- AlfaStar Capital, an ever-green or open-ended early-stage alternative investment fund manager based in Sofia, has announced the launch of its operations.
- Founded by Desislava Gospodinova and Lyubomir Staykov, AlfaStar is a EuVECA-registered fund that will run multiple investment cycles within a single vehicle.
- AlfaStar Ventures will have the ability to hold assets longer than typical closed-ended VC funds if its portfolio companies need more time to mature and scale.
“The startups in the sectors that we target have a specific trajectory. Usually, the close-end approach under which most regional VCs operate cannot support portfolio companies in the best way possible, while also delivering the promised return rates to the LPs. AlfaStar’s vision is to be a fund that is able to provide hands-on support and is not pushed to make exits only to fit into a specific time frame or closing period. We are willing to hold the value of our investments for longer if needed in order to help our companies scale and meet the expectations of our investors,” Lyubomir Staykov, Managing Partner of AlfaStar Ventures shares for The Recursive.
AlfaStar Ventures provides investors with open-ended features such as the ability to choose optimal exit times for investments, cost-efficiency, and liquidity flexibility. This makes the fund a suitable investment opportunity for investors seeking higher returns in exchange for higher risks and long-term investment goals.
The two Managing Partners of AlfaStar Ventures Desislava Gospodinova and Lyubomir Staykov are highschool classmates. Desislava comes with a technical and telecommunications background having worked in Cisco, while Lyubomir has nearly 20 years of experience in the finance industry and the banking sector. Currently, the team of AlfaStar Ventures consists of 5 people. Besides the two managing partners, the fund consists of Krasen Hinkov, Kristiyan Mihaylov, and Yonko Chuklev.
Two new team members will join soon bringing additional international experience to the mix. “We are open for collaboration in building a community of like-minded experts and advisors to help add value to our investments because it takes a village,” Desislava Gospodinova comments on the future plans of the team to build its VC network. As the first evergreen EuVECA fund in Bulgaria and the wider region, the fund follows EU Regulation №345/2013 which introduces an EU-wide marketing passport, making cross-border investment more accessible.
How does AlfaStar’s evergreen model look in practice?
The EuVECA fund sets itself apart by its ability to invest in unlisted companies with up to 499 employees and SMEs listed on an SME growth market. The fund is not limited to investing within a certain region and will support companies from all around the world. The two managing partners share that the fund already has one investment made in a ClimateTech company that is based in the UK but will share more details at a later stage.
The partners didn’t disclose the total sum they plan to raise for their fund. AlfaStar Ventures would still operate under investment cycles of around 10 years. The first 4-6 of each cycle will be dedicated to building a portfolio of around 50 companies from various sectors and stages of development. ”Between 35-40% of the size of the fund will be allocated for making initial investments while the rest of the fund’s size will be used for follow-on investments,” Lyubomir Staykov shares.
The evergreen VC fund model of AlfaStar Ventures suits startups that are taking a little longer for R&D and have ambitious plans to scale. That is why the focus verticals of the fund will be on the one side B2B companies in Climate, Green, AgriTech, Industry 4.0 (robotics/automation, IIoT) and B2C companies in the Well Being (mental health), and Fintech verticals.
What’s the USP for investors?
Besides portfolio diversification, AlfaStar Ventures will aim for the diversification of its LPs. “Our main focus is not to attract institutional investors only, but rather to partner with high net worth individuals (with or without investment track record), including family offices, entrepreneurs, other alternative investment funds, and intermediaries. Legally, under the EuVECA regulation, we can partner with investors from all around the EU and our goal for the near future is to expand our footprint into the DACH region, UK and Ireland,” Lyubomir Staykov explains.
Additionally, the EuVECA label opens the doors to LPs with a minimum investment of €100K, making it accessible for individual investors. The fund offers a few flexible options for investors at the end of an investment cycle. LPs can either fully exit the fund, partially exit, or choose to recycle (reinvest) the capital in the next investment cycle, with a new investment strategy.