Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Milos Sochor was recorded in September 2018.
Milos Sochor is Managing Partner at Y Soft Ventures, a firm in the Czech Republic. Fascinating conversation about how a small region is gradually becoming a powerhouse of innovation and entrepreneurship.
Sramana Mitra: Tell us a little bit about Y Soft. How big is the fund? Tell us about your investing focus. What kind of investments do you make? Let’s get you introduced to our audience.
Milos Sochor: I will start with Y Soft Corporation, which is the company that has started Y Soft Ventures. We are in the print management sector. We provide hardware/software solution that runs multi-function printers for mainly Fortune 500 companies. These are large customers with a large number of clients.
The main idea is that we have been doing connection of hardware and software in the B2B space since the year 2000. We produce our own hardware that we manufacture ourselves. We logistically deploy this hardware globally. We have 16 offices worldwide. We sell it to more than 140 countries. CEO Vaclav was also in one of your previous podcasts.
Sramana Mitra: Let me tie that for our audience. If you’re interested in learning the story of Y Soft Corporation and Vaclav, please go check that story out on our blog – Bootstrapping to $30 Million from Czech Republic. You’ll find the full seven-part series Entrepreneur Journeys story of Vaclav’s evolution as an entrepreneur.
Milos Sochor: The main story is that Vaclav has built a globally operating company out of a very unlikely starting point.
Sramana Mitra: Indeed.
Milos Sochor: We have acquired a bit of know-how on how to do products for large companies globally and connecting hardware and software. We just decided to leverage this know-how and pass it on in the form of really smart money to our startups that we invest in. We started Y Soft Ventures.
There are two unique points about our venture capital arm. The first one is we do not necessarily invest in companies that have technologies that Y Soft would later acquire. When there’s that corporate venture capital fund, companies look for technologies that they may later acquire or that somehow falls into their portfolio of business. The second one is, we have opened up the venture arm to external investors, which is funded by the mother company that starts the venture fund.
Here’s the reason why. We have acquired a lot of know-how in building global companies out of an underdog market. It has its own specifics on how to do that – how to motivate partners worldwide that would sell your technology and how to work with the hardware. We decided to focus on companies that combined hardware and software that are globally scalable and that are in the B2B sector.
These are companies that are very similar to the way Y Soft does business. Y Soft, at that time, was pretty small. Usually, companies the size of Y Soft do not start their corporate venture funds. Usually, they’re much larger. The interest locally was very high because it was lagging here – a VC that is solely focused on hardware and provides the know-how that we provide.
We had quite a bit of interest from companies. We couldn’t finance it ourselves because we decided to use our net income that we have left over. Vaclav is an entrepreneur who likes to reinvest all the profits and always grow the company. This really made sense and we opened up the venture arm to external investors as well to be able to finance our pipeline.