi Oskouee, Investment Manager at TrigUp, further elaborated on Micro VC investment, stating, “Investment companies or VCs tend to invest in more mature businesses to reduce risk, which creates a gap between businesses that VCs are interested in and the teams entering accelerators. This is the gap we aim to target.”
Oskouee outlined TrigUp’s investment priorities, saying, “We have operated as a general accelerator for a decade, but in 2024, we will specialize our activities and define priorities for ourselves in the Micro VC layer. The first priority is artificial intelligence and the industrial revolution, followed by food security, financial technologies, logistics, health and aging, and energy optimization.”
He added, “We previously invested up to 20000 dollar in acceleration. The new Micro VC investment model will be up to 1.2 million dollar. Essentially, investments over 20000 and up to 1.2 million dollar fall under the Micro VC layer.”
Sobhani also spoke about TrigUp’s non-financial support, saying, “Our most significant support is mentorship, preparing startups to attract higher-level VC investments. In past events, we focused more on promotional activities, in addition to organizing entrepreneurship campaigns and three collaborative events.”
Regarding equity stakes in startups, Sobhani explained, “If the funding needed by a startup is reasonable, VCs generally do not seek managerial equity. We do not take 60-70% equity for the money we provide, as this would diminish the motivation of the team, which will need to offer equity in later stages as well.”
Sobhani noted that TrigUp has also invested in teams from other cities, mentioning that of the 14 teams they invested in and saw success, 5 were from Mashhad and one from Isfahan. Additionally, three investments were made in Golestan province in collaboration with the province’s technology research fund.
The CEO of TrigUp concluded by discussing the company’s interactions with official institutions and expectations from the future government, saying, “Our connections with growth centers and technology parks have increased in recent years, focusing on leveraging our online platform.
Growth centers only provide workspace and facilities to startup teams, but these facilities do not necessarily benefit teams in their early formation stages; investment and mentoring are more critical for their growth. The birthplace of innovation is the competitive landscape in the industry and the overall economy of the country. It seems that our innovation environment needs a competitive space in the economy of that industry to make innovation meaningful; otherwise, even laws like the Knowledge-Based Leap Act turn into competition for more rent-seeking.”
This new investment model can aid the development of emerging startups, and TrigUp, as a pioneer in this field, hopes to pave the way for greater growth and success for Iranian startups through the use of Micro VC.
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