New Business Angels Association Targets Domestic Tech Startups

The Croatian startup scene is enriched by yet another investors’ association. The new Croatian business angels association CBAN (Croatian Business Angels Network) has just commenced operations, comprising successful business individuals who are ready to invest their entrepreneurial experience, market knowledge, business connections, and capital into high-risk projects with significant potential.

Mihovil Barančić, the initiator and one of the five members of the association’s Board of Directors, explains that the business angels gathered in CBAN will invest in domestic tech startups targeting regional and global markets, which are scalable and thus have a higher potential for development and return on investment. They established the association because they believe there is a significant need for business angels to invest in startups in the market.

– The current state of the Croatian startup scene is good; there are many startups and valuable people working hard. We see ourselves in the chain between startup incubators and accelerators and venture capital funds. We have already established cooperation with several incubators and VC funds – says Barančić.

Alongside him, the members of the CBAN Board of Directors include Marijan Mumdžiev, former CEO and president at Amodo, Renata Brkić, partner at the Feelsgood fund, Hrvoje Zlatar, founder and former director of minus5, and Samir Vreto, senior consultant at Offing.hru.

CBAN currently has thirteen members, including some well-known domestic entrepreneurs – Damir Sabol, founder of Photomath and director of software engineering at Google, Dragan Marković, former board member and COO of Span, John Stefanac, director of Abriva Partners and member of the supervisory board of Orqe and SpectreXR, Toni Frankola, co-founder and director of Syskit, Davorin Capan, co-founder and CEO of NEOS and CloudVane, Mirna Marović, director of ventureXchange and president of the Croatian Private Equity and Venture Capital Association (CVCA), Jonathan Cooper, director of Bright Entertainment (Museum of Illusions) and partner at True Global Ventures, and Hrvoje Josip Balen, founder, co-owner, and board member of Algebra.

An individual angel can invest from as little as 10,000 euros, but typically investments range from 50,000 to 250,000 euros per individual team, as stated on the CBAN website. If a business angel is unable to finance the entire investment independently, they join an angel investor syndicate, and in special cases where higher amounts are needed and the project is at that stage, they can collaborate with other networks of business angels or VC funds. Investments will also be directed towards tech startups in Southeast Europe, in addition to those in Croatia.

– The startup scene in Croatia is developing, and we are positive about that. If we weren’t, we wouldn’t have embarked on this. Every scene can be better, and we will work to make it better – concluded Barančić.

Business Angels Expand Their Activities

For Barančić, this is his second engagement related to angel investments, as he was a member and president of the first and oldest Croatian business angels association CRANE for years before the establishment of CBAN, from which he left back in 2015.

In recent years, interest in investing in startups among some of the thirty members gathered in CRANE has slightly declined, explains Davorin Štetner, president of CRANE. For example, Hrvoje Prpić, one of the founders and members, has publicly stated his reasons.

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Davorin Štetner

—– However, we are all business people; there are no obligations, and everyone works and invests independently as it suits them best. With the emergence of a large number of VC funds in our market, they have taken over that first step which was once reserved for business angels, so that is part of the reason. However, independent business angels and informal groups have always existed in our market, so it has never been just CRANE. Perhaps the perception is such because some members invest exclusively without public knowledge, which is understandable – explains Štetner.

As a result, many of them have turned to other investments. Štetner emphasizes that in CRANE in 2022, they concluded that a significant portion of their members is actually deeply involved in general investments such as tourism, crypto, fintech, greenfield, media, real estate, agriculture, healthcare, and other investments.

– The members unanimously concluded that we have significant interests and experiences in other areas alongside investments in startups, and we have expanded our direction of action to total investments, of which investments in startups are an integral part – says Štetner, highlighting as an example the greenfield project of building the international racing track Croatia Ring , which he leads and is in preparation for a location permit.

He cites creativity and ideas as the strongest assets of domestic startups, but notes that ideas account for only one percent, while 99 percent of success comes from the work and perseverance of the founders, as well as the good selection of colleagues in the team.

– Personally, I have been actively involved in free mentoring for many years, and at the pitch of ZŠEM students about ten days ago, several top-notch ideas were presented. We have a small number of super-successful startups, and we would all certainly like a greater number of successes – believes Štetner, concluding that they want to continue to ‘influence faster cuts in bureaucracy and create a better framework for investors.’